Magnolia Compress & Warehouse Company v. St. Louis Cash Register Company
| Decision Date | 04 March 1919 |
| Parties | MAGNOLIA COMPRESS & WAREHOUSE COMPANY, Respondent, v. ST. LOUIS CASH REGISTER COMPANY, Appellant |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of the City of St. Louis.--Hon William T. Jones, Judge.
AFFIRMED.
Judgment affirmed.
Rassieur Kammerer & Rassieur for appellant.
(1) The plea of non est factum in defendant's verified answer cast the burden on plaintiff of establishing the authority of the persons who executed the note in defendant's name, in order to hold defendant liable thereon. Proof that one of the persons who signed the note held the office claimed by him on the paper, was not sufficient, and the note should not have been admitted in evidence. Sanders v. Chartrand, 158 Mo. 353; Dreeben v. First Nat. Bank, 99 S.W. 850; First Nat. Bank of Kansas City v. Hogan, 47 Mo. 472; Blain & Kelly v. Express Co., 69 Tex. 74. (2) Neither the secretary nor the managing agent of a corporation has implied power to bind the corporation by executing negotiable paper; and where the power is claimed, it must be sought for in some special authorization, or in such a continued exercise of it as amounts to a holding out by the corporation, thus raising the implication of a previous authorization or a subsequent ratification. 10 Cyc. 929; 2 Corpus. Juris. 636, sec. 280; First Nat. Bank of Kansas City v. Hogan, 47 Mo. 472; Fayles v. Nat. Ins. Co of Hannibal, Mo., 49 Mo. 380; Stothard v. Aull, 7 Mo. 318; Shawhan v. Shawhan Distilling Co., 197 S.W. 371; Sanders v. Chartrand, 158 Mo. 353; Hyde v. Larkin, 35 Mo.App. 365; New York Iron Mine v. Bank, 39 Mich. 644; Sanford Cattle Co. v. Williams, 18 Colo.App. 378; McCullough v. Moss, 5 Denio 567; The Floyd Acceptances, 7 Wall 666. (3) The evidence was insufficient in law to support a verdict, and the instructions in the nature of demurrers to the evidence should have been sustained. Sanders v. Chartrand, 158 Mo. 353; Alton Mfg. Co. v. Biblical Inst., 243 Ill. 298. (4) The scope of an agent's authority cannot be shown by his own acts, when they have never come to the knowledge of the principal. Alt. v. Brosclose, 61 M. A. pp. 409; Sanders v. Chartrand, 158 Mo. 353; Hyde v. Larkin, 35 M. A. 365; Dreeben v. First Nat. Bank, 99 S.W. 850; Farrar v. Kraemer, 5 M. A. pp. 167; Williams v. Edwards, 94 Mo. 447. (5) Instructions 1 and 2, given over defendant's objection, the first on behalf of plaintiff and the second of the court's own motion, constituted error, because the jury was left at liberty to judge whether O'Hara was held out to the public as having the power to executed negotiable papers, without an instruction defining what would constitute such a holding out. Cases cited under foregoing points.
Fordyce, Holliday & White, Garber & Garber for respondent.
The judgment in this case should be affirmed. The only question involved is whether the note was executed for the corporation by one having actual or apparent authority to sign it, and this issue was properly left to the jury under appropriate instructions, and their verdict was amply supported by the evidence. Sec. 9990, R. S. 1909; Ruhe v. Buck, 124 Mo. 178, 183 et seq.; Edwards v. Thomas, 66 Mo. 468, 482-3; Higbee v. Bank, 244 Mo. 411, 426-7; Mosby v. McKee, 91 Mo.App. 500, 504-5; Johnson v. Hurley, 115 Mo. 513, 523; Law Reporting Co. v. Grain Co., 135 Mo.App. 10, 13-14-15; Sublette v. Brewington, 139 Mo.App. 410, 415; Settles v. Moore, 149 Mo.App. 724; Robinson v. Mining Co., 178 Mo.App. 531, 539-40; Meux v. Haller, 179 Mo.App. 466, 473; Phillips v. Railroad, 211 Mo. 419, 441.
This is an action on a promissory note for the sum of $ 2638.35, of date November 7, 1914, due one hundred and twenty days after date, with six per cent. interest from the date thereof, executed in the name of the defendant corporation to the order of Warrant Warehouse Company, a corporation, and which was endorsed and transferred to the plaintiff, the payee. The instrument is signed:
The verified answer of defendant contains (1) a plea of non est factum, averring that the note was executed by agents of defendant who were wholly unauthorized so to do, and whose said act was never approved or ratified by defendant; (2) a plea of failure of consideration; (3) and a plea to the effect that plaintiff is not a holder in due course.
The trial, before the court and a jury, resulted in verdict and judgment for plaintiff, and the defendant appeals.
In the year 1914 the defendant, a Missouri corporation with headquarters at the city of St. Louis, was engaged in manufacturing and selling cash registers. One J. G. R. O'Hara was secretary and general manager of the company, the other officers and the directors being business or professional men in the city of St. Louis engaged in other pursuits. The Warrant Warehouse Company, the payee in the note, and plaintiff, Magnolia Compress & Warehouse Company, were Alabama corporations, doing business in Birmingham; the former having a warehouse in Mobile, Alabama. These two companies were closely affiliated, having certain officers and directors in common, and one W. D. Nesbitt being president of both companies.
One Herck was engaged in selling, in a certain territory in the southern part of the United States, cash registers manufactured by defendant. He is referred to in some of defendant's correspondence as defendant's district manager, but it is said that he merely bought machines from defendant which he sold on his own account. In any event, in the early part of 1914 he had a contract with defendant for selling its machines in said territory, and was operating under the same. In May, or early in June, 1914, Herck, with one Whipple, called upon Nesbitt, at the office of the Warrant Warehouse Company in Mobile, in regard to making arrangements with that company for the storing and forwarding of cash registers which Herck was handling under the contract with defendant. At the suggestion of Herck and Whipple, the Warrant Warehouse Company, through Nesbitt, wrote to the defendant concerning the matter, with the result that O'Hara, defendant's general manager, went to Mobile and had a conference with Nesbitt. On O'Hara's return to St. Louis defendant, through O'Hara as manager, wrote a letter to Nesbitt, under date of June 12, 1914, referring to the relations between the defendant and Herck, and the proposed arrangement between the latter and the Warrant Warehouse Company. On that date also defendant, through O'Hara, wrote a letter to the Warrant Warehouse Company enclosing a financial statement from the St. Louis Cash Register Company as of June 1, 1914. On the following day the defendant, through O'Hara as manager, wrote a letter to Nesbitt setting out the names of the officers and directors of the defendant, showing them to be well known business or professional men in the city of St. Louis, and giving likewise a list of many of the principal stockholders of the company. These letters were signed: "St. Louis Cash Register Company, per J. G. R. O'Hara, Manager."
Thereafter a contract was prepared by the Warrant Warehouse Company, between Herck, operating under the name and style of "St. Louis Cash Register Distributing Company of Mobile," party of the first part, and defendant, party of the second part, and the Warrant Warehouse Company, party of the third part. This contract was executed by the parties under date of June 27, 1914, and was signed in behalf of defendant in the latter's corporate name by O'Hara as secretary and manager. We are not concerned with the details of this contract, and it is sufficient to say that it made provision regarding the shipment of cash registers by defendant to Herck, the receiving and storing thereof by the Warrant Warehouse Company, and the forwarding thereof on orders of Herck; and provided also that when cash registers amounting to a certain sum in value (or mortgaged notes received in payment for cash registers sold and delivered by Herck, of said amount) had been deposited with the Warrant Warehouse Company, that company would then undertake to negotiate a loan for Herck on additional mortgage notes of the same character, to the extent of $ 3,000, during the sixty days following the execution of the contract, and if collections on said notes were satisfactory then to extend such loans to a total of $ 5,000. During August, September and October, 1913, there was much correspondence between Nesbitt and the defendant, the latter acting almost entirely through O'Hara, its general manager. This correspondence grew out of the fact that it was found that Herck had deposited with the Warrant Warehouse Company notes said to have been fraudulently obtained, upon forged signatures, and upon which he had borrowed money from that company. Herck, it is said, disappeared, leaving much confusion behind him.
After much correspondence with defendant, Nesbitt, on October 21 1914, wrote a letter to defendant enclosing the note in suit, which represented the balance due on account of the loan made by the Warrant Warehouse Company to Herck on the notes aforesaid. Thereafter defendant, through O'Hara, as manager, wrote the Warrant Warehouse Company to the effect that defendant would execute this note if the warehouse company would turn over to defendant for collection the so-called "Herck notes," i. e. the notes which Herck had delivered to the Warrant Warehouse Company purporting to have been executed by purchasers and secured by mortgages upon cash registers, together with certain cash registers remaining in the warehouse of the Warrant Warehouse Company; and that def...
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