Landau Grocery Co. v. Bank of Potosi

• Decision Date: 08 April 1930
• Parties: LANDAU GROCERY COMPANY, A CORPORATION, RESPONDENT, v. BANK OF POTOSI, A CORPORATION, APPELLANT. [*]
• Court: Missouri Court of Appeals

26 S.W.2d 794

223 Mo.App. 1181

LANDAU GROCERY COMPANY, A CORPORATION, RESPONDENT, v. BANK OF POTOSI, A CORPORATION, APPELLANT. ^[*]

Court of Appeals of Missouri, St. Louis

April 8, 1930

Appeal from the Circuit Court of Cape Girardeau County.--Hon. Frank Kelly, Judge.

AFFIRMED.

Judgment affirmed.

Edgar & Banta for appellant.

(1) The court should have sustained defendant's demurrer to the evidence. Before plaintiff could make a prima-facie case it was necessary for it to show: First. That McMillen had no authority to endorse the checks sued on. Second. That the proceeds of said checks were lost to plaintiff by reason of the unauthorized act of its agent, McMillen. No citation of authority should be necessary in support of the proposition that demurrer to the evidence should be sustained when there is a failure of plaintiff to make a prima-facie case. (2) The burden was on plaintiff to show what was McMillen's authority as its agent, and if, as alleged by plaintiff, its agent's authority was limited, the burden was on plaintiff to prove that fact. Harrison v. Railroad, 74 Mo. 364; 2 Corpus Juris, p. 926. (3) Where there is a lack of substantial evidence, considering all of it, to support the verdict, or finding and judgment of the trial court sitting as a jury, it is the right and duty of the appellate court to reverse. Millen v. Freeman, 136 Mo.App 106; Scroggins v. Met. St. Ry., 138 Mo.App. 220; Hubbard v. Fuchs.

Abbott Fauntleroy, Cullen & Edwards for respondent.

The evidence under the authorities is amply sufficient to sustain the finding of the court that the party signing the checks was not authorized to sign them by the plaintiff company. Kansas City Casualty Co. v. Westport Ave. Bank, 191 Mo.App. 287; 2 Corpus Juris 636-637; Strong v Commonwealth Trust Co., 199 S.W. 1034; Graham v. U.S. Savings Institution, 46 Mo. 186; Good Roads Machinery Co. v. Broadway Bank, 267 S.W. 40; Strong v. Missouri-Lincoln Trust Co., 263 S.W. 1038.

NIPPER, J. Haid, P. J., and Becker, J., concur.

OPINION

NIPPER, J.

This action was brought by the Landau Grocery Company against the Bank of Potosi to recover the proceeds of certain checks drawn by various parties, payable to plaintiff, endorsed by plaintiff's traveling salesman, G. W. McMillen, and deposited by said McMillen to his credit in said bank. It is unnecessary to refer in detail to the pleadings, except to say that the answer of the bank alleged that McMillen had authority to endorse the checks; that plaintiff was estopped to deny said McMillen's authority, and that the checks were paid by McMillen by his personal remittances to plaintiff.

The evidence discloses that McMillen was a traveling salesman for the plaintiff wholesale grocery company, and that it was his duty to sell goods and to collect there for from his customers. He had certain territory in southeast Missouri, consisting of four or five counties. He would sometimes be paid in cash by his customers, sometimes they would pay him by turning over to him certain checks given to them, or in some instances they would pay him with their personal checks drawn in favor of the plaintiff. McMillen would sometimes send these checks direct to the house, or in some instances would endorse the name of plaintiff on said checks, write his own name under such endorsement, and deposit them in the defendant bank to his own credit and in his own personal account. He would then remit to the company the amount due by sending his personal check drawn on his own account.

The plaintiff's evidence tended to show that no authority either express or implied, was given McMillen to endorse these checks, which were made payable to the plaintiff, and deposit them in his own personal account. Plaintiff's evidence was also to the effect that it had no knowledge that such was being done.

At the time this suit was instituted McMillen was no longer in the employ of the plaintiff company. He was a witness for defendant and testified that he had authority to so endorse these checks and to make the remittances in the manner in which he did, and that the company had full knowledge of this method of transacting its business, and expressly approved such method of making remittances.

The testimony of the cashier of the defendant bank shows that this had been a habit and custom of McMillen's for a long time, and that no complaint of any kind had ever been made by the company until shortly before this suit was filed. The cashier of the bank, however, testified that such bank had no express authority from the plaintiff to deposit the proceeds of checks thus drawn, to McMillen's credit, and he also stated that he had no personal knowledge that the plaintiff company knew of such acts and conduct on the part of McMillen.

The case was tried to the court without a jury. Judgment was rendered for plaintiff and defendant has appealed.

Of course, if the evidence of McMillen be true he had authority to cash these checks and make the remittances in the manner in which he did. If the evidence of plaintiff be true he had no such authority. If he had such authority the bank had no knowledge of it except the mere acquiescence of the plaintiff in McMillen's conduct, if there was such acquiescence on plaintiff's part. In our opinion, it is unnecessary to refer to the evidence in detail. This states the salient facts, or as much as we deem necessary to a proper determination of this case.

The general rule, as applied in cases of this character, is that authority to endorse commercial paper can only be implied where the agent is unable to perform the duties of his agency without the exercise of such authority, or where...