Brock v. Real Estate-Land Title & Trust Co.

• Decision Date: 25 March 1935
• Docket Number: 260
• Parties: Brock et al., Exrs., Appellants, v. Real Estate-Land Title and Trust Company
• Court: Pennsylvania Supreme Court

178 A. 146

318 Pa. 49

Brock et al., Exrs., Appellants, v. Real Estate-Land Title and Trust Company

No. 260

Supreme Court of Pennsylvania

March 25, 1935

Argued January 8, 1935

Appeal, No. 260, Jan. T., 1934, by plaintiffs, from judgment of C.P. No. 5, Phila. Co., Dec. T., 1931, No. 937, in case of Sarah C. Brock et al., executors of the last will and testament of Arthur Brock, deceased, v. The Real Estate-Land Title and Trust Company. Judgment affirmed.

Assumpsit. Before ALESSANDRONI, J.

The opinion of the Supreme Court states the facts.

Verdict and judgment for defendant. Plaintiff appealed.

Error assigned, among others, was refusal of new trial, quoting record.

The judgment of the court below is affirmed.

Robert T. McCracken, with him John F. Headly, of Montgomery &amp McCracken, for appellants.

Benjamin H. Ludlow, for appellee.

Before FRAZER, C.J., SIMPSON, KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.

OPINION

MR. JUSTICE MAXEY:

The question here is whether or not there was evidence to go to the jury of a clerk's authority to endorse a check for deposit, in behalf of his employer, and whether or not payment to the depository named in the endorsement was payment to the coexecutors of whom the clerk's employer was one.

On December 30, 1909, plaintiffs and John W. Brock, now deceased, were granted letters testamentary, as executors of the last will and testament of Arthur Brock, deceased. Included in the assets was a parcel of real estate in the City of Philadelphia. The executors sold this property to one McNeal and wife, taking a purchase-money mortgage, which by subsequent payments was reduced to $25,000. On September 17, 1930, McNeal sold the property. Settlement took place at the office of the defendant and the latter retained the sum of $25,963.50 for satisfaction of the mortgage, this being the full amount of the principal and interest due. On the same day defendant drew a check for this sum to the order of "Estate of Arthur Brock, dec'd," and sent it to the office of John W. Brock, the active coexecutor of that estate. The latter was then ill and unable to attend to business, and the check was delivered to Charles F. Hess, who was employed both by Reilly, Brock & Company, investment bankers, and also by John W. Brock, to whom he rendered clerical assistance with the accounts of the Arthur Brock Estate. John W. Brock had his office on the second floor of a building the first floor of which was occupied by Reilly, Brock & Co. John W. Brock's son was a partner in that company. Of the other three executors of the Arthur Brock Estate, one was in Nova Scotia and two were in California. Hess sought advice from the defendant as to what to do with the check and was told that anyone could endorse it for deposit. For several years the estate had maintained two accounts: one with the Fidelity-Philadelphia Trust Co., and the other with Reilly, Brock & Co., investment bankers. The first was an ordinary bank account and the second was a customer's account. Hess believed that the estate deposited income moneys in the checking account and principal in the customer's account, and typed on the back of the check the following endorsement: "For Deposit Pay to the order of Reilly, Brock & Company Estate of Arthur Brock, D'c'd John W. Brock, Executor," and delivered the check to Reilly, Brock & Co. It went through the clearing house, was paid, and the estate was credited with the proceeds on the books of Reilly, Brock & Co. Hess then arranged with this company to transfer $963.50 to the Fidelity-Philadelphia Trust Co., so as to segregate interest from principal. This was done, leaving with Reilly, Brock & Co., to the credit of the Arthur Brock Estate, $25,000.

On October 24, 1930, while this sum was still in the possession of Reilly, Brock & Co., that firm made an assignment for the benefit of creditors. Plaintiffs then brought suit against defendant, claiming that the proceeds of the mortgage had never been paid to the estate. The defense was that the acts above cited constituted payment to the estate. The case came up for trial and the jury was instructed that if it found that Hess had authority from John W. Brock to deposit the check as he did, the verdict should be for defendant, but if it found that he had no such authority, its verdict should be for plaintiffs. The jury found for defendant and thereupon plaintiffs entered rules for judgment n.o.v. and for a new trial. These were later discharged and this appeal followed.

The question submitted to the jury was whether or not Hess had implied authority to accept the check and deposit it as he did. In other words, the question is whether under the maximum of plaintiffs' proof the conclusion that Hess had authority to do what he did with the check was legally permissible. Defendant's proof was as follows: John W. Brock was the most active of the executors. He customarily received all moneys of the estate and deposited them. He kept the estate accounts and rendered statements to the others. Charles F. Hess was employed by John W. Brock from 1905 until 1923. He was then employed for two years by a hospital of which Mr. Brock was treasurer. In 1925 Hess left the employment of the hospital and assisted Mr. Brock in moving his office to the second floor of 1607 Walnut Street. From that time until the assignment by this firm, Hess was employed by Reilly, Brock & Co., but he continued to help John W. Brock in a secretarial and bookkeeping capacity. He made deposits for the estate of which John W. Brock was executor in the Fidelity-Philadelphia Trust Company and endorsed checks of the estate "For Deposit" in the presence of John W. Brock. He likewise did so when Mr. Brock was absent from his office. He prepared and sent out notices of mortgage interest and it was he who prepared and sent to McNeal and his wife (prospective purchasers of the mortgaged property) and to defendant a statement of the amount necessary to satisfy the mortgage in question. This estate, with the knowledge of all the executors, established an account with Reilly, Brock & Co., in 1915 and bought and sold many securities through this company. Frequently the estate balances amounted to several thousand dollars over a period of many months. When Hess deposited the check in question there was already in the same account (i.e., the Arthur Brock Estate "customer's account") $5,700, and this amount had been there since June 25, 1930. This fund was intact when the company failed on October 24, 1930.

It is unquestioned that payment to John W. Brock, as executor of the estate of Arthur Brock, constituted payment to that estate and the court below aptly said: "If Hess had received the check and had been expressly directed by John W. Brock to endorse it and deposit it with Reilly, Brock & Co., the estate would have been paid. Why should any different result follow because Hess acted pursuant to authority given him previously by John W. Brock, rather than pursuant to authority given him at the moment? If Hess had that authority, the estate was paid and the verdict for defendant was proper."

It is a long established principle that "whatever evidence has a tendency to prove an agency is admissible, even though it be not full and satisfactory, and it is the province of the jury to pass upon it. Direct evidence is not indispensable -- indeed, frequently is not available -- but instead circumstances may be relied on, such as the relation of the parties to each other and their conduct with reference to the subject-matter of the contract": 21 R.C.L., section 6, page 820. In 2 C.J., section 32, page 436, there is laid down this principle: "It [the fact of agency] must be determined from the facts and circumstances of the particular case, and if it appears from such facts and circumstances that there was at least an implied intention to create the relation, it will by implication be held to exist." In Colonial Trust Co. v. Davis, 274 Pa. 363, 118 A. 312, this court, in an opinion by the present Chief Justice, said: "While the mere fact of Larned's [i.e., the agent's] employment to make mortgage loans, prepare necessary papers and attend to the...