Mayo Bros. Chemical Corporation v. Capital Nat. Bank in Jackson
| Decision Date | 20 December 1941 |
| Docket Number | 34755. |
| Court | Mississippi Supreme Court |
| Parties | MAYO BROS. CHEMICAL CORPORATION v. CAPITAL NAT. BANK IN JACKSON. |
Jacobson Snow & Covington, of Meridian, and Butler & Snow, of Jackson, for appellant.
Flowers Brown & Hester, of Jackson, for appellee.
Appellant sued the appellee on the ground that the latter "negligently and without authority * * * paid the sum of $1,000 in cash", as the proceeds of appellant's check payable to the order of the drawee bank itself, to one Odom, the sales manager for the drawer. From a judgment denying recovery, this appeal is taken.
The appellant corporation was organized August 15, 1937. The following day it opened an account with the appellee bank with a deposit of $5,000. Its offices were in Meridian where Mayo, its president, resided, and its laboratory in Jackson. The bank is situated in the latter city, and one Odom was placed in charge of its business there as sales manager. At the time the bank account was opened, Odom was introduced to the officers of the bank as such sales manager, and the bank was requested "to extend him every favor possible in taking care of the business." The bank was advised as to a resolution of the corporation to the effect that no funds could be withdrawn from the account except upon checks signed by Mayo, as its president, and Odom, as its sales manager. On August 17th Odom withdrew from the account the sum of $500 by a check of the corporation, payable to him. Two other checks similarly drawn for smaller amounts were cashed by Odom prior to the transaction out of which this suit arose. On September 3rd, a check drawn upon and payable to the appellee in the sum of $1,000 was presented to the bank by Odom, who requested and was paid the cash thereon. The proceeds of this check were retained and used by Odom to the appellant's loss. On the day following this transaction, another check for $1,000 was drawn payable to Odom, and it was cashed. Thereafter nine other checks in varying amounts were similarly drawn and cashed by Odom. The business was short lived and the account was closed October 12, 1937.
Testimony for appellant disclosed that Mayo had given instructions to Odom to use the particular check here involved for the purchase of New York exchange. There is no evidence that the bank knew of such instructions, and the bank complied with the request to cash the check. Although we consider such instructions irrelevant to affect any duty of the bank since they were not communicated to it, yet they are competent in resolving the issue as to the apparent authority of Odom in the transaction. Upon this issue the following additional facts are relevant, since the trial court sitting by consent, as trier of the law and facts without a jury, found that the bank was without negligence in following the instructions of Odom to pay the check in cash. Mayo gave two versions regarding his discovery of the conversion of the proceeds by Odom. The first was that he discovered the defalcation three days after it occurred; the second, that it first came to his attention when he procured a duplicate copy of the corporation's monthly statement for the month of September. No complaint was made to the bank until the following April. The appellant owed the bank nothing at the time the check in question was presented, and there was no intimation to the bank as to the purpose for which the check was made to its order except such inferences as could be drawn from its prior dealings with Mayo and Odom, the request for its payment in cash, and the absence of any reasonable ground for inferring that it was to be otherwise handled.
It is the general rule that a drawee bank, at its own risk, pays to a third person the proceeds of a check payable to its own order. 9 C.J.S., Banks & Banking, § 340, p. 683. An agent of the drawer may be such third person if the bank has not been authorized to pay...
To continue reading
Request your trial
-
Martin v. First Nat. Bank in St. Louis
... ... Louis, a Corporation, Appellant No. 40858 Supreme Court of Missouri ... 2 ... C.J.S., Sec. 96, p. 1208; Haubelt Bros. v. Rea & Page ... Mill Co., 77 Mo.App. 672; ... Sup.), 246 S.W. 180, 183; ... Mayo Bros. Chemical Corp. v. Capital Nat. Bank, 192 ... ...
-
Bank of Southern Maryland v. Robertson's Crab House, Inc.
...in cash." 5A Michie, Banks and Banking, supra at 495. See also 10 Am.Jur.2d, Banks, supra at 530; Mayo Bros. Chemical Corp. v. Capital National Bank, 192 Miss. 293, 5 So.2d 220, 222 (1941). Thus, if the drawer clothes an agent with apparent authority to receive the proceeds of a check made ......
-
Master Chemical Corp. v. Inkrott
...Pacific Indemnity Co. v. Security First Natl. Bank (1967), 248 Cal.App.2d 75, 56 Cal.Rptr. 142; Mayo Bros. Chemical Corp. v. Capital Natl. Bank in Jackson (1941), 192 Miss. 293, 5 So.2d 220.3 Alabama, Arizona, Colorado, Hawaii, Idaho, Illinois, Indiana, Louisiana, Maryland, Minnesota, Misso......
-
McSwain v. Griffin, 38886
... ... Barrett Jones, Jackson, for appellee ... KYLE, Justice ... 180, 5 So.2d 218; Lee v. Magnolia Bank, 209 Miss. 804, 48 So.2d 515. In the case of ... In that case the appellant, a corporation, had purchased the land on April 4, 1895, at a ... ...