McClendon v. Bank of Advance

• Citation: 174 S.W. 203,188 Mo.App. 417
• Parties: ELLA McCLENDON et al., Respondents, v. BANK OF ADVANCE, Appellant
• Decision Date: 02 March 1915
• Court: Court of Appeal of Missouri (US)

174 S.W. 203

188 Mo.App. 417

ELLA McCLENDON et al., Respondents, v. BANK OF ADVANCE, Appellant

Court of Appeals of Missouri, St. Louis

March 2, 1915

Appeal from Stoddard Circuit Court.--Hon. W. S. C. Walker, Judge.

REVERSED AND REMANDED.

Judgment reversed and cause remanded.

Wammack & Welborn for appellant; Mozley & Woody of counsel.

(1) A bank cashing a check which has been drawn upon it and which has been raised before presentment for payment to such bank without the knowledge or consent of the drawer can recover from the person to whom payment is made the amount by which said check has been raised. Espy, Heidelback & Co. v First National Bank, 18 Wall. (U.S.) 604; Third National Bank v. Allen, 59 Mo. 311; Bank of Brooklyn v. Westcott, 23 N.E. 900; Bank of N. Y. v. Seaboard Bank, 20 N.E. 632; Rapp v. National Security Bank, 20 A. 508. (2) A bank accepting a check only agrees to pay it according to the order of the drawer and only admits that the signature of the drawer is genuine and that he had capacity and authority to draw the instrument and the existence of the payee and his capacity to endorse. As to all other matters the person endorsing and receiving a check guarantees its genuineness. Sec. 10032, 10102, and 10036, R S. 1909; Rossi v. National Bank of Commerce, 71 Mo.App. 150; Trust Co. v. Bank, 154 Mo.App. 100. (3) Appellant is entitled to make the test of acid for the purpose of demonstrating that the mailing card deposit slip for $ 108.67 had been traced and that figures had been added in a different ink from that with which it was originally written. Holzmer v. Metropolitan St. Ry. Co., 169 S.W. 110; Riggs v. Railroad, 216 Mo. 327; Note to Leonard v. Railroad, 15 L.R.A. 223; National Cash Register Co. v. Dlumenhal, 48 N.W. 622; 17 Cyc. 394; 38 Cyc. 1311; 12 Am. & Eng. Ency. of Law (2 Ed.), 411; Farmers, Etc., Bank v. Young, 36 Iowa 47. (4) The verdict of the jury was the result of passion and prejudice and should not be permitted to stand. Tucker v Railroad, 66 Mo.App. 141; Joy v. Cale, 124 Mo.App. 575; Neal v. Cunningham Store Co., 149 Mo.App. 57; Spiro v. Transit Co., 102 Mo.App. 250; McClanahan v. Railroad, 147 Mo.App. 386. (5) The court erred in directing the jury to disregard all testimony of the existence of Charles Kester and of his not indorsing the $ 150 check. (6) The court erred in admitting testimony which was illegal and tended only to prejudice the minds of the jury and counsel for respondents persisted in asking questions which were irrelevant and asked only for the purpose of getting before the jury immaterial matters and prejudicing the minds of the jury against the appellant. 38 Cyc. 1477; Railroad v. Payne, 133 Ky. 539.

T. D. Hines for respondents.

(1) It is admitted that the two checks alleged to have been forged were deposited by respondents and respondents' checking account credited with same, and account of drawer charged with same, and deposit-ticket delivered to respondents accordingly. This constituted an acceptance by appellant. It was payment, and payment is tantamount to acceptance. Bank of Commerce v. Mechanics' Bank, 148 Mo.App. 16. (2) When the holder of a check procures it to be accepted, the drawer and all indorsers are discharged from liability thereon. R. S. 1909, sec. 10158. The acceptor by accepting the instrument engages that he will pay it according to the tenor of his acceptance, and admits: (a) the existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instrument, and (b) the existence of the payee and his capacity to indorse. R. S. 1909, sec. 10032. (4) The law is well settled that a bank is conclusively presumed and bound to know the signature of its customer--in this case James Kinder & Son--when that signature appears as drawer on a check drawn upon that bank, purporting to be signed by the customer. Bank v. Bank, 148 Mo.App. 16; Trust Co. v. Bank, 154 Mo.App. 100. (5) When the drawee of a check to which the name of the drawer has been forged pays it to a bona-fide holder, he is bound by the act and cannot recover the payment. Having paid or accepted it, he can neither repudiate the acceptance nor recover the money paid. Bank v. Bank, 148 Mo.App. 16-17; Price v. Neal, 3 Burr, 1354; For compilation of cases, see 10 L.R.A. (N. S.) 49. (6) The question of whether respondents were bona-fide holders of the two checks or not was a question of fact which was submitted to the jury upon instructions declaring the law as it is above stated to be. (7) The evidence of witness Jenkins, appellant's cashier, when testifying about the alleged forged and altered checks, using his words, "in ordinary business we just glanced over them," "I saw in a moment when my attention was called to it"--this last statement referring to the James Reagan check alleged to have been raised from $ 14.60 to $ 44.60--shows conclusively that appellant, through its cashier, exercised no care in accepting the alleged raised checks. This cashier convicted appellant of negligence in handling the checks alleged to have been raised. In such cases the negligent party must bear the loss, and not the bona-fide holders. 2 Daniel on Negotiable Instruments (2 Ed.), sec. 1661; Farmers' and Merchants' Bank v. Bank of Rutherford, 88 S.W. 939; Howard v. Mississippi Valley Bank, 26 Am. St. 105; Bank of Commerce v. Mechanics' American Bank, 148 Mo.App. 20. (8) There was no proper foundation laid for the proposed dramatic and spectacular offering of what counsel are pleased to call the "acid test" of respondents certificate of deposit for $ 108.67.

NORTONI, J. Reynolds, P. J., and Allen, J., concur.

OPINION

NORTONI, J.

--This is a suit for a balance of deposits made by plaintiffs with defendant bank. Plaintiffs recovered and defendant prosecutes the appeal.

Plaintiffs, Ella McClendon and William McClendon, are copartners and as such conduct a mercantile business or store, under the firm name of Ella McClendon & Company at Sturdivant, while defendant is an incorporated banking institution, doing business in Advance, a place not far distant from Sturdivant.

The suit involves one item of $ 108.67, said to have been deposited by plaintiffs with defendant on August 3, 1910, and for which it is asserted defendant gave plaintiffs credit on the books of $ 8.67 only, and the amount in dispute with respect to this is $ 100. This matter may be put aside for the present, in the view we take of the case, because other items of deposit which are said to involve certain altered or raised checks and two forged checks are for immediate consideration, in view of the fact that the court obviously misdirected the jury with respect to the law of the case touching raised checks and treated them all under the rule pertaining to forgeries of the signature of the drawer.

The facts relevant to the matter for present consideration are substantially as follows:

Plaintiffs conducted a store at Sturdivant and maintained a checking account with defendant bank at Advance, with which they made frequent deposits; while James Kinder & Son, copartners, conducted a sawmill near by at Eaglett. James Kinder & Son also maintained a checking account with defendant bank, made deposits therein, and drew checks thereon. In conducting the sawmill business, James Kinder & Son paid their workmen by issuing checks to them on defendant bank, and such checks were usually presented to plaintiffs, Ella McClendon & Company, at their store at Sturdivant and cashed by them. After having cashed the checks, it appears plaintiffs forwarded them by mail to defendant bank for deposit. Upon receipt of the checks thus forwarded by plaintiffs, the bank would deposit them to the credit of plaintiffs, Ella McClendon & Company, and charge the account of James Kinder & Son with the amount so credited.

During the summer of 1910, James Kinder & Son were informed by the bank that their account was overdrawn and went about investigating the matter, for it is said there should have been a balance to their credit at that time. The investigation revealed that some checks issued by James Kinder & Son to as many different men in their employ had been altered or raised in amount, after issue, and were cashed by plaintiffs at their store and deposited in defendant bank by plaintiffs, for which they received credit. Moreover, two checks appeared to have been forged--that is, the signature of James Kinder & Son forged thereto--and those checks were likewise cashed by plaintiffs at their store and forwarded to the bank and deposited to their account. All of those checks, either raised or forged, were charged at the time, for the amounts appearing on their face, to the account of James Kinder & Son in the bank.

The several altered checks--that is, checks raised in amount--were as follows: James Kinder & Son had issued a check in favor of James Reagan for $ 14.60 and this check was raised in amount so as to appear to be for $ 44.60, and being so raised, was deposited by plaintiffs in defendant bank to their account. James Kinder & Son had issued one check in favor of Bill Reagan for $ 3.78 and this check was raised in amount, so as to appear to be a check for $ 30.78, and after being so raised, was deposited by plaintiffs in defendant's bank, for which they had been given credit. James Kinder & Son had issued one check to James Davis for $ 16.04 and this check was raised in amount, so as to appear to be a check for $ 66.04, and after being so raised, was deposited by plaintiffs in defendant bank, for which they were given credit. James Kinder & Son had issued one check to Albert Davis for $ 17.74 and this check was altered and raised in amount, so as to appear to be a check for $ 70.74 and after being so raised, was deposited by plain...