53 N.W. 1061 (Minn. 1893), Columbia Mill Co. v. National Bank of Commerce

Citation:53 N.W. 1061, 52 Minn. 224
Opinion Judge:Gilfillan, C. J.
Party Name:Columbia Mill Co. v. National Bank of Commerce
Attorney:Koon, Whelan & Bennett and Eustis & Morgan, for appellant. Jackson & Atwater, for respondent.
Judge Panel:Dickinson, J. Mitchell, J., did not participate in the hearing or decision of this case.
Case Date:January 13, 1893
Court:Supreme Court of Minnesota
 
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Page 1061

53 N.W. 1061 (Minn. 1893)

52 Minn. 224

Columbia Mill Co.

v.

National Bank of Commerce

Supreme Court of Minnesota

January 13, 1893

Argued December 22, 1892

Appeal by defendant, the National Bank of Commerce, from an order of the District Court of Hennepin County, Hicks, J., made August 10, 1892, denying its application for a new trial.

The plaintiff, the Columbia Mill Company, was in 1890, engaged in the manufacture and sale of flour at Minneapolis, and had for six years kept its bank account with defendant. It averaged over $ 100,000 a month. In payment of its bills for flour, its customers sent to it checks and drafts payable to its order. Leo Heilpern was its bookkeeper and had charge of the petty cash received at the office for local sales at retail. Between April 14 and September 12, 1890, he feloniously purloined nineteen checks and drafts belonging to plaintiff and payable to its order, and with a rubber stamp wrongfully placed upon the back of each the indorsement of plaintiff, "Columbia Mill Co.," and signed his own name underneath. From time to time he sold these checks and drafts to the defendant and converted the proceeds to his own use. This action was to recover of the bank the gross amount of these checks and drafts, $ 7,546.59, and interest. The questions litigated were whether Heilpern had authority from the Mill Company, express or implied, to indorse and sell checks and drafts, and whether if he did not, the Mill Company had negligently permitted it to appear that he had.

At the first trial the jury disagreed. It was again tried January 15, 1892. The jury returned a verdict for plaintiff for $ 8,188.20. The defendant moved for a new trial, and being denied, appeals.

Order reversed.

Koon, Whelan & Bennett and Eustis & Morgan, for appellant.

The question is, whether the plaintiff so conducted its business, and held the agent Heilpern out, as to lead the defendant reasonably to suppose that he possessed the authority which he assumed to exercise.

Where the acts are of such character and so continuous as to justify a reasonable inference that the principal had knowledge of them, and would not have permitted them if unauthorized, the acts themselves are competent evidence of agency. 1 Amer. & Eng. Encyc. of Law, 340; Reynolds v. Collins, 78 Ala. 94; Proctor v. Tows, 115 Ill. 138; Weaver v. Ogletree, 39 Ga. 586; Friedlander v. Cornell, 45 Texas, 585.

The plaintiff's manager, Mr. Zeidler, knew, or in the exercise of ordinary care and prudence would have known, that Heilpern and and his predecessors in office were accustomed to indorse and collect the checks from the retail department and obtain the money thereon for the purposes of the business. The practice grew up under its first bookkeeper, was followed by the second, and continued under Heilpern, the third. It covered a period of eight years, and it is manifest that a reasonable surveillance or oversight of the business and the general methods pursued by the bookkeepers would have revealed the fact. McCord v. Western Union Tel. Co., 39 Minn. 181; Webster v. Wray, 17 Neb. 579; Kasson v. Noltner, 43 Wis. 646; Lorton v. Russell, 27 Neb. 372; Johnson v. Donnell, 90 N.Y. 1.

The scope of Heilpern's agency was to be determined, not alone from what plaintiff's officers may have told him to do, but from what they knew, or in the exercise of ordinary care and prudence ought to have known, he was doing. Kingsley v. Fitts, 51 Vt. 414; McCormick v. Kelly, 28 Minn. 135.

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