Heath v. Paul

• Decision Date: 22 March 1892
• Citation: 51 N.W. 876,81 Wis. 532
• Parties: HEATH v. PAUL.
• Court: Wisconsin Supreme Court

81 Wis. 532

51 N.W. 876

HEATH

v.PAUL.

Supreme Court of Wisconsin.

March 22, 1892.

Appeal from circuit court, La Crosse county; A. W. NEWMAN, Judge.

Action in assumpsit by Caroline S. Heath against John Paul. Plaintiff had judgment, and defendant appeals. Reversed.

The other facts fully appear in the following statement by LYON, C. J.:

This action is to recover money alleged to have been loaned by plaintiff to defendant. From early in 1884, until after the alleged cause of action herein accrued, the defendant owned and carried on a store in the city of La Crosse. He was largely engaged in other business, and gave but little personal attention to his store, which was managed and carried on principally by agents. Among these was one Roth, who had the principal charge of making purchases of goods, (subject to some general supervision of defendant,) of making collections of store-accounts, and paying for goods and store expenses. He also had charge of the store-books and bank-accounts. Defendant kept a “store-account” at the State Bank of La Crosse, separate from his general personal account, and Roth had authority from defendant to draw checks on such store-account for the above purposes, and was required by defendant to sign them, “John Paul, store-account, R.” Roth seems to have conducted the business thus intrusted to him, from early in 1884 to some time in 1888, with fidelity, and in strict accordance with the authority thus conferred upon him by defendant. During all that time it does not appear that he borrowed any money, or attempted to do so on account of the store, or of defendant. However, he constantly accepted drafts in defendant's name drawn on defendant for the price of goods sold the store, and in like manner indorsed drafts payable to defendant drawn for goods sold from the store to the drawers thereof, and was at times allowed by defendant to overdraw the store-account at the bank. Roth became unfaithful to defendant. In 1888 he made large purchases of goods at the east, for the store, and concealed the fact from defendant. It is very evident that he was then robbing the defendant of large sums of money. To conceal his embezzlements, or to enable him to continue them successfully, probably for both purposes, Roth borrowed large sums of money from various persons at La Crosse in the latter part of 1888 and the early part of 1889, and gave therefor checks on the State Bank signed, “John Paul, store-account, R.” He borrowed $1,000 of plaintiff, December 24, 1888, and gave therefor two such checks, of $500 each, post-dated January 5, 1889. On the last-named day he borrowed $1,500 more of plaintiff, and gave two such checks therefor, of that date, one for $1,000, and the other for $500. Roth paid $700 on these checks. The balance thereof is unpaid, and this action is brought to recover the same. The complaint counts upon such checks as the cause of action. The answer of defendant is a general denial, and a specific denial that the signatures to such checks are his signatures. Testimony was given on the trial to the effect that accounts or drafts for goods sold the store were frequently sent to the La Crosse National Bank for collection, and Roth would pay them by drawing checks therefor on the State Bank, signed in the authorized form. In the latter part of 1888 Roth commenced making arrangements with the National Bank to hold such checks for short terms, and he paid the bank interest thereon for the time it so held them. At the expiration of such agreed time such checks would be presented to the State Bank and paid. Frequently, perhaps usually, these checks were overdrafts on the State Bank. Defendant was ignorant of these transactions until early in February, 1889, just as he was leaving for a southern trip, when he was informed of them by the cashier of the National Bank. The amount of checks thus held at that time had become quite large. Defendant admitted to the cashier that Roth had authority to sign such checks to pay bills against the store, and that those held by the bank were all right. He also agreed to pay interest thereon while the bank should hold them. It does not appear that defendant was informed that Roth had been paying interest on such suspended checks, or that the foregoing transactions came to the knowledge of the plaintiff until long after she had made the above loans to Roth. The testimony is further stated in the opinion. The court submitted two questions to the jury as and for a proposed special verdict. These are: (1) “Did E. J. Roth have the authority, at the time mentioned in the plaintiff's complaint, to borrow money of the plaintiff for and on account of the credit of the defendant?” and, (2) “subsequently to the loaning of such money, did the defendant ratify the transaction?” The jury answered both questions in the affirmative. A motion by defendant for a new trial was denied, and judgment entered for the plaintiff for the amount of her demand. Defendant appeals from the judgment.Losey & Woodward and E. C. Higbee, for appellant.

Fruit & Brindley, for respondent.

LYON, C. J., ( after...