Edwards v. Thomas

• Citation: 66 Mo. 468
• Parties: EDWARDS et al., Appellants, v. THOMAS.
• Decision Date: 31 October 1877
• Court: United States State Supreme Court of Missouri

66 Mo. 468

EDWARDS et al., Appellants,

v.THOMAS.

Supreme Court of Missouri.

October Term, 1877.

Appeal from St. Louis Court of Appeals.

The principal defense relied on was that Drew had endorsed the note sued on in the name of the Dock Company for the accommodation of T. P. Morse & Co., without the knowledge or consent of the company. Among the declarations of law prayed by the plaintiff and refused by the court, were the following:

6. If the court, sitting as a jury, finds that the plaintiffs purchased the note sued on, or the original note of which the former was a renewal, of R. M. Renick & Co., brokers, into whose hands the general financial agent in charge of the business of the Sectional Dock Co., a partnership of which defendants were members, had placed the same for discount, relying upon representations made to them by said brokers, that the proceeds of the note were intended for the benefit of the said Sectional Dock Co., the court declares that it is immaterial for the purposes of this action whether said representations were true or false; and that the defendants are bound by said representions, whether true or false.

10. If the court, sitting as a jury, finds from the evidence that the defendants were members of the firm of the Sectional Dock Co. in the petition mentioned; that said firm, by its general financial agent, occupied or used conjointly with the firm of T. P. Morse & Co., an office at the corner of 3rd and Olive streets, in St. Louis, Missouri, and had so done for a long time prior to the making of the note sued on, and continued so to do for a considerable time afterwards, and until the time of the appointment of Daniel G. Taylor, as administrator of said firm estate of the Sectional Dock Co., and had signs at said office indicating the same as its place of business, which signs were known to the said administrator to be there after he was appointed, but were not removed by him and remained at said office until after the maturity of said note; that said administrator did not set up at said office any sign indicating a removal of said office of the Sectional Dock Co., nor did he indicate in his published advertisements of his appointment, nor in any other public manner, the place where he kept his office for the business of said company; that the said notary who protested the note sued on, had previously gone to the same office to present a note of which the Sectional Dock Co. was maker, and had there been directed to the place where he might find the financial agent of the company dining, and having gone to the place indicated, he presented the note to said agent, and it was paid; that the notary had no notice of the removal of the office of said Sectional Dock Co., from said office, and did not know that said financial agent was no longer such; that during business hours on the day of the maturity of the note sued on, the notary left notice of the dishonor of said note at said office with the person who had been previously the financial agent of said company, and, as such, had endorsed said note with the addition of his name as such agent, and who was then found by said notary in said office in charge thereof; then the court declares the law to be, that such service of the notice of the dishonor of said note is sufficient, notwithstanding the fact that said administrator had previously qualified as administrator of said company, and was then carrying on the business thereof as such, and said former agent had no power or authority to act for said company, and the business of said company was then in fact, but without the knowledge of said notary, conducted at another and different office in said city, than said office at Third and Olive streets.

Among the declarations of law prayed by defendants, and given by the court, were the following:

1. The defendants are not liable in this action, unless the court finds from the evidence, that they, together with John D. Daggett, Ann Eliza Hartshorn, wife of Saunders W. Hartshorn, Robert C. Rogers, executor of Patrick Rogers, constituted the firm, or copartnership known as “Sectional Dock Company,” as alleged in the petition.

3. The power or authority from the “Sectional Dock Company” to Charles Drew, Jr., to endorse the name of said company upon the note sued on, cannot be implied from the employment of said Drew as financial agent and cashier of said company, nor from the character and course of business which said company intrusted to his management and control, and the plaintiffs when they took said note were by the face of said endorsement put to inquiry as to the authority of said Drew to make said endorsement.

4. No written power or authority from the “Sectional Dock Company,” authorizing or empowering Charles Drew, Jr., to endorse the name of said company on the note in question, having been shown, the authority or right to make said endorsement, cannot be implied from the employment of said Charles Drew, Jr., as financial agent and cashier of said company, nor from the character and course of business which said company intrusted to his management and control.

13. If it is found from the evidence in the case, that the note in suit, was discounted or sold for the benefit and accommodation of T. P. Morse & Co., and that Charles Drew, Jr., had no authority from the Sectional Dock Company to endorse their name on notes for the accommodation of said Morse & Co., and that there were such circumstances attending the making, endorsement and sale of said note, known to the purchasers or their agent, as should have put prudent men on inquiry whether or not said Drew was authorized to make such endorsement in the name of said company, then the court is requested to declare the law to be that defendants are not liable.

Plaintiffs excepted to the giving and refusing of these instructions.

John G. Chandler for appellants.

1. The facts from which the partnership was to be inferred were undisputed. Defendants were partners. Coll. on Part., §§ 601, 603.

2. If anything is well established in law, it is that the authority of the agent may be proved by implication.

2 Greenl. Ev., §§ 60, 61; Story Agency, §§ 45, 50; Cobb v. Lunt, 4 Greenleaf 503; Dews v. Greene, 16 Barb. 72.

3. Although a general authority to endorse was proved by overwhelming testimony, and then admitted at the bar, the court held that there was no evidence of authority to endorse the note in suit. That is, the plaintiffs were bound to prove by writing the authority of the agent to endorse either the identical note in suit, or notes to be used for the identical purposes for which that was used by the agent. Neither of these propositions has any legal support. Story on Agency, § 73; North River Bank v. Aymar, 3 Hill 262; Farmers' Bank v. Butchers' Bank, 14 N. Y. 624; Smith v. Clark Co., 54 Mo. 58, 77; 1 Parsons on Notes and Bills, 108; Exchange Bank v. Monteath, 17 Barb. 171; Bank v. Macleod, 7 Moore P. C. 35; Bank v. Fagan, 7 Moore P. C. 61.

4. The note was endorsed in the name of the company, with the addition of the agent's name and official designation. This constituted a representation upon the paper itself, that it was endorsed in the business and for the benefit of the principal. So endorsed, it was put, by the general agent of the company, into the hands of the brokers for discount; they offered it to plaintiffs expressly declaring that it was for the benefit of the company, and plaintiffs relying upon those representations bought it. They had a right to so rely, and defendants are bound by the representations, whether true or false. 3 Hill 67; Farmers' Bank v. Butchers' Bank, 14 N. Y. 623; Exchange Bank v. Monteath, 26 N. Y. 505; New York R. R. v. Schuyler, 34 N. Y. 30; Westfield Bank v. Cornen, 37 N. Y. 320; Bird v. Daggett, 97 Mass. 494; Madison R. R. v. Norwich Sav. Soc., 14 Ind. 457; De Voss v. Richmond, 18 Gratt. 338; 2 Kent Com. (12th Ed.) 621, note; Fairlie v. Hastings, 10 Ves. 125; 1 Phil. Ev. (5th Am. Ed.) 507, 508, 516; Perkins v. Burnett, 2 Root 30; 1 Greenl. Ev. §§ 27, 207, 208; Kerr on Fraud and Mist. 111; Wilson v. Fuller, 3 Q. B. 68, 77; Broom Leg. Max. 755.

5. The evidence shows that so far from plaintiffs having notice of any intended misapplication of the proceeds of the discount, all the facts and circumstances attending the negotiation tended to prevent suspicion. Notice means knowledge, and that of some distinct fact showing that Drew had misapplied, or intended to misapply, the proceeds. We look in vain for such a fact brought to the knowledge of plaintiffs. Horton v. Bayne, 52 Mo. 531; Lemoine v. Bank, 1 C. L. J. 529; Hamilton v. Marks, 63 Mo. 167; Collins v. Gilbert, 94 U. S. 753. These cases establish the rule that the evidence must show actual notice, not merely suspicious circumstances.

6. The notice of protest was sufficient. Drew had for years and notoriously been the general financial agent of defendants' firm. The office at Third and Olive streets had for years, and notoriously, been a place of business of defendants' firm; and continued to be held out to the world as such until after the service of the notice of protest. Taylor knew that this office had been used as an office of the firm, and that there were signs there indicating it as such, yet when he was appointed he neither removed the signs, nor put up any sign at the office showing that it was no longer to be used by defendants' firm, or by him--nor did he state in the advertisement of his appointment either where the place of business was to be, or that Drew had been removed from his agency. The notary knew this to have been the place of business of the firm, knew of no other, and had previously, in his official character, presented a note of the firm at the same place. He states that he knew of no change either in the office or the agency. As to the latter point only, the removal of Drew, the defense attempted to contradict him. The defendants themselves took no steps whatever to inform...