Indemnity Mutual Marine Assurance Company, Limited, a Corp. v. Powell & O'Rourke Grain Company, a Corp.

• Decision Date: 14 April 1925
• Parties: INDEMNITY MUTUAL MARINE ASSURANCE COMPANY, Limited, a Corporation, Appellant, v. POWELL & O'ROURKE GRAIN COMPANY, a Corporation, Respondent.
• Court: Missouri Court of Appeals

271 S.W. 538

216 Mo.App. 673

INDEMNITY MUTUAL MARINE ASSURANCE COMPANY, Limited, a Corporation, Appellant, v. POWELL & O'ROURKE GRAIN COMPANY, a Corporation, Respondent.

Court of Appeals of Missouri, St. Louis

April 14, 1925

Appeal from the Circuit Court of the City of St. Louis.--Hon William H. Killoren, Judge.

AFFIRMED.

Judgment affirmed.

Hugo Monnig, Jr., and Taylor, Chasnoff & Willson for appellant.

(1) The court erred in admitting in evidence the checks marked "Defendant's Exhibits 3 and 4." These checks were payable to the order of plaintiff, a corporation, and bore what purported to be an indorsement by an agent. The burden was upon the defendant to prove the agent's authority to endorse. Worrell v. Roberts, 58 Mo.App 197; Federal Discount Co. v. Becker, 138 Mo.App. 54; Wade v. Boone, 184 Mo.App. 88; Bank v Blades, 247 S.W. 806; Jackson Paper Mfg. Co. v. Bank, 199 Ill. 151. Defendant failed to sustain this burden. Decker had no authority to endorse these checks. Kansas City Casualty Co. v. Bank, 191 Mo.App. 287; Graham v. U. S. Savings Institution, 46 Mo. 186; Jackson Paper Mfg. Co. v. Bank, 199 Ill. 151; Independent Oil Men's Ass'n v. Bank, 311 Ill. 278; Pluto Powder Co. v. Bank, 153 Wis. 324; Coleman v. Bank et al., 109 Wash. 80; Quigley v. Bank, 80 Mo. 289; Crahe v. Bank, 295 Ill. 375. (2) The court erred in admitting evidence of an alleged custom or practice of insurance agents to endorse and cash premium checks payable to insurance companies. Staroske v. Pulitzer Pub. Co., 235 Mo. 67; Mendenhall v. Sherman, 193 Mo.App. 684; Porterfield v. American Surety Co., 210 S.W. 119; Dietz v. Nix, 216 S.W. 791. (3) The court erred in refusing to direct a verdict for plaintiff on both counts of the petition at the close of defendant's evidence, and again at the close of all the evidence. 1. The answer pleaded payment. On this issue the defendant bore the burden of proof, which burden it failed to sustain. Groomer v. McMillan, 143 Mo.App. 612; Biscuit Co. v. Grocer Co., 143 Mo.App. 300; Griffith v. Creighton, 61 Mo.App. 1. 2. Where a debtor gives to his creditor's agent a check in the amount of the debt, payable to the order of the creditor, and the agent without authority endorses the check, and wrongfully receives and retains the proceeds: (a) The creditor cannot maintain a suit on the check against the bank. Bank v. Whitman, 94 U.S. 343; Grocer Co. v. Bank, 71 Mo.App. 132; Casualty Co. v. Bank, 191 Mo.App. 287. (b) The giving of the check does not constitute payment of the debt, and the creditor can maintain his suit against the debtor to collect the debt. Bank v. Whitman, 94 U.S. 343; Biscuit Co. v. Grocer Co., 143 Mo.App. 300; Grocer Co. v. Bank, 71 Mo.App. 132. 3. Where a bank pays a check of its depositor upon a forged or unauthorized endorsement, it is liable to the depositor for such payment. Bank v. Whitman, 94 U.S. 343; Grocer Co. v. Bank, 71 Mo.App. 132; Biscuit Co. v. Grocer Co., 143 Mo.App. 300; Lieber v. Bank, 137 Mo.App. 158; Wind v. Bank, 39 Mo.App. 72; Bank v. Insurance Co., 110 Mo.App. 62.

Sam B. Jeffries, A. E. Simpson, Paul F. Plummer and Arthur J. Freund for respondent.

(1) There was ample evidence upon which to base a finding that E. F. Decker had actual authority to endorse the checks mentioned in the evidence. This issue was left to the jury under proper instructions, and its finding upon that issue is conclusive. Decker's authority being established, payment to Decker was payment to the company. Mosby v. Commission Co., 91 Mo.App. 500; Sharp v. Knox, 48 Mo.App. 169; Ostend Western Road Machinery Co. v. Commercial Bank, 255 S.W. 585; Higbee v. Bank, 244 Mo. 411, 426; Edwards v. Thomas, 66 Mo. 468, 482; Hull v. Jones, 69 Mo. 587; Mitchum v. Dunlap, 98 Mo. 418; Werth v. Ollis, 61 Mo.App. 401; Johnson v. Hurley, 115 Mo. 513; Goessling Box Co. v. Cal Hirsch & Sons Mercantile Co., 251 S.W. 438; Compress & Warehouse Co. v. St. Louis Cash Register Co., 201 Mo.App. 201; Morrison v. Chapman, 140 N.Y.S. 700; Bernstein v. Sullivan, 119 N.Y.S. 317; Potter v. Sager, 171 N.Y.S. 438; McFadden v. Fallrath, 114 Minn. 85. (2) There was no error in the admission of evidence of a custom among insurance companies in the city of St. Louis that authorized their general agents to endorse checks payable to the order of said companies. 17 Corpus Juris 518; Kinney v. Metropolitan Street Railway Co., 261 Mo. 97; Foster v. K. C. Railways Co., 235 S.W. 1070; Raber v. Kansas City Railways Co., 204 S.W. 739; Piper v. Allan, 219 S.W. 98; Prunke v. Mo. & Kans. Telephone Co., 115 Mo.App. 36. (3) If the endorsement of Decker was unauthorized plaintiff, as well as defendant, could maintain an action against the banks for their action in paying said checks. That question, however, is not material in this case. Casualty Co. v. Bank, 191 Mo.App. 287; Morrison v. Chapman, 140 N.Y.S. 700; McFadden v. Fallrath, 114 Minn. 85.

BRUERE, C. Daues, P. J., and Becker and Nipper, JJ., concur.

OPINION

BRUERE, C.--

This action is on an account stated. The case was tried before the court and a jury and resulted in a verdict and judgment for the defendant, from which judgment plaintiff prosecutes this appeal.

The petition is in two counts. The first count avers an account stated on the 18th day of June, 1918, for eleven hundred and seventy-four dollars and twenty cents, and the second count is based on an account stated on the 27th day of August, 1918, for eleven hundred and sixty-six dollars and twenty-nine cents. The defendant pleads payment.

The errors urged here go to the refusal of the trial court to direct a verdict for plaintiff, on both counts of the petition, at the close of all the evidence; and to the admitting of testimony over plaintiff's objections.

Briefly summarized the facts disclosed by the record are: The plaintiff is a foreign insurance company, organized under the laws of England and duly authorized to do business in the State of Missouri. The defendant is a Missouri corporation, having its place of business in the city of St. Louis, Missouri.

In compliance with the provisions of chapter 50, article 12, Revised Statutes 1919, the plaintiff filed with the Insurance Department of this State a notice of the appointment of E. F. Decker, as its resident agent for the transaction of its authorized business of insurance in Missouri, for the year ending February 1, 1919. Said requisition is in words and figures as follows:

"This is to certify that the Indemnity Mutual Marine Assurance Co., Ltd., of London, England, has appointed E. F. Decker of St. Louis, Missouri, agent for the transaction of its authorized business of insurance in the State of Missouri for the term ending February 1, 1919. Dated at New York, N. Y., this 16th day of January, 1918.

By APPLETON & COX, Attorneys,

Street No. 3 South William St."

Decker became general agent for the transaction of plaintiff's authorized business of insurance in the State of Missouri, in March, 1916. As such agent he wrote policies, signed them, delivered them and collected and remitted to the plaintiff the premiums for insurance written, less the commissions due him. He also made out, on the bill heads of E. F. Decker & Company, the bills for the premiums, transmitted these bills to plaintiff's customers and received payment for said premiums in cash and by checks made payable to his order or the order of the plaintiff assurance company. He endorsed these checks, deposited them in bank to his own account and remitted to the plaintiff the balance due it after deducting his commissions. There was no agent of the plaintiff, in the city of St. Louis, Missouri, who had superior powers to those given to Mr. Decker.

It appears that Decker, in February, 1918, on account of his failure to make remittances to plaintiff for premiums which he had collected for it, was not in good standing with plaintiff. This fact was intentionally concealed from the defendant by the plaintiff and defendant had no knowledge of it until after this controversy arose.

It further appears that the defendant placed all its insurance with Decker and that this business was the largest which the plaintiff had in the city of St. Louis, Missouri. On February 13, 1918, Decker wrote the plaintiff advising that the defendant was about to resume shipments of corn to Cuba; that the premiums on this business would amount to approximately twenty thousand dollars during the year, and asking the plaintiff to advise him whether he should write said insurance as in the past. In this letter Decker further said:

"We will see to it that checks in payment of their accounts are made payable to you and forwarded to your office at the end of each month. You may credit us with the commission each month, which will have the effect of reducing the amount of our indebtedness."

After the receipt of the above letter, and in March, 1918, Oscar W. Smith, plaintiff's American manager, came to St. Louis, and in company with Mr. Decker called upon Mr. Powell, president of defendant, and requested him to make out the checks of his company, for premiums due the plaintiff, payable to the order of the plaintiff. Mr. Powell agreed to this request and stated that he would give orders to have the checks made out that way. Mr. Smith told Mr. Powell in said conversation that Mr. Decker was to continue as the representative of the plaintiff.

It further appears that after the conversation in March, 1918, the plaintiff instructed Decker to forward all checks, received by him from the defendant for premiums due plaintiff, to its managers, Appleton & Cox, in New York. These instructions were not made known to the defendant by the plaintiff and defendant had no knowledge of them.

Thereafter the defendant continued to place its insurance with...