Eastin v. Bank of Harrisonville

• Citation: 246 S.W. 991,213 Mo. App. 130
• Decision Date: 08 January 1922
• Docket Number: No. 14535.,14535.
• Parties: EASTIN v. BANK HARRISONVILLE et al.
• Court: Court of Appeal of Missouri (US)

246 S.W. 991

213 Mo. App. 130

EASTIN v. BANK HARRISONVILLE et al.

No. 14535.

Kansas City Court of Appeals. Missouri.

January 8, 1922.

Appeal from Circuit Court, Cass County; Ewing Cockrell, Judge.

Action by W. F. Eastin against the Bank of Harrisonville and another. Judgment for plaintiff, and the named defendant appeals. Affirmed.

A. A. Whitsitt and J. S. Brierly, both of Harrisonville, for appellant.

W. D. Summers"and Roscoe C. Summers, both of Harrisonville, for respondent.

TRIMBLE, P. J.

Plaintiff, in an action as for money had and received, sued to recover the sum of $5,021.87, which was on deposit with the Bank of Harrisonville, to the credit and in the name of the plaintiff. On the 3d of February, 1920, the State Bank Examiner took possession of said bank; it having been found to be in an insolvent condition. Thereafter, the State Bank of Harrisonville was organized and by contract with the former bank took over its assets for the purpose of liquidating the same, and for this reason the new bank was made a party defendant herein so that whatever judgment might be obtained against the old bank would be paid by the new to the extent at least of the assets of the old applicable to the payment, pro rata, of plaintiff's claim along with the former bank's other creditors.

The case was tried before the court without a jury, and judgment for the full amount asked, together with interest, was rendered. The defendant Bank of Harrisonville has appealed.

There is no question but that on and after April 23, 1918, plaintiff had $7,000 on deposit in the Bank of Harrisonville, it being the proceeds of his farm, which he had sold. A. L. Burney was president of the bank and had plaintiff's complete confidence as well as the confidence of the entire community; and the bank was supposed to be sound and strong financially. Burney told plaintiff that the bank needed some money but did not want its borrowers to know it was selling their paper, and that if plaintiff would buy certain of its paper, he could obtain a good rate of interest on his money instead of letting it lie idle in the bank. On May 15, 1918, plaintiff, in company with his wife and son, went to the bank, and there Burney exhibited three notes which purported to be payable to the bank, and which aggregated, with the interest then apparently due thereon, about $100 more than the amount of the cheek hereinafter referred to. Plaintiff was old and could not see well and relied upon what Burney told him. After figuring up the amount due in the aggregate on the three notes, Burney drew up a check on plaintiff's account for the sum of $5,021.87, and had plaintiff to sign it, and then plaintiff paid him $100 out of his pocket to make up the amount of the three notes. Burney then, as president, indorsed the three notes over to plaintiff and charged the plaintiff's check against his account, reducing it to that extent. Afterwards, when the interest on the notes became due according to their terms, Burney had plaintiff to leave the notes with him so that (so he said) he might collect it for plaintiff without letting the payors know that the bank did not own them. Burney credited plaintiff's account with sums of interest claimed to have been collected on the notes and returned them to plaintiff.

In 1920, as above stated, the bank failed, and it was then discovered that Burney had, by manipulation of the books, kept them fair on their face and showing the proper balances, although as a matter of fact the bank was several hundred thousand dollars short in its funds and had been in an insolvent or failing condition for five or six years was then also discovered that the notes Burney had sold plaintiff, and which purported to be signed by solvent persons of the county, were forgeries.

The check which Burney drew up and had plaintiff to sign was payable to "C. I." though plaintiff did not know it, being unable to see on account of age as heretofore stated. The bank's bookkeeper testified that "C. I." was an abbreviation for "certificates of indebtedness" issued by the U. S. government for short loans. On what is called the bank's "blotter" Burney had entered the transaction with plaintiff as being a sale to him of certificates of indebtedness. The evidence is clear, positive, and direct, however, that no certificates of indebtedness were sold to plaintiff, and that all he received for his check was the three notes which were worthless, being forgeries. Indeed, there is no evidence that the bank owned or had any certificates of indebtedness. The bookkeeper says the books show that they did, but she also states that the books were falsified by Burney to such an extent that they were wholly unreliable, and that all that she knew about the matter was what the books showed on their face. There was certainly no evidence to show that any certificates of indebtedness left the bank, nor was there any evidence as to where the proceeds of the check plaintiff gave, or the cash represented thereby, went. All that does appear is that plaintiff's deposit was reduced the amount of the check.

It is manifest, therefore, that plaintiff got nothing for his check and no property of the bank was turned over to him in exchange for the reduction made in the amount of his deposit. Hence, unless plaintiff's rights are affected by the matters hereinafter discussed, the relation of debtor and creditor between the bank and plaintiff, created by the deposit, was not affected by the check, but the bank still owed plaintiff the same amount of money. Musgrove v. Macon County Bank, 187 Mo. App. 483, 494, 174 S. W. 171; Dixon v. Jackson Exchange Bank, 149 Mo. App. 585, 129 S. W. 481. The deposit made the bank the debtor of the plaintiff, and though, prima fade, the check signed by plaintiff might show a proper disposition of that part of the deposit, yet when the evidence clearly showed that plaintiff got nothing whatever for the check, the burden was then on the bank to show that he did or that there was a proper disposition of that part of said deposit. Padgett v. Bank of Mountain View, 141 Mo. App. 374, 125 S. W. 219. Nothing of this kind was done however. So that, unless plaintiff's rights are affected by the matters hereinafter discussed, which are urged by defendants, plaintiff's right to the deposit is not affected or reduced by the fact that the above-named check was given.

Point seems to be made that as Burney was president and not cashier of the bank he was not invested with the apparent authority plaintiff thought he had, and therefore, the latter is without remedy. It Is perhaps true that, ordinarily, the powers of a bank president are not so important or extensive as those of the cashier. The former is, more strictly speaking,...