American Employers Ins. Co. of Boston, Mass. v. Manufacturers & Mechanics Bank of Kansas City

• Decision Date: 24 June 1935
• Citation: 85 S.W.2d 174,229 Mo.App. 994
• Parties: AMERICAN EMPLOYERS INSURANCE CO., APPELLANT, v. MANUFACTURERS AND MECHANICS BANK ET AL., RESPONDENTS
• Court: Kansas Court of Appeals

85 S.W.2d 174

229 Mo.App. 994

AMERICAN EMPLOYERS INSURANCE CO., APPELLANT, v. MANUFACTURERS AND MECHANICS BANK ET AL., RESPONDENTS

Court of Appeals of Missouri, Kansas City

June 24, 1935

Appeal from Circuit Court of Jackson County.--Hon. Allen C Southern, Judge.

AFFIRMED.

Judgment affirmed.

Hackney & Welch and Clyde J. Linde for appellant.

Wilson Bundschu & Bailey for respondents.

OPINION

SHAIN P.J.

This is a cause of action wherein the appellant, hereinafter designated as plaintiff, seeks to recover from respondents, hereinafter designated as defendants, by way of subrogation for moneys paid out by the plaintiff on an indemnifying bond.

The plaintiff issued a policy of insurance indemnifying the Chamber of Commerce of Kansas City, Missouri, a corporation, against loss of money or other personal property through fraud, dishonesty or wrongful abstraction of any employee of said Chamber of Commerce.

The Chamber of Commerce sustained a loss of $ 1598 through the wrongful act of one Bellamy, its employee, and the plaintiff here paid said amount to the Chamber of Commerce. Under its policy of insurance, it became subrogated to the rights of the insured to recover said amount from the wrongdoer, and the Chamber of Commerce assigned its said right to the insurer.

The evidence discloses that one of the activities of the Kansas City Chamber of Commerce is to conduct an annual campaign for charity funds. These funds are then allotted to the various accredited charitable organizations in the city and county. One of these was the Kansas City Provident Association which received money from the Kansas City Chamber of Commerce, operating in this particular feature of its activities through its so-called "Charities Bureau." One of the activities of the Kansas City Provident Association is to give aid to destitute persons, whether residents of the city and county, or unfortunate persons residing elsewhere, temporarily in need of assistance while here. The County Court of Jackson County subscribed $ 18,000 for the year 1930 to the charities fund. There being some question in the mind of the County Court whether it could lawfully give this amount to a private corporation, such as the Kansas City Chamber of Commerce for distribution to private charities, the matter was handled in this fashion. The charities bureau of the Chamber of Commerce advanced sums of money to the Kansas City Provident Association, from time to time, according to its allotment. There was testimony that this amount greatly exceeded the amount of the county's subscription. The Provident Association would then render a monthly statement to the county court in amount of $ 1500, setting out therein the names of persons and amount of relief contributed by it, acting somewhat in the capacity of agent of the county court in rendering such aid, the total amount of such aid amounting to $ 1500 each month, but not being the total amount of all aid given by the Provident Association. The county court would then issue its warrant on the county treasurer, to the order of Kansas City Provident Association, in the amount of $ 1500, payable out of the "pauper fund." It frequently happened that this fund was exhausted and the warrant had to be held some length of time until tax moneys were received and the "pauper fund" was replenished. The Provident Association made no entry of any kind in its books of this amount, or was any record kept of this warrant, but its officer immediately put an assignment thereon and mailed it to the charities bureau of the Chamber of Commerce. The assignment placed thereon was as follows:

FOR VALUE RECEIVED, I ASSIGN THE WITHIN WARRANT TO

. . . .

this . . . . Day of . . . ., 19 . . . .

THE KANSAS CITY PROVIDENT ASSOCIATION

WILLIAMS VIALS, Cashier.

The assignment of the warrant in controversy, presently to be mentioned, appears, from the photostatic copy preserved in the printed record, to have been made with a rubber stamp except for the signature of Mr. Vials, and the word "Cashier" and the date, 1--Feb.,--30, all of which are written in ink, in the handwriting of Mr. Vials.

Having made this assignment in blank, it so reached the charities bureau of the Chamber of Commerce. No credit appears to have been given the Provident Association by the charities bureau for this warrant.

The charities bureau, in 1930, was in charge of a Mr. Pfeiffer, and had six or eight employees, consisting of a cashier, assistant cashier, bookkeeper or accountant and collectors, whose business it was to keep a record of all donations to the charities drive, to collect same, and keep an accounting of the manner of their expenditure. Among the six or eight employees were a Mrs. Reuland, assistant cashier, and a Mr. Bellamy, accountant or bookkeeper. Among the duties of the assistant cashier were to have custody of checks and other receipts; Mr. Bellamy was the general bookkeeper and had access to a box in which Mrs. Reuland kept warrants, checks and other evidences of indebtedness awaiting payment. Mr. Pfeiffer also had access to this box, which was kept in a safe at night, but in daytime was kept at Mrs. Reuland's side on her desk, in a sort of cashier's cage.

On January 29, 1930, the County Court of Jackson County issued to the Kansas City Provident Association its warrant for $ 1500, being numbered 7410, on presentation of a statement of items of $ 1500 spent by the Provident Association in aiding destitute persons. This warrant was drawn on the Jackson County Treasurer and ordered him to pay said amount out of the "pauper fund."

The record shows that this warrant was presented to the County Treasurer of Jackson County for payment, on January 30, 1930, but the "pauper fund" was exhausted on that date, and the county treasurer endorsed on the back of the warrant the following:

"This warrant presented for payment. Fund Exhausted. Registered No. 1223, Jan. 30, 1930, HARRAY A. STURGES, Treasurer."

The purpose of the presentation was that, in the event the fund was exhausted, the warrant would draw interest at six per cent per annum from date of presentment only, until paid.

This warrant having reached the Charities Bureau of the Chamber of Commerce of Kansas City, with these endorsements on it, it was the duty of Mrs. Reuland to retain custody of it until it was ready for payment. It was the duty of Bellamy to check up with the county treasurer and ascertain when funds were available to pay this and other warrants, out of the "pauper fund." It was also his duty to make monthly statements for the inspection of his superiors of the assets on hand, contained in the strong box on Mrs. Reuland's desk. For this purpose, he had access to the box and would list this and other warrants. It was also his duty to check Mrs. Reuland and see that she had on hand the deferred obligations called for by the books of account which he kept. Auditors checked Bellamy's record semi-annually.

When Bellamy ascertained that the "pauper fund" was able to pay any of these county warrants, it then became his duty to notify Mrs. Reuland, and it was her duty to start the warrant on the road to payment. She did this by stamping on the back thereof, "Pay Commerce Trust Co." and deposit in said bank to the account of Townley Culbertson, cashier of the charities fund. The bank then collected from the county treasurer and the charities fund received credit in the account of Mr. Townley Culbertson, cashier. There was testimony that no one had any authority whatever except to deposit these county warrants to Mr. Townley Culbertson's account, and that this duty was usually performed by Mrs. Reuland, when Mr. Bellamy notified her that the county was in funds and the warrant would be paid. At times, she had in her possession in the box on her desk obligations unpaid to the amount of $ 20,000.

Mr. Pfeiffer testified that on two occasions Mrs. Reuland was ill and he had directed Bellamy to make the deposit of county warrants to the account of Mr. Townley Culbertson, which was done. That Bellamy on those occasions had authority to put the regular deposit stamp on the back of the warrants.

Warrant No. 7410, out of which this controversy arose, remained in the possession of the Charities Bureau from approximately February 1, 1930, until March 9, 1931, when Bellamy ascertained that funds were on hand in the county treasurer's office to pay it. From this point the evidence is at variance as to just what transpired. And, as it presented an issue for the jury to solve, it is necessary that the evidence most favorable to the defendant on this issue, be considered.

The appellant here contends that Bellamy simply extracted the warrant from the strong box, while Mrs. Reuland was at lunch inserted his own name in the blank space left for the name of the assignee, with a typewriter; endorsed it and started it on its way to payment. He did this by procuring a friend, named Courtney, to endorse it and take it to his (Courtney's) bank, the respondent Manufacturers & Mechanics Bank, and leave it there for presentation and collection. Bellamy represented to Courtney, with whom he was engaged in church work, that he had no bank account of his own, and asked Courtney to do it for accommodation. Courtney had previously loaned Bellamy $ 200 cash, and Bellamy told Courtney that the Charities Bureau had paid him the warrant for some special work, and he wanted to get it cashed and pay Courtney the $ 200 that he owed. The respondent bank mailed the warrant to the county treasurer, and in due time, it was paid, and the bank credited the amount $ 1598 to Courtney's account, which he maintained in the name of a small business he operated. Of this $ 1598, Courtney retained the $ 200 loan and five...