Hennessy Bros. & Evans Co. v. Memphis Nat. Bank

• Decision Date: 04 May 1904
• Docket Number: 1,246.
• Citation: 129 F. 557
• Parties: HENNESSY BROS. & EVANS CO. v. MEMPHIS NAT. BANK
• Court: U.S. Court of Appeals — Sixth Circuit

129 F. 557

HENNESSY BROS. & EVANS CO. v. MEMPHIS NAT. BANK

No. 1,246.

United States Court of Appeals, Sixth Circuit.

May 4, 1904

W. A Percy and T. K. Riddick, for plaintiffs in error.

Carroll McKellar, Bullington & Biggs, for defendant in error.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

SEVERENS Circuit Judge.

There are counterwrits of error in this case, on which each party prays for the reversal of the judgment rendered by the court below, and there are bills of exceptions taken by each. But the errors complained of on each side relate to one controversy, and may be considered together.

Hennessy Bros. & Evans Company, a building corporation organized under the laws of Illinois, and located at Chicago, entered into large contracts during the year 1900, for building in the city of Memphis, Tenn., involving the employment of several hundred thousand dollars, and sent its assistant secretary John D. Evans, who had executed the contracts in its behalf to Memphis, to superintend its business there. On account, as we must suppose, of the frequently recurring financial necessities of his company at Memphis, Evans, in its behalf, and with its knowledge and assent, opened an account with the Memphis National Bank in November of that year. On December 26, 1900, the account of the company was overdrawn, and, to cover the overdraft, he gave to the bank a note, payable on demand, for $4,500, and signed in the company's name 'by John D. Evans Asst. Secy.,' the entire amount of which was placed by the bank to the credit of the company in its account. In April, 1901, the account being again overdrawn, Evans gave the bank another note payable in 30 days, for $2,000, signed in the same way, and the proceeds were put to the credit of the company in its account. This last note was renewed three times; the last renewal having been made July 17, 1901, by a note for the same amount payable on demand. The company had a passbook in which the account was frequently balanced by the bank and returned to the company. The entries in the passbook showed the credits of the $4,500 and of the proceeds of the $2,000 note as of the date when the notes were given. This account, consisting of debits and credits, continued from November, 1900, to September 1901, at about which time John D. Evans disappeared; being, as was alleged by the company, a defaulter to it for a considerable sum, which it was claimed was obtained by him by checks on the company's account with the bank, which was thereby overdrawn. Later other officers of the company settled with the bank for the overdraft then appearing, but refused to acknowledge or pay the notes of $4,500 and $2,000, respectively, upon the ground that they had been given by Evans without authority. It appeared upon the trial that from time to time the president and secretary of the company, who had general charge of its finances, went from Chicago to the Memphis office, and 'checked up' Evans' financial transactions, including those with the bank. But the company gave evidence tending to show that the passbook above mentioned was not produced to them, and that it was not seen by them until after the disappearance of Evans. But they knew that Evans had it in his possession. They also knew that, during the running of the account, overdrafts had occurred at several times, and they made no objection to the making of such overdrafts. Some other facts appear in the course of this opinion, but it is believed that those most material have now been stated.

The bank brings this suit to recover the amount of the two notes above mentioned, and adds the common counts, on which it claims that, if it cannot recover upon the notes themselves it may be allowed to recover the amounts which they represent as having passed to the credit of the company, of which it had the avails, as money had and received. As to the notes the company pleaded that they were never authorized, and, as to the other counts, it pleaded the general issue. Upon the trial, the making of the notes having been proved in the circumstances already stated, the defendant called as witnesses the president and other officers of the company, who gave general evidence denying that Evans was authorized to sign the notes for the company, and denying that the company ever had knowledge of the making and using said notes until after the disappearance of Evans, and that it had never ratified them. Assuming that an issue was thus established upon the evidence, the court permitted the parties to go into evidence in respect to the question as to the question as to whether the defendant had received benefit from the overdrafts which the notes represented, and, if so, how much. A prolonged inquiry was entered upon for the purpose of ascertaining what debts of the company had been paid by checks made by Evans on the bank, a considerable number of which were traced to the company's creditors. At the close of the testimony the plaintiff asked for an instruction that a verdict should be rendered for the plaintiff for the amount of the notes, with interest. This request was refused, and the plaintiff excepted. The court, in its instruction to the jury, left open for their...