Bank of Ferguson v. Blick

• Citation: 115 S.W.2d 27
• Decision Date: 05 April 1938
• Docket Number: No. 24534.,24534.
• Parties: BANK OF FERGUSON v. BLICK et al.
• Court: Missouri Court of Appeals

115 S.W.2d 27

BANK OF FERGUSON v. BLICK et al.

No. 24534.

St. Louis Court of Appeals. Missouri.

April 5, 1938.

Rehearing Denied April 20, 1938.

Appeal from Circuit Court, St. Louis County; Robt. W. McElhinney, Judge.

"Not to be published in State Reports."

Suit by the Bank of Ferguson against Anna Blick and another to set aside the transfer of a certificate of deposit as a fraud on plaintiff as named defendant's creditor, and to obtain the right to set off an indebtedness of named defendant on two notes against the amount of the certificate. From a judgment for defendants, plaintiff appeals.

Reversed and remanded, with directions.

Robert B. Snow, Jr., and Herbert E. Bryant, both of St. Louis, for appellant.

Albert E. Hausman, of St. Louis, for respondents.

BENNICK, Commissioner.

This is a suit in equity in which plaintiff, Bank of Ferguson, asks that the purported transfer, indorsement, and assignment of a certain certificate of deposit from defendant Anna Blick to her daughter, defendant Sylvia B. Graf, be set aside and canceled, and that it be allowed to set off against the amount of said certificate of deposit an alleged indebtedness of defendant Anna Blick as evidenced by two promissory notes.

The evidence discloses that since 1919 Mrs. Graf and her husband have continuously made their home with Mrs. Blick, an elderly widow, at 410 Hereford avenue, in Ferguson, Mo. While the Grafs originally undertook to pay Mrs. Blick the sum of $50 a month as a fixed contribution towards the expenses of the household, they were never to be regarded as mere boarders in the home, but instead lived with the mother in the ordinary family relationship with the daughter seeing after the management of the household and taking care of all her mother's personal affairs.

Upon the death of her husband some years ago, Mrs. Blick succeeded to the ownership of his two businesses; the one known as the Ferguson Coal & Feed Company, and the other as the Blick Coal, Feed & Material Company. Neither business was incorporated, and the names in question were merely trade-names which Mr. Blick had selected for his operations.

Following her acquisition of the businesses Mrs. Blick at no time took any active part in their management or operation, but instead put her son, Hiram, in "full charge and control," with instructions "to run the business, like his father" had done. She claims (as is most likely true) that from then on she knew nothing of what was done with respect to the affairs of the two businesses, but merely accepted whatever was given her by way of income therefrom until in 1931 or thereabouts, when all further income seems to have ceased.

Indeed, the fact is that so far as the Ferguson Coal & Feed Company's affairs were concerned, it is agreed that on October 10, 1932, in an action brought in the circuit court of St. Louis county, the Universal Atlas Cement Company obtained a judgment for $12,263.28 against Anna Blick doing business as Ferguson Coal & Feed Company. Undoubtedly, Mrs. Blick was served with process in that action, but whether she appreciated the significance of the action, or knew of the subsequent entry of judgment against her, does not appear. As for her daughter, Mrs. Graf, the latter insists that she knew nothing of the pendency of the action or of the entry of judgment against her mother, and while the probability of any such statement may well be doubted in the light of all that subsequently occurred with respect to the attempted transfer of the mother's bank deposits to Mrs. Graf, the fact still remains that there was no direct evidence adduced to the contrary.

And not only did the Ferguson Coal & Feed Company have its financial difficulties, but the same was also the case with the Blick Coal, Feed & Material Company.

On October 18, 1933, there were executed two notes to plaintiff, Bank of Ferguson, on behalf of the latter company; the one note for the sum of $275, and the other for $1,600. Both notes were demand notes bearing interest at the rate of 6 per cent. per annum, and were given in renewal of loans previously obtained and dating back, respectively, to April 4, 1929, and December 18, 1931. At the time of the making of the loans the amount thereof had in each instance been credited by the bank to the account of the Blick Coal, Feed & Material Company, and thereafter there had been partial payments made from time to time until on October 18, 1933, the date of the execution of the two notes now in controversy, the total indebtedness outstanding had been reduced to the sum of $1,875.

One of the important questions in this case is whether Mrs. Blick was personally liable on such two notes so as to have subsequently entitled the bank to apply any part of her individual deposits towards the payment of the same. She claims not to have known of their execution, and indeed her name does not appear upon them, but instead, on the line reserved for the signature of the maker, there appears the name "Blick Coal Feed & Material," followed immediately underneath by the name "W H Blick." The latter was of course the signature of Mrs. Blick's son, Hiram, who, as we have already pointed out, had been put in "full charge and control" of her businesses when she became the owner of them at the time of her husband's death.

Mrs. Blick's individual deposits in plaintiff bank originally included not only a personal checking account, but also three certificates of time deposit which, on March 5, 1934, were merged into a single certificate of deposit for the sum of $2,207.

Thereafter, such certificate was indorsed by Mrs. Blick and turned over to Mrs. Graf, who then opened up an account in her own name in the First National Bank in St. Louis. When the certificate became due on September 5, 1934, Mrs. Graf deposited it in the First National Bank in St. Louis for collection, but when it was presented to plaintiff bank, the latter refused to pay it upon the theory that the indorsement and transfer of the same to Mrs. Graf had been fraudulent as to plaintiff, an existing creditor of Mrs. Blick, and that plaintiff had the right to apply the amount of the certificate to the payment of the two notes executed on behalf of the Blick Coal, Feed & Material Company, payment of which had been theretofore unavailingly demanded by plaintiff on May 10, 1934.

Upon plaintiff's refusal to pay the certificate, Mrs. Graf, on December 26, 1934, instituted an action upon it against plaintiff in the circuit court of St. Louis county, in which action she sought to recover the face value of the certificate with accrued interest thereon. Obviously, with Mrs. Blick not a party to that action, there was no opportunity for plaintiff to have the conflicting claims of all the parties determined, and consequently, on April 8, 1936, it instituted this suit against both Mrs. Blick and Mrs. Graf, in which, as we have already pointed out, it asks that the indorsement and transfer of the certificate from Mrs. Blick to Mrs. Graf be set aside and canceled, and that it be allowed and permitted to apply the amount thereof against what it claims to be the indebtedness of Mrs. Blick upon the two notes which were executed by her son, Hiram, in connection with the loans made by plaintiff to the account of the Blick Coal, Feed & Material Company.

Thus it is to be seen that the issues in this case are primarily two in number; the first being that of whether Mrs. Blick is personally liable to plaintiff upon the two notes in question, and the second being that of whether her indorsement and transfer of the certificate of deposit to Mrs. Graf was made with the intent of hindering, delaying, and defrauding plaintiff as a creditor of Mrs. Blick so as to have been void under sections 3116, 3117, R.S. Mo.1929, Mo.St.Ann. §§ 3116, 3117, pp. 1942, 1946.

After a trial of the issues the court rendered its decree in favor of defendants; and, following an unavailing motion for a new trial, plaintiff has duly perfected its appeal to this court.

Mrs. Blick's contention that she is not indebted to plaintiff upon the two notes in question is based upon the theory that her son, Hiram, was not shown to have had the authority to borrow money upon her credit so as to have charged her with liability upon the notes he executed.

We are of course aware that because of the great possibility of abuse which might well attend the power to borrow money upon the credit of some one other than the borrower, the existence of any such power on the part of an agent, absent express authority, is not to be inferred unless it is necessarily to be implied from the scope and character of the authority which is expressly granted. In other words, the power to borrow money is not to be implied from proof of a mere general agency, but is only to be inferred when the nature of the business intrusted to the agent and the particular authority conferred upon him render it reasonably requisite, if not indeed practically indispensable, to the proper performance of the duties...