German Nat'l Bank v. Studley

• Decision Date: 28 February 1876
• Citation: 1 Mo.App. 260
• Parties: GERMAN NATIONAL BANK, of Chicago, Respondent, v. ROBERT P. STUDLEY, Appellant.
• Court: Missouri Court of Appeals

1 Mo.App. 260

GERMAN NATIONAL BANK, of Chicago, Respondent,

v.ROBERT P. STUDLEY, Appellant.

St. Louis Court of Appeals, Missouri.

Feb. 28, 1876.

1. An instruction assuming the existence of facts not proved, or as to which the evidence is contradictory, is properly refused.

2. Though a general power to indorse or make promissory notes on behalf of his principal will not warrant an agent in putting the name of his principal to paper for the accommodation of the agent or a third party, yet where this is done with the assent of the principal, for the purpose of taking up paper upon which the principal is already liable as accommodation maker or indorser, the principal will be bound.

APPEAL from St. Louis Circuit Court.

Affirmed.

M. L. Gray, for appellant, cited: Chouteau et al. v. O. D. Filley, 50 Mo. 174 (begin on p. 177); State of Missouri v. Bank of Missouri, 45 Mo. 538; Pars. on Notes & Bills, 91; Story on Ag. (8th ed.) 185, sec. 147; Wood v. Goodridge, 6 Cush. (Mass.) 117; Story on Ag. (8th ed.) 256, sec. 210; Back v. Ayman, 3 Hill (N. Y.), 262; Stiner v. Taylor, 3 Hill (N. Y.), 279.

Finkelnburg & Rassieur, for respondent, cited: 1 Pars. on Notes & Bills, 108, 142.

BAKEWELL, J., delivered the opinion of the court.

This is a suit on a negotiable promissory note dated Chicago, July 8, 1871, for $1,000, with interest from date at 6 per cent., payable twelve months after date, to the order of R. P. Studley & Co., and indorsed “R. P. Studley & Co.” The note is made by William H. Rice.

It appears that the name of R. P. Studley & Co. was not written by R. P. Studley himself, who, at the time, was trading alone as R. P. Studley & Co., but by one Edward P. Rice, his former partner; and the defense relied upon is that Rice was not authorized to indorse the note, and that the indorsement was made without the knowledge or consent of defendant.

The evidence shows that defendant and Edward P. Rice were partners in St. Louis, from 1862 till March 20, 1870, as R. P. Studley & Co., at which time the partnership was dissolved; but Rice remained with Studley for two years longer, as his general business and financial agent, keeping his books and attending to his discounts and collections, and making, indorsing, and accepting commercial paper for Studley by the name of R. P. Studley & Co., in virtue of a power of attorney, executed by Studley the day after their dissolution, which expressly constituted Rice the general agent of Studley, and gave him power, at discretion, to make, accept, and indorse any and all mercantile paper for R. P. Studley & Co. Under this general power, Rice, with Studley's knowledge, indorsed, accepted, or made mercantile paper to the amount of about $100,000, in two years.

It also appeared that, in 1868, a brother of Edward P. Rice, William H. Rice, of Chicago, who had for two or three years been in embarrassed circumstances, failed. At that time Studley & Co. were liable on William H. Rice's paper as accommodation acceptors to about $30,000. This indebtedness was carried along, in Chicago banks principally, and gradually reduced by the giving of new paper of Studley & Co., and payments by Edward P. Rice, until it was reduced to about $5,000 at the time of the dissolution of the partnership of Studley and Rice. Of these transactions Studley was aware, at least in a general and confused way. He knew that his name was being used by Edward P. Rice, in Chicago banks, to help his brother William, and he consented to it. In 1868 Studley signed the firm name himself to renewal acceptances, growing out of these transactions, to the amount of $12,500. If he did not understand the full details, and know exactly to what amount he was liable from time to time on this paper, it appears to have been because he chose to leave the whole thing to be managed by Edward P. Rice, who was unwilling to harass Studley with details of a dangerous negotiation into which Studley had been led out of kindness to Edward Rice, and into which Edward Rice had been drawn by a hope to save his brother. About the date of the dissolution of copartnership, Edward P. Rice went, at Studley's suggestion, to Chicago; Studley & Co. being then liable for about $5,000, principally in Chicago banks, on account of accommodations for William H. Rice. Renewals were then obtained for sixty and ninety days, and, when they matured, the matter was arranged with the bank that held the paper, by taking 80 per cent. for the debt. Two notes of William H. Rice at one and two years, respectively, for $1,000 each, and one note of William H. Rice for $800, all indorsed by Studley & Co., and one note of William H. Rice, without indorsement, were to be delivered to the bank in pursuance of this understanding. The notes were made and delivered to the bank, and the indorsement of R. P. Studley & Co. made by Edward P. Rice. The note sued on is one...