Buffalo Trust Co. v. Producers Exchange

• Decision Date: 06 January 1930
• Docket Number: No. 16584.,16584.
• Court: Missouri Court of Appeals
• Parties: BUFFALO TRUST COMPANY, APPELLANT, v. PRODUCERS EXCHANGE NO. 148, CALIFORNIA, MISSOURI, RESPONDENT.<SMALL><SUP>*</SUP></SMALL>

23 S.W.2d 644

BUFFALO TRUST COMPANY, APPELLANT, v. PRODUCERS EXCHANGE NO. 148, CALIFORNIA, MISSOURI, RESPONDENT.^*

No. 16584.

Kansas City Court of Appeals. Missouri.

January 6, 1930.

Appeal from Circuit Court of Moniteau. — Hon. Henry J. Westhues, Judge.

REVERSED AND REMANDED.

Meservey, Michaels, Blackmar, Newkirk & Eager and Robert E. Colebird for appellant.

Ruby M. Hulen and Embry & Embry for respondent.

BOYER, C.

This case is an action to recover on two trade acceptances. For convenience, the parties will be referred to as plaintiff and defendant. The plaintiff is a banking corporation located at Buffalo, New York. The defendant is a Missouri corporation with its home office and place of business at California, Missouri, and at all times in question was engaged in buying and selling poultry, eggs, feed, grain, flour, fertilizer, and automobile tires. The Wayne Tire & Rubber Company, a corporation, was engaged in business at Buffalo, New York, and on occasions sold tires to the defendant. The Mont ford Rubber Company, Inc., was its sales agency.

The petition is in two counts and based upon two trade acceptances or bills of exchange alleged to have been executed by the defendant and discounted, in due course, by plaintiff. The first count alleges that the Wayne Tire & Rubber Company on the 14th day of February, 1924, executed its trade acceptance and bill of exchange directed to defendant and requested said defendant to pay to the drawer of same or its order $114.36 on May 5, 1924; that defendant duly accepted said bill of exchange and trade acceptance on February 14, 1924, in writing upon the face of said bill and acceptance, whereby defendant engaged to pay the same at maturity at California State Bank in California, Missouri; that thereafter and for valuable consideration and before maturity, plaintiff became and was the owner thereof and demanded payment upon maturity which was refused. The second count is to the same effect and is based upon an alleged trade acceptance and bill of exchange dated March 27, 1924, payable on June 4, 1924, for the same amount. Plaintiff prayed judgment for the amount of the bills, with six per cent interest from maturity of each. The trade acceptances recite that the obligation of the acceptor arises out of the purchase of goods from the drawer; and bear on the face thereof an acceptance under the respective dates of February 14, 1924, and March 27, 1924, over the purported signature of defendant; the first one being signed, "Producers Exchange 148, by W.W. Walker, Mgr.;" and the second one, "Producers Exchange No. 148. By W.W. Walker, Manager."

The defendant filed a verified answer to both counts of the petition consisting of a general denial and a further plea of non est factum; and alleges that defendant did not sign and deliver the trade acceptances described in the petition, and that defendant did not authorize or empower any person so to do; and further, that said bills of exchange or trade acceptances are wholly without consideration; and that defendant did on the 14th day of February 1924, and on the 27th day of March, 1924, give the Wayne Tire & Rubber Company an order to ship a quantity of tires to it at its place of business in California, Missouri, and that if the bills of exchange or trade acceptances described in the petition profess to provide that the obligation of the acceptor arises out of the purchase of goods, defendant states that it has received no goods from the Wayne Tire & Rubber Company.

The evidence favorable to plaintiff tended to show that plaintiff purchased the trade acceptances in due course; that plaintiff was the owner thereof and that same are unpaid; that plaintiff acquired the acceptances directly from the Montford Rubber Company which was a separate corporation and the sales agency of the Wayne Tire & Rubber Company; that the Wayne Tire & Rubber Company, by its president, endorsed the acceptances and delivered them to the Montford Rubber Company; that the Montford Rubber Company endorsed said acceptances by its treasurer, and received credit for the net amount of said acceptance in its bank account maintained in plaintiff's bank, and checked out all of said money. The first trade acceptance was discounted by the plaintiff on February 20, 1924, and the second one was discounted by plaintiff on April 16, 1924. Plaintiff became owner of them on said dates and was such owner at the time of the institution of this suit.

The evidence shows that plaintiff is a banking corporation located and transacting business at Buffalo, New York, and that defendant is a Missouri corporation engaged in operating a store or place of business at California, Missouri; that at the time of the purchase of the acceptances plaintiff was assured that the goods for which they were given had been shipped, and that plaintiff had no knowledge or information to the contrary until after the acceptances had been purchased and paid for and the proceeds therefor checked out by the Montford Rubber Company.

The evidence shows that the board of directors of defendant on the 25th day of June, 1923, by resolution, employed W.W. Walker as manager for its company, and from that time until the time of trial said Walker was the manager of defendant, in charge and control of all of its property and the conduct of its business; that he bought and sold all of the merchandise and produce handled by said company; that he was authorized to collect all accounts, sign checks and receipts for the company, and that all checks issued against the funds of the company were issued by him or under his supervision and direction.

Mr. Walker testified that he was the manager for the defendant; that he signed the acceptances, and that he wrote the name, Producers Exchange, or stamped it on the trade acceptances; that he held the stamp for his house; that the trade acceptances were in the form that they appear when he signed them; that the instruments were a part of what he signed; that he had charge of the store; that he bought and sold the merchandise for the defendant; that on one occasion he signed notes for defendant to a bank when the bank was specifically authorized to make the loan; that he could hardly say how many times he had signed notes at the bank, and, over the objection of plaintiff, that he had been directed to do it by the board; he further testified that he also purchased feed and fertilizer and that these usually came with sight draft or draft attached to bill of lading; they were purchased in St. Louis and usually paid for by sight draft or arrival draft; that "he bought fertilizer on a credit — on a contract rather than on a credit;" that he or the bookkeeper under his direction issued all checks; that purchases were paid for in cash for amounts of $25 or $50, but above that amount were paid for by check; that the time these trade acceptances were signed, he signed three; that he may have signed other acceptances; that he was acquainted with some of the officials and representatives of the Wayne Tire & Rubber Company; that he prepared and presented to the board of directors a report of the resources and liabilities of the Producers Exchange No. 148 for the month ending August 31, 1923. Among the liabilities listed in this report was an item of $103.14 due the Wayne Tire & Rubber Company; that he thought this amount was due on a prior trade acceptance which had been signed by "our previous manager." And on cross-examination, said it was an outstanding indebtedness, but that he did not recall whether it was a trade acceptance, and that he had bought tires from the Wayne Tire & Rubber Company without trade acceptance. And over plaintiff's objection, he testified that he never received any express authority from the board of directors or the president or any of the officers, directing him to accept trade acceptances or execute any negotiable instruments, and that he never received the tires on these trade acceptances.

The secretary for the defendant company identified the minutes of the board of directors and its by-laws. The minute authorizing the employment of Mr. Walker as manager was placed in evidence, as well as a portion of the by-laws. This witness further testified that he had read over the minutes from January, 1924, and that they did not contain anything showing that the board had instructed Mr. Walker not to sign trade acceptances, and that there was nothing in them prohibiting him from signing them. This testimony was offered and admitted over the objection of defendant. One of the by-laws directs, inter alia, that the board shall employ a manager who shall have supervision and management of the business of the corporation, subject to the expressed will of the board of directors and the shareholders. That it shall be the duty of the manager to have general oversight and control over the business of the company, subject, however, to the board of directors. He shall attend to the buying and selling of all commodities the company may see fit to handle and shall collect all accounts due the company and "sign all checks, receipts." That he shall keep accurate records and books of all transactions, deals and business of the company and a copy of all correspondence, and preserve all books, contracts, papers, statements, and documents pertaining to the business of said company and exhibit the same to the directors whenever they may call for them, and shall file with the board at their monthly meeting, a full and complete report of all business transaction during the preceding month; that "he shall not trade or deal in futures in grain or other commodities on any board of trade, either in his own name or the name of any other person or persons, or in the name of this corporation (except as may be hereinafter provided with reference to hedging)."

Defendant offered no evidence, and at the close of plaintiff's case the court, at the request of defendant, directed...