Hamlin's Wizard Oil Co. v. United States Express Co.

• Decision Date: 16 October 1914
• Docket Number: No. 9452.,9452.
• Citation: 106 N.E. 623,265 Ill. 156
• Parties: HAMLIN'S WIZARD OIL CO. v. UNITED STATES EXPRESS CO.
• Court: Illinois Supreme Court

265 Ill. 156

106 N.E. 623

HAMLIN'S WIZARD OIL CO.

v.UNITED STATES EXPRESS CO.

No. 9452.

Supreme Court of Illinois.

Oct. 16, 1914.

Error to Branch D Appellate Court, First District, on appeal from Municipal Court of Chicago; Wm. N. Cottrell, Judge.

Action by Hamlin's Wizard Oil Company against the United States Express Company. A judgment for plaintiff was affirmed by the Appellate Court, First District (184 Ill. App. 493), and defendant brings certiorari. Affirmed.Winston, Payne, Strawn & Shaw, of Chicago (Silas H. Strawn, Edward W. Everett, and Walter H. Jacobs, all of Chicago, of counsel), for plaintiff in error.

Hamlin & Topliff, of Chicago (Louis M. Greeley and Morris St. P. Thomas, both of Chicago, of counsel), for defendant in error.

CARTWRIGHT, C. J.

The Appellate Court for the First District affirmed a judgment recovered by defendant in error, Hamlin's Wizard Oil Company, upon a verdict directed by the municipal court of Chicago against the plaintiff in error, the United States Express Company, for $20,107.08, the amount of 100 checks and drafts, with interest thereon, which were payable or indorsed to the order of the defendant in error and which the plaintiff in error received and collected under indorsements of the defendant in error which were alleged to have been forged. A writ of certiorari was granted for the purpose of reviewing the judgment of the Appellate Court.

Plaintiff is a corporation which was engaged for more than 20 years in the manufacture and sale of proprietary medicines. It employed a large number of traveling men engaged in selling its products throughout the United States and Canada, and their salaries and expenses were paid by express money orders. It also used money orders to pay claims of its customers against it. Defendant is a corporation which during the same period was engaged in the business of transmitting money, merchandise, and other property by express, and it maintained an office in Chicago where it issued money orders to its patrons. During the period mentioned the plaintiff purchased all of its money orders from the defendant and used them in the same manner as checks or drafts, as a convenient method for transmitting funds to its traveling men and customers. In 1899 A. M. Walsh was employed by the plaintiff in its advertising department, and in 1901 he was placed in charge of the company's books, and from that time until February 15, 1910, when he disappeared, he had entire charge of the books, including the journal, cashbook, daybook, and ledger. He was found dead in Philadelphia on March 1, 1910, and an audit of the books kept by him showed that he had, during his employment as bookkeeper, defrauded the corporation of about $50,000. The suit was begun as a firstclass case based on an implied contract, and the claim filed covered the period not barred by the statute of limitations. Remittances by checks and drafts received from customers passed through the hands of Walsh, and he entered them upon the books and acknowledged their receipt. He paid bills, had charge of the bank account, transmitted funds to the traveling men and customers, and was given checks for large sums of money, payable to his order, to pay freight and other accounts and to buy money orders and supply cash for the petty cash drawer. During his employment as bookkeeper he was sent every four or five days to the defendant to buy money orders for remittances by the plaintiff and was furnished with checks for that purpose drawn by the corporation through its proper officers, payable to his order, and he was furnished with a written list of the money orders to be purchased. Sometimes he was given a check for part and cash for the remainder, and sometimes the check exceeded the total of the money orders. It was his duty to buy the money orders mentioned in the list with the funds provided and the bring back the money orders and whatever cash balance there might be if the checks exceeded the amount of the orders, and he always returned from the defendant's office with the proper money orders and the cash balance, if there was any. The 100 checks and drafts sued for were remitted by customers and were drawn or indorsed payable to the order of the plaintiff and came into his hands, and upon them it was alleged that he forged the indorsement of the plaintiff and with them bought money orders. The defendant received the checks and drafts sued for and issued to the plaintiff 382 money orders in exchange for them, all of which contained on their face, ‘Name of remitter, Hamlin's W. O. Co.’ Some of these orders were payable to the order of persons with whom the plaintiff never had any dealings, and others were payable to the order of traveling men or customers and bore the genuine indorsement of the payees and were charged to them on the books by Walsh, so that the plaintiff had the benefit of the latter orders. Other orders were payable to salesmen and customers, but Walsh disposed of them and did not charge the amounts to the salesmen or customers or credit them to the plaintiff. One hundred and twelve of the money orders were issued to traveling men and customers and were charged to them on the books, and 270 were either payable to persons with whom the plaintiff never had any business or were not charged on the books or used for its benefit. The frauds of Walsh were covered up by falsifying his books of account. He began his forgeries as early as 1902 and continued until he left the plaintiff's employment. The checks and drafts were indorsed in this form, ‘Hamlin's Wizard Oil Co., J. A. Hamlin, President,’ or the signature appended was that of L. B. Hamlin, president, or L. B. Hamlin, vice president, L. B. Hamlin having become president after the death of J. A. Hamlin.

[1] The plaintiff offered in evidence the 100 checks and drafts, together with testimony that the indorsements thereon were not in the handwriting of the officers of the plaintiff appearing thereon but were in the handwriting of Walsh, and closed its case in chief. It is contended that the court was not authorized to direct a verdict because such evidence was not sufficient to establish a forgery, but plaintiff was bound also to prove that the officers, J. A. Hamlin and L. B. Hamlin, never authorized Walsh to sign their names or the name of the company for the purpose of indorsing the checks. It has been held that in a civil case evidence that an indorsement is not in the handwriting of the alleged indorser is prima facie sufficient to justify a judgment based on the fact that the indorsement is not a valid indorsement of the payee. Schroeder v. Harvey, 75 Ill. 638. The evidence established prima facie that the indorsements were not indorsements of the plaintiff.

[2] The books were not honestly kept by Walsh and did not truthfully represent the accounts, but the defendant offered in evidence various entries in them...