House-Evans Co. v. Mattoon Transfer & Storage Co., HOUSE-EVANS

• Decision Date: 12 October 1954
• Docket Number: No. 36169,HOUSE-EVANS,36169
• Citation: House-Evans Co. v. Mattoon Transfer & Storage Co., 275 P.2d 268 (Okla. 1954)
• Parties: COMPANY, Plaintiff in Error, v. MATTOON TRANSFER AND STORAGE COMPANY et al., Defendants in Error.
• Court: Oklahoma Supreme Court

Page 268

275 P.2d 268

1954 OK 271

HOUSE-EVANS COMPANY, Plaintiff in Error, v. MATTOON TRANSFER AND STORAGE COMPANY et al., Defendants in Error.

No. 36169.

Supreme Court of Oklahoma.

Oct. 12, 1954.

Syllabus by the Court.

One who obtains possession of a check upon an unauthorized or forged endorsement of the payee's signature, and has collected the amount of the check from the drawee, is liable for the proceeds thereof to the payee owner, notwithstanding the proceeds have been paid to the person from whom the check was obtained.

Houston, Klein, Melone & Davidson, John S. Treadway, Tulsa, for plaintiff in error.

Marvin T. Johnson, Tulsa, for defendants in error.

WELCH, Justice.

House-Evans Company sued Mattoon Transfer and Storage Company and the First National Bank and Trust Company for the amount of the proceeds of a certain draft collected by the said First National Bank from the drawee bank and credited to the account of the Mattoon Company. Upon motion of the defendant Mattoon Company it was ordered that Delores Grayson, Luther Grayson and Bankers Investment Company be made additional parties defendant. The defendant Mattoon Company, by answer, made denial of the allegations of the plaintiff's petition and averred that plaintiff's action and claim is barred by laches. By way of cross-petition the said defendant prayed recoupment against Delores Grayson, Luther Grayson and Bankers Investment Company in event any judgment is rendered against the said Mattoon Company. The defendant, First National Bank and Trust Company, in its answer denied certain of the allegations made in the plaintiff's petition, and averred that plaintiff is guilty of laches. The defendant Bank and Trust Company by way of cross-petition prayed judgment against the Mattoon Company in event of a judgment for plaintiff against said defendant, Bank and Trust Company. No service was obtained upon Delores Grayson and Luther Grayson, and neither made an appearance in the case. The Bankers Investment Company appeared at the trial of the case.

At trial it was shown that the plaintiff repaired a wrecked automobile at the instance of Luther Grayson and that plaintiff awaited an insurance check for payment for its service.

A certain insurance company issued a draft for $283.23 payable through a certain named bank of Wichita, Kansas, and payable to the order of Luther Grayson, Delores Grayson, Bankers, Investment Company, and the plaintiff. The face of the draft contains the words 'Claim Auto,' and in substance the draft recites that the amount thereof is tendered in payment for loss and damages.

Delores Grayson tendered the said draft, which then purported to bear the endorsements of all payees, to the defendant Mattoon Company. Unknown to the plaintiff payee its name had been endorsed by forgery on the back of the draft. The Graysons were indebted to the said Mattoon Company for storage of household goods in the amount of $65.13. The said Mattoon Company received the draft and paid Delores Grayson the sum of $218.12. Subsequently the draft bearing the stamped endorsement of the Mattoon Company and the First National Bank & Trust Company of Tulsa, was paid through the drawee bank, and credited to the account of the Mattoon Company, in the First National Bank & Trust Company.

Several months thereafter the plaintiff first learned of the transaction whereby the Mattoon Company had received the draft and collected the proceeds thereof as aforesaid, and several months thereafter the plaintiff filed its suit against the Mattoon Company and the Tulsa Bank.

The trial court rendered judgment for the plaintiff and against the Mattoon Company, but only for the sum of $65.13.

The plaintiff appeals, and contends the judgment as rendered is erroneous in that under the evidence the plaintiff was shown entitled to joint judgment against the defendants, the Mattoon Company and the Tulsa Bank, and for the full amount of the draft ($283.23). The plaintiff also suggests the defendant Tulsa Bank in turn is entitled to a judgment against the Mattoon Company, as a prior endorser, for the amount of the plaintiff's judgment as against said defendant bank.

The evidence is not in dispute. The insurance company's draft, in which Luther Grayson, Delores Grayson, Bankers Investment Company, and the plaintiff, House-Evans Company, are named payees, was received by the Bankers Investment Company, who owned no interest in the draft or the proceeds thereof. The Bankers Investment Company endorsed it and delivered it to the Graysons, other payees, who endorsed it and delivered it to the defendant Mattoon Company. The said company, through the defendant Tulsa Bank, collected the proceeds of the draft.

We think the evidence reasonably establishes the fact that the draft was issued by the insurance company in payment for services by the plaintiff in repair of damages to the Grayson's automobile, and,...