Lieber v. Fourth Nat. Bank

• Citation: 137 Mo. App. 158,117 S.W. 672
• Parties: LIEBER v. FOURTH NAT. BANK OF ST. LOUIS.
• Decision Date: 23 March 1909
• Court: Court of Appeal of Missouri (US)

117 S.W. 672

137 Mo. App. 158

LIEBER v. FOURTH NAT. BANK OF ST. LOUIS.

St. Louis Court of Appeals. Missouri.

March 23, 1909.

1. BANKS AND BANKING (§ 119)—TRANSACTION WITH DEPOSITOR—NATURE.

A transaction between a bank and a depositor arising from a check on the deposit is a debit and credit account, the depositor being creditor, and the bank debtor.

2. ACCOUNT STATED (§ 1)—CHECKS—PAYMENT ON FORGED INDORSEMENT — RIGHTS OF DRAWER.

The receipt and retention without objection by a depositor of his passbook, balanced after charge against him of certain checks, did not constitute an account stated, so as to preclude him from suing the bank at law to recover the amount of the checks on discovering that they were paid on forged indorsement, and to require him to sue in equity.

3. BANKS AND BANKING (§ 148)—CHECKS— FORGED INDORSEMENT—DRAWER NOT NEGLIGENT.

On July 5, 1900, and August 26, 1902, respectively, plaintiff sent checks to his loan agent payable to supposed borrowers, and receiving notes and deeds of trust purporting to be signed by the borrowers and covering the loans. The agent, by forging the borrowers' names, obtained the proceeds, but until his suicide sent money to plaintiff covering the interest due on the notes. He was reputed to be honest up to his death. On having cause to suspect forgery, plaintiff acted promptly and notified the bank. Held, that plaintiff was not negligent so as to preclude recovery from the bank of the amount of the checks.

4. WITNESSES (§ 144)—COMPETENCY—TRANSACTIONS WITH DECEDENTS—FORGERY.

In an action by a depositor against a bank to recover the amount of checks sent by him to his loan agent to be delivered to supposed borrowers, and forged by the agent, who afterwards committed suicide, the payees were not incompetent witnesses on the ground that they were privies in contract with the deceased agent.

5. BILLS AND NOTES (§ 296)—INDORSEMENT— GENUINENESS—GUARANTY.

Every indorser of commercial paper, including bank checks, guarantees the genuineness of preceding indorsements.

6. BANKS AND BANKING (§ 148)—PAYMENT OF CHECKS—RIGHTS OF DRAWER.

Payment of a check by the drawee bank was an assurance to the drawer, that the bank had assured itself of the genuineness of preceding indorsements.

7. BANKS AND BANKING (§ 148)—PAYMENT OF CHECKS—RIGHTS OF DRAWER.

The drawer of a check was not as much bound as the drawee bank to know that the first of several indorsements was forged.

8. APPEAL AND ERROR (§ 1039)—HARMLESS ERROR—PLEADING.

In an action by the drawer of checks to recover from the drawee the amount thereof, they having been paid on a forged indorsement, omission of the petition to allege demand for payment and tender of the checks was not reversible error, where the evidence showed that plaintiff's attorney called on the drawer to secure repayment and was ready and willing to turn the checks over, and that a formal demand would have been useless.

9. APPEAL AND ERROR (§ 1008)—FINDINGS BY LOWER COURT—EFFECT.

On appeal a trial court's finding is entitled to the effect of a general or special verdict.

Appeal from St. Louis Circuit Court; Jesse A. McDonald, Judge.

Action by Arthur Lieber against the Fourth National Bank of St. Louis. From a judgment for plaintiff, defendant appeals. Affirmed.

Plaintiff in this action, respondent here, brought suit against the defendant, now appellant, to recover the sum of $2,000, paid out by defendant on checks of $1,000 each, drawn by plaintiff, it being averred that the signatures of the payees had been forged. There is practically no controversy over the facts, either as stated in the pleadings or developed by the testimony.

It appears that on the 5th day of July, 1900, the plaintiff transmitted by mail to one J. R. Penn, at Fulton, Mo., a check drawn by plaintiff on the Fourth National Bank for $1,000, to the order of one G. W. Hawkins. On the 9th of July, 1900, the check was paid by the defendant, the Fourth National Bank, to the last indorsee and then holder, the National Bank of Commerce, at St. Louis, and the amount charged to plaintiff, who was a depositor and customer of defendant. This check, with its successive indorsements, is as follows:

"No. 235. St. Louis, July 5th, 1900. Fourth National Bank of St. Louis. Cor. 4th & Olive Sts. Pay to the order of G. W. Hawkins, One Thousand 0/100 Dollars. $1000.00. Arthur Lieber."

Indorsed as follows:

"G. W. Hawkins." "Penn & Sallee." "Pay National Bank of Commerce, St. Louis, Mo., or order. Commercial Bank of Fulton, P. S. Adams, Cashier." "St. Louis Clearing House, National Bank of Commerce in St. Louis, July 9, 1900."

Afterwards, on August 26th, plaintiff mailed to the same man, J. R. Penn, at Fulton, another check drawn by him on the defendant bank, to the order of one Robert L. Bedford, which was paid by the defendant on the 4th of September, 1902, and the amount of it charged against the plaintiff in his account with the bank. That check, with its successive indorsements, is as follows:

"No. 332. St. Louis, Aug. 26th, 1902. Fourth National Bank of St. Louis. Cor. 4th & Olive Sts. Pay to the order of Robt. L. Bedford, One Thousand 00/100 Dollars. $1000.00. Arthur Lieber."

Indorsed as follows: "Pay to order of J. R. Penn. Robt. L. Bedford." "J. R. Penn." "Pay to the order of The Mechanics' National Bank, St. Louis, Mo. The Callaway Bank, Fulton, Mo., E. W. Grant, Cashier." "Sept. 4, 1902. The Mechanics' National Bank, St. Louis Clearing House."

It thus appears that the check for $1,000 to the order of G. W. Hawkins, purporting to have the indorsement of G. W. Hawkins, followed by the indorsement of Penn & Sallee, had either been deposited with the Commercial Bank of Fulton by Penn or Penn & Sallee, or cashed by that bank on the indorsement of Penn & Sallee, and that after indorsement of the Commercial Bank of Fulton to the order of the National Bank of Commerce, in St. Louis, had been put through the clearing house at St. Louis, for account of the National Bank of Commerce, in St. Louis, and taken up through the clearing house by the Fourth National Bank. The check of August 26th, it appears, was indorsed and deposited or cashed by Penn after the purported indorsement of Bedford, in the Callaway Bank, at Fulton, indorsed by that bank to the order of the Mechanics' National Bank at St. Louis, Mo., and put through the clearing house at St. Louis by the latter bank to the account of the Fourth National Bank, by which it was taken up. At the time these two checks were paid, plaintiff had ample funds to meet them on deposit with the defendant bank. From the time of the payment of the first check, in July, 1900, down to June 11, 1905, the defendant bank had balanced plaintiff's account with it on his passbook, and in due course, and in accordance with the usual practice between banks and their customers, had returned to plaintiff the checks with which his account had been charged, along with the balanced passbook. Thus, through the year 1901, plaintiff's account was balanced down to four different dates, in 1902 to five different dates, in 1903 to four different dates, in 1904 to four different dates, generally to January, March, or April, June or August, September or November, and in 1905 it was balanced down to April 8th and June 11th. On each occasion the passbook showed a balance to the credit of plaintiff, and in 1901, as well as in 1902, that balance struck covered the amount called for by these two checks, showing that they had been paid, and these two checks were returned to plaintiff at the time the account was balanced, along with his other checks paid during the same period.

It appears from the evidence in the case that this J. R. Penn, with one Sallee, was carrying on an abstract, insurance, and real estate loan and sale business at Fulton, in Callaway county, during these periods, and had been doing so for some years prior to 1900, he and Sallee doing business as partners under the name of Penn & Sallee. The plaintiff in the case, a pianist and organist at one of the churches in St. Louis, had been in the occupation of a music teacher, pianist, and organist for about 18 years, in the course of which occupation he had saved up some money, which he was desirous of loaning out on farms. His attention being called to Penn as a reliable man, he wrote to Penn, inquiring whether he could make loans for him in that part of the country. Plaintiff had no personal acquaintance with him nor any transactions with him other than by correspondence, and the letters from Penn to plaintiff are in evidence. When Penn informed Lieber that he had secured opportunities to place loans, and Lieber accepted, Penn sent him by mail what purported to be an abstract of the title to the land on which the loan was proposed to be made, bringing the abstract down to cover the proposed deed of trust securing the loan, sending with the abstract the note and deed of trust. These abstracts were certified by Penn. Upon receiving the abstract, plaintiff transmitted to Penn the check for the amount of the loan. The first one in the case, it will be remembered, was dated July 5, 1900, payable to the order of G. W. Hawkins; the second one dated August 26, 1902, to the order of Robt. L. Bedford. We have said that the notes and deeds of trust were transmitted to plaintiff before he sent the checks. It is not very clear, however, whether the transmittal of the checks preceded or followed the receipt of the notes and deeds of trust, and is not very material. At all events, plaintiff received the deeds of trust and the notes, along with the abstracts purporting to show the recording of the deeds of trust. One of the notes purported to be signed by Hawkins, one by Bedford; the deeds of trust purporting to be signed and acknowledged by the parties and their wives, Penn certifying to the acknowledgments. Thereafter Lieber received $35 interest on each loan every six months—the loans bearing 7 per cent....