Biedermann v. Mermod, Jaccard & King Jewelry Co.

• Decision Date: 02 May 1922
• Docket Number: No. 17194.,17194.
• Citation: 242 S.W. 126,210 Mo. App. 158
• Court: Missouri Court of Appeals
• Parties: BIEDERMANN v. MERMOD, JACCARD & KING JEWELRY CO.

242 S.W. 126

210 Mo. App. 158

BIEDERMANN v. MERMOD, JACCARD & KING JEWELRY CO.

No. 17194.

St. Louis Court of Appeals. Missouri.

May 2, 1922.

Appeal from St. Louis Circuit Court; Charles B. Davis, Judge.

Action by Willis F. Biederman, trustee in bankruptcy of the R. M. Morris Lumber Company, against the Mermod, Jaccard & King Jewelry Company. From judgment for plaintiff, defendant appeals. Affirmed.

McLaren & Garesche and E. E. Wayman, all of St. Louis, for appellant.

Abbott, Fauntleroy, Cullen & Edwards, of St. Louis, for respondent.

BIGGS, C.

Plaintiff sues as the trustee ha bankruptcy of R. Morris Lumber Company, a Missouri corporation. The action is for money had and received, in 11 counts, to recover the amounts of certain checks issued by the R. M. Morris Lumber Company through R. M. Morris, its president, payable to the defendant, and which were received by defendant in payment of the individual debt of R. M. Morris. The checks were issued on various dates between November 26, 1913, and December 7, 1915, all of which were delivered to the defendant, cashed by it, and were taken in satisfaction of defendant's claim against R. M. Morris personally for jewelry sold to him. The 11 checks aggregate the sum of $330.25.

No question arises as to the sufficiency of plaintiff's proof to establish his cause of action except in one particular, and that is, there was no evidence offered by plaintiff to prove that the defendant had actual knowledge that the various checks were drawn without the authority of the corporation, this being necessary, as asserted by defendant, under the provisions of section 996, Revised Statutes 1919, which statute was enacted by the Legislature in 1917, subsequent to the time that the checks referred to were issued and accepted by the defendant. It is asserted that under said statute it is necessary before plaintiff can recover for him to prove actual knowledge on the part of defendant that the checks were drawn without the authority of the corporation, and that, said statute being merely a rule of evidence, and affecting only the remedy, it applies to the present controversy and cause of action, notwithstanding it arose and the checks were issued prior to the enactment of the law. Because of the absence of any evidence on behalf of plaintiff that the defendant had actual knowledge that the checks were drawn without the authority of the corporation, the defendant contends that its demurrer to the evidence should have been sustained.

The defendant offered no evidence. The court below refused to sustain defendant's demurrer, and rendered judgment on each count of the petition, with interest from the date of the filing of the suit. Following the usual preliminaries defendant has appealed.

A single question is presented, namely, whether the defendant can be absolved from liability because plaintiff failed to affirmatively prove that defendant had actual knowledge that the checks were issued without the authority of the corporation, as required by the act of 1917, in view of the fact that the act was passed subsequent to the acceptance of the checks and the accrual of the cause of action. Plaintiff asserts that there is nothing in the act to indicate that it was intended to be retrospective in its operation, and it should not be given that effect; that to do so, and impose the burden upon plaintiff of showing such actual knowledge on the part of defendant, would be to place upon the act an interpretation contrary to article 2, § 15, of the Missouri Constitution, which provides that no law retrospective in its operation can be passed by the General Assembly. The act of 1917 (section 996, R. S. 1919) is as follows:

"Liability of Corporation, Firm or Copartnership. —If any check, draft or order of any corporation, firm or copartnership shall be given in payment of the debt of any officer, agent or employé, of said corporation, firm or copartnership, the payee or other person collecting such check, draft or order shall not be liable to said corporation, firm or copartnership therefor, unless it shall be shown that such payee or other person, at the time of collecting same, had actual knowledge that said check, draft or order was issued without authority of said corporation, firm or copartnership."

Before the enactment of this law a rule of decision prevailed in this state to the effect that in such cases, where one accepts the check of a corporation drawn by an officer in payment of his private obligations, he takes it with notice of a lack of authority on the part of the officer, and is required to repay the proceeds in an action for money bad and received where it appears that the corporate funds were misapplied. Reynolds v. Gerdelman, 185 Mo. App. 176, 170 S. W. 1153; Reynolds v. Title Guaranty Co., 196 Mo. App. 21, 189 S. W. 33; Blake v. Third National Bank, 219 Mo. 644, loc. cit. 666, 118 S. W. 641; St. Charles Savings Bank v. Edwards Brokerage Co., 243 Mo. 553, 147 S. W. 978; Reynolds v. Whittemore (Mo. Sup.) 190 S. W. 594; McCullam v. Buckingham Hotel Co., 198 Mo. App. 107, 199 S. W. 417. And in such a case the defendant carried the burden of showing that the officer was duly authorized to draw upon the funds of the corporation for his private purposes. McCullam v. Buckingham Hotel Co., supra; Reynolds v. Whittemore, supra; Bank v. Brokerage Co., supra.

The act of 1917 modifies the rule heretofore stated, and provides that the payee or person collecting the check or draft in such cases shall not be liable to the corporation, unless it be shown that such payee at the time of collecting the check had actual knowledge that said check was issued without the authority of the corporation. By this law a new element of the cause of action must be established which was not required under the law existing prior to the enactment.

In the present case the checks were issued and the cause of action accrued thereon to the corporation long prior to the passage of the act. Is the act in question retrospective in character, and applicable to the present case? In the first place, it should be determined whether the Legislature intended that the act should operate retrospectively, and apply to prior controversies or causes of action. If it did not, then it would be unnecessary to determine whether its retrospective operation runs contrary to the constitutional inhibition, and interferes with and deprives plaintiff of a vested right.

The act states that, if any check shall be given in payment of a debt of any officer, the payee shall not be liable to said corporation, unless it shall be shown that such payee at the time of collecting the check had actual knowledge that said check was issued without authority of said corporation. There is nothing in the language of the act itself to indicate the Legislature intended that it should operate retrospectively. On the contrary, the language used indicates that it should apply only to checks issued thereafter.

A rule of construction is well settled in this state, which is stated by Judge Gantt for the court in banc in the case of State ex rel. Scott. v. Dickx, 211 Mo. 577, 111 S. W. 3, thus:

"The settled rule of construction in this state, applicable alike to the constitutional and statutory provisions, is that, unless a different intent is evident beyond reasonable question, they are to be construed as having a prospective operation only"—citing cases.

In State ex rel. Harvey v. Wright, 251 Mo. loc. cit. 344, 158 S. W. 829, Ann. Cas. 1915A, 588, also a case in banc, Judge Faris said:

"This rule is also in consonance with the text-book law: `It is a well settled rule of construction that laws relate to the future, and are not to be construed retrospectively, or to have a retrospective effect, unless it shall clearly appear that it was so intended by the Legislature, and unless such construction is absolutely necessary to give meaning to the language used.' * * * `In every case of doubt the doubt must be resolved against the retrospective effect.'"

To the same effect is the late case of Christine v. Luyties, 280 Mo. 416, 217 S. W. 55, which construed section 1 of the act of 1919 (Laws 1919, p. 213), an act pertaining to a review of a referee's report, and which reads as follows:

"On appeals in all cases, whether law or equity, in which a referee has been...