Kansas City Casualty Co. v. Wesport Ave. Bank

• Decision Date: 14 June 1915
• Docket Number: No. 11604.,11604.
• Citation: 177 S.W. 1092,191 Mo. App. 287
• Parties: KANSAS CITY CASUALTY CO. v. WESPORT AVE. BANK.
• Court: Missouri Court of Appeals

177 S.W. 1092

191 Mo. App. 287

KANSAS CITY CASUALTY CO. v. WESPORT AVE. BANK.

No. 11604.

Kansas City Court of Appeals. Missouri.

June 14, 1915.

Rehearing Denied July 2, 1915.

Appeal from Circuit Court, Jackson County; J. A. Guthrie, Judge.

Aetion by the Kansas City Casualty Company against the Wesport Avenue Bank. From a judgment for plaintiff, defendant appeals. Affirmed.

Heidelberger & Houston, of Kansas City, for appellant. McCune, Harding, Brown & Murphy and Blatchford Downing, all of Kansas City, for respondent.

ELLISON, P. J.

Plaintiff's action is for conversion of number of checks which were drawn by various retail customers, on their respective local banks, in favor of the Inter-City Grocery Company, in payment of accounts due for purchases from the latter company. The cause of action for the conversion was assigned by the latter company to plaintiff. It appears that the Inter-City Grocery Company was a wholesale institution who had in its employ one J. S. Bell as a traveling salesman. He had authority to accept checks from his customers for accounts, payable to the Inter-City Grocery Company, but did not have authority to transfer such checks by indorsement or otherwise. Bell did his private banking business with defendant, and the grocery company, in writing to customers for payment of their accounts, learned from them that they had paid Bell by checks which, in some instances, were sent in to the grocery company marked as canceled. In that way it was discovered that Bell had indorsed them to the defendant bank by signing the grocery company's name, per himself, and had them placed to the credit of his private account, and that defendant had collected them from the various local banks on which they were drawn.

Since plaintiff's right depends entirely upon the right of the grocery company, we need only consider what right the latter has. Defendant insists that it had none, and to sustain such insistence relies strongly on Grocer Co. v. Bank, 71 Mo. App. 132, wherein it is decided that there is no privity of contract between the payee of an ordinary check and the bank upon which it is drawn, and hence that such payee has no right of action against the bank which has paid the check on his forged, or otherwise unauthorized, indorsement. The action in that case was in contract against the bank upon which the check was drawn; while this action is in conversion against an intervening, or rather an intermeddling, bank. The same may be said of Biscuit Co. v. Grocer Co., 143 Mo. App. 300, 126 S. W. 996, where the action was against the drawee of a draft. But we will not avoid the question presented on the ground of a difference between those cases and this, so far as rights in contract may be concerned. We concede that there was no privity of contract between the Inter-City Grocery Company and defendant, and hence no right to sue defendant upon a contract existed or was assigned to this plaintiff; and thus we fully recognize the soundness of that class of authority in which Grocer Co. v. Bank, supra, has placed the courts of this state.

But the present action is not ex contractu; it is ex delicto. Defendant bank has not contracted to pay the Inter-City Grocery Company the amount of the checks in controversy, but it has wrongfully intermeddled with them to the exclusion and in disregard of the rights of the true owners, and that is a conversion. A conversion is "any distinct act of dominion wrongfully exerted over one's property, in denial of his right, or inconsistent with it." 2 Cooley on Torts, 859.

Personal property, as understood in these definitions, includes choses in action such as notes, bills, checks, and other representatives of value; for a representative of value is itself a thing of value. Hence it has been decided that an army commissary voucher or a writ of execution may be converted. Koch v. Branch, 44 Mo. 542, 100 Am. Dec. 324; Keeler v. Fassett, 21 Vt. 539, 52 Arc. Dec. 71. So may a certified account. O'Donoghue v. Corby, 22 Mo. 393. And a promissory note. Richardson v. Ashby, 132 Mo. 238, 249, 33 S. W. 806; Vanstandt v. Hobbs, 84 Mo. App. 628; Kaufman v. Bank, 151 Mich. 65, 114 N. W. 863, 18 L. R. A. (N. S.) 630, 123 Am. St. Rep. 259; Warren v. Smith, 35 Utah, 455, 100 Pac. 1069, 136 Am. St. Rep. 1071. And so may a share or certificate of stock. Newman v. Trust Co., 189 Mo. 423, 88 S. W. 6; Withers v. Bank, 67 Mo. App. 115. And a draft. Williams v. Wall, 60 Mo. 318. Checks such as these in controversy are regarded in the same way, as is evidenced by several cases. Blum v. Whipple, 194 Mass. 253, 80 N. E. 501, 13 L. R. A. (N. S.) 211, 120 Am. St. Rep. 553; Schmidt v. Bank, 64 Hun, 298, 19 N. Y. Supp. 252; Buckley v. Bank, 35 N. J. Law, 400, 10 Am. Rep. 249; Lovell v. Hammond Co., 66 Conn. 500, 510, 34 Atl. 511; Krager v. Pierce, 73 Iowa, 359, 35 N. W. 477; Columbia Mill Co. v. Nat. Bank, 52 Minn. 224, 53 N. W. 1061; Feiner v. Folsom, 79 N. Y. Supp. 1099; Graton v. Redelsheimer, 28 Wash. 370, 379, 68 Pac. 879; 28 Am. & Eng. Encyc. of Law, 649; 2 Cooley on Torts, 856.

And the measure of damages is prima facie the face value of the paper converted. O'Donoghue v. Corby, 22 Mo. 393; Lovell v. Hammond Co., 66 Conn. 510, 34 Atl. 511; Graton v. Redelsheimer, 28 Wash. 379, 68 Pac. 879.

It is suggested that the Inter-City Grocery Company is not harmed if there is a denial of a right to hold the defendant bank, for the reason that it may yet recover from the makers of the checks. But that plea will not excuse defendant's wrongful act. The grocery company had a choice of remedies; one of them being for the wrong done by defendant. The suggestion is well disposed of in Salomon v. Bank, 59 N. Y. Supp. 407, in these words:

"A person or corporation who converts a promissory note or check to his or its own use is liable in damages for the conversion in an amount equal to the amount due on the promissory note or check [citing authorities]. This action is in no sense an action on contract. Undoubtedly, the plaintiffs had a right to sue the makers of the checks, respectively; but they have elected to avoid the burden of bringing 24 suits against the drawers of the checks,...