Koontz v. Cent. Nat'l Bank of Booneville

• Decision Date: 31 January 1873
• Citation: 51 Mo. 275
• Parties: GEO. W. KOONTZ and L. E. KOONTZ, his wife, Defendant in Error, v. THE CENTRAL NATIONAL BANK OF BOONEVILLE, MO., Plaintiff in Error.
• Court: Missouri Supreme Court

51 Mo. 275

GEO. W. KOONTZ and L. E. KOONTZ, his wife, Defendant in Error,

v.THE CENTRAL NATIONAL BANK OF BOONEVILLE, MO., Plaintiff in Error.

Supreme Court of Missouri.

January Term, 1873.

Error to the Cooper County Circuit Court.

Draffen & Muir, for Plaintiff in Error.

I. This is a suit for money had and received, and before the defendants in error can recover they must show an express promise on the part of the plaintiff in error to pay, or such a state of facts as that the law will imply one.

II. Where money is paid to a known agent, although by mistake, the action ought to be brought against the principal, and it will not lie against the agent, except after notice, or where he has acted mala fide; the rule being respondeat superior in such cases.

McMillan Brothers, for Defendants in Error.

I. In this case the money was paid under a mistake of facts; and it is no defense that the defendant in error, Mrs. Koontz, had within her reach the means of ascertaining the truth, or that she omitted to use vigilance and care by which the mistake would have been avoided. (Marriot vs. Hampton, 2 Smith's Lead. Cas., 5th Am. Ed., 400; Kingston Bank vs. Eltinge, 40 N. Y., 391; Union Bank of Troy vs. Sixth National Bank of N. Y., 43 N. Y., 452; Citzens' Bank of Baltimore vs. Graffion, 1 Am. Rep. 66; 31 Maryland, 507; Kelly vs. Solari, 9 M. & W., 54; B. & S. R. R. Co. vs. Farmer & Passmoor, 6 Gill, 68.)

II. The rule is that money paid under mistake of fact can be recovered by the payer from the receiver, and it is no defense that he received it as agent, and has paid it over to his principal. (Kingston Bank vs. Eltinge, 40 N. Y., 399; Bank of Commerce vs. Union Bank, 3 Com., 230; Canal Bank vs. Bank of Albany, 1 Hill, 287; Rheel vs. Hicks, 25 N. Y., 289.)

III. In this case, if the plaintiff in error was the agent of the Second National Bank of St. Louis, at all, it was the agent to collect said draft of Mrs. M. A. Simpson and remit the col lection, and for no other purpose; the plaintiff in error was not authorized by the Second National Bank, either by said draft or otherwise, to collect the same from defendant in error, Mrs. Koontz. The act of plaintiff in error, in collecting said draft of Mrs. Koontz, when it was drawn on Mrs. Simpson, was its own act, for which it alone is responsible. (Sto. Ag., §§ 68, 76, 83; Paley on Agency, 102; 38 Mo., 228, 245; 46 Mo., 186; 47 Mo., 181; 1 Pars. on Notes and Bills, pages 105, 119.)

IV. It is no defense that plaintiff in error cannot be restored to his original position upon paying back the money. The rule is that where one of two must lose, the party having the legal right must prevail. (Kingston Bank vs. Eltinge, 40 N. Y., 399, 400; Rheel vs. Hicks, 25 N. Y., 289.)

V. It is no defense that Mrs. Simpson became insolvent after said draft was accepted and paid, and before plaintiff in error was notified. Defendant in error was duly diligent in notifying plaintiff in error of the mistake, having notified defendant in error as soon as said mistake was discovered. (Rheel vs. Hicks, 25 N. Y., 289 above cited; Union Bank vs. U. S. Bank, 3 Mass., 75.)WAGNER, Judge, delivered the opinion of the court.

This case was tried in the court below on an agreed statement, and the material facts are, that prior to July 1870, Mrs. Koontz was engaged in selling millinery goods in the city of Booneville, and at the same time Mrs. Simpson was also engaged in the same kind of business.

Both of them were customers of C. H. Tuttle of St. Louis, who was in the habit, from time to time, of drawing drafts on each of them for amounts due on their purchases, which drafts were sent to the Second National Bank of St. Louis, for collection, and were collected and remitted. On the 7th day of July, 1870, Tuttle drew the draft out of which this controversy arose, on Mrs. Simpson for $100.00. The collecting officer of defendant by inadvertence and mistake, presented it to Mrs. Koontz instead of Mrs. Simpson, and Mrs. Koontz under the impression at the time that she was indebted to Tuttle and that the draft was drawn on her, paid the money and took up the draft. On the same day, defendant remitted the money to the Second National Bank, stating that the collection was on account of Mrs. Koontz. At this time, Mrs. Koontz and Mrs. Simpson were both solvent.

No notice was given to the defendant of the error until the 1st of December, 1870, being after the defendant had remitted the money to Tuttle, and after Mrs. Simpson had become insolvent. The court decided as matter of law, on the agreed facts, that defendant was liable to pay the money, and accordingly gave judgment for the plaintiff. It is now alleged for error that the defendant was the mere agent of Tuttle for the collection of the money, and as it paid the same over to its principal before the discovery of the mistake, it cannot be held liable. The general rule undoubtedly is, that if a party, who pays money to an agent for the use of his principal, becomes entitled to recall it, he may, upon notice to the agent, recall it, provided the agent has not paid it over to his principal, and also provided no change has taken place in the situation of the agent since the payment to him, before such notice. Therefore, if the money has been paid over to the principal before notice of recall, the agent will not be liable, unless indeed, the receipt of the money by the agent was obviously fraudulent and illegal, or his authority to receive it was known to himself to be void. (Sto. Ag., § 300.)

But there is a large class of cases, and this appears to be one of them, in reference to the responsibility of agents, that does not come within the rule above announced. This is a case of mutual mistake, and it makes no difference that the plaintiff when she paid the draft, had the means of knowing, and might by diligence and care have avoided the payment. It...