Good Roads Machinery Co. v. Broad Way Bank

• Decision Date: 03 March 1924
• Docket Number: No. 149.61.,149.61.
• Parties: GOOD ROADS MACHINERY CO. v. BROAD WAY BANK.
• Court: Missouri Court of Appeals

267 S.W. 40

GOOD ROADS MACHINERY CO. v. BROAD WAY BANK.

No. 149.61.

Kansas City Court of Appeals. Missouri.

March 3, 1924.

Certiorari Denied May 16, 1924.

Appeal from Circuit Court, Jackson County; James H. Austin, Judge.

"Not to be officially published."

Action by the Good Roads Machinery Company against the Broadway Bank. Judgment for plaintiff, and defendant appeals. Affirmed.

Watson, Gage & Ess, of Kansas City, for appellant.

G. C. Weatherby and Edwards, Kramer & Edwards, all of Kansas City, for respondent.

ARNOLD, J.

This is an action in conversion to recover the proceeds of a cashier's check drawn in plaintiff's favor, and cashed by defendant upon an alleged unauthorized indorsement, and upon which defendant received payment from the issuing bank.

The suit originated in the court of a justice of the peace of Jackson county, Mo., upon a statement filed therein. Plaintiff was a manufacturer of machinery for road construction with headquarters in Philadelphia, Pa., having a branch office in the city of Chicago, and a subbranch of the latter in Kansas City, Mo., with one E. A. Capen in charge thereof as salesman and manager. Defendant is a banking institution at Kansas City. Mo. In the course of the business of plaintiff's Kansas City office, and for the sale of a machine, the Southwest National Bank of Commerce issued a cashier's check in the sum of $433, payable to the order of plaintiff, the Good Roads Machinery Company.

It is alleged that on August 25, 1920, the defendant wrongfully paid the amount of the said check to E. A. Capen, upon an indorsement as follows: "Good Roads Machinery Co., by E. A. Capen," and that this indorsement by Capen was without authority. Judgment was rendered in the justice court for defendant, and an appeal was taken to the circuit court of Jackson county, where the cause was tried without the aid of a jury and judgment was entered in plaintiff's favor for the amount of the check and interest. Motions for new trial and in arrest were overruled, and defendant appeals.

Before the introduction of any evidence in the circuit court, and before the trial was begun, defendant filed a motion to dismiss plaintiff's suit on the ground that the cause of action set forth in plaintiff's statement arose in the state of Missouri at a time when plaintiff was a foreign corporation engaged in transacting business in Missouri without being qualified or having a statutory license therefor. It was agreed that evidence taken on the motion to dismiss should be taken with the case. It was admitted, subject to objection as to its relevancy, that plaintiff was a foreign corporation, not licensed or qualified to transact business in Missouri, and it was shown in evidence that plaintiff maintained an office and warehouse in Kansas City, Mo., where a few of the completed machines and some supplies were kept. The testimony further showed that the plaintiff's stationery used in the Kansas City office was printed and sent out from Philadelphia and Chicago; that plaintiff's name was printed thereon, together with the Kansas City address, and that the name of E. A. Capen appeared thereon as local manager.

The testimony showed that Capen operated as manager of the local branch under a written contract which provided that he was to collect accounts and make settlements as directed by the home office, and that he was to remit to the home office within one day after receiving said proceeds. Clause 4 of said contract is as follows:

"To lend your effort and support to the credit department of the home office in the collection and settlement of all accounts for which you are responsible; to assume all extraordinary expense in connection with the collection of any such accounts as the company may see fit to contract through the home office; and to remit collections in full within one day after receiving same."

Under the express terms of the contract Capen was charged with the collection of the accounts for which he sold the machinery. There is nothing of record to show to whom the machine was sold in the payment of which the cashier's check was issued. Previous to the transaction in question Capen had opened a checking account in his own name with the defendant bank, but no account in said bank was opened in the name of plaintiff. The cashier's check in question was issued by the Southwest National Bank of Commerce of Kansas City, Mo., on August 25, 1920. Thereafter, on August 28th, Capen presented said check to the defendant bank for cashing, with the indorsement thereon as stated above, and cash in the amount of the face of the check was delivered to Capen. Defendant in due course presented the check, indorsed as above stated, to the Southwest National Bank of Commerce, and received payment therefor.

The evidence shows that on numerous occasions, prior to the circumstances in issue in this case, Capen had drawn through defendant bank sight drafts against plaintiff which had always been paid, and numerous checks executed in favor of E. A. Capen and drawn by plaintiff had been placed to the credit of Capen in defendant bank. Shortly after the cashier's check in question was cashed, Capen absconded. The statement filed in the justice court charges that E. A. Capen was without authority to indorse plaintiff's name on said check, or to receive the proceeds thereof; that, by reason of the wrongful payment of said check by defendant to E. A. Capen, plaintiff has been wrongfully deprived of the money and proceeds thereof, and that defendant is indebted to plaintiff therefor.

Appellant urges upon our consideration, first, that the court erred in refusing to sustain its demurrer offered at the close of all the evidence. The allegations in the statement pertinent to the right of recovery are:

"That the said E. A. Capen had no authority whatsoever to indorse the plaintiff's name on said check nor to receive the proceeds of said check nor the money called for by said check; that, by reason of the wrongful payment of said check by the defendant to the said E. A. Capen, the plaintiff has been deprived of the money and proceeds represented by said check and has received nothing by virtue of said check."

Defendant points out that plaintiff's right to recover is based upon the conversion by the defendant of the proceeds of said check, while plaintiff contends that the action is one for conversion of the cheek as distinguished from the proceeds of the check. The evidence shows that the proceeds of the check were delivered in cash to Capen in person, and that the amount was not deposited to Capen's account, and that Capen was not indebted to the bank. There is neither allegation nor proof that defendant conspired with Capen to deprive ...