New York Indem. Co. v. Andrew County Bank

• Decision Date: 03 April 1933
• Parties: NEW YORK INDEMNITY CO., APPELLANT, v. ANDREW COUNTY BANK, RESPONDENT
• Court: Kansas Court of Appeals

59 S.W.2d 741

227 Mo.App. 878

NEW YORK INDEMNITY CO., APPELLANT, v. ANDREW COUNTY BANK, RESPONDENT

Court of Appeals of Missouri, Kansas City

April 3, 1933

Appeal from Circuit Court of Andrew County.--Hon. Edward G. Robison Judge.

AFFIRMED.

Judgment affirmed.

Culver & Phillip for appellant.

Booher & Wolverton for respondent.

OPINION

BLAND J.

--This is a proceeding against the defendant, bank, in liquidation, in which plaintiff, as assignee of the Union Credit Corporation, seeks to have the amounts of five checks, drawn upon the defendant, declared preferential claims. The court refused the relief prayed for and plaintiff has appealed.

The facts show that the checks in question were drawn by the Noland Motor Company upon defendant while it was a going concern. They were made payable to the Union Credit Corporation and delivered by the drawer to one Pickard, employed by the Union Credit Corporation as a collector and adjuster.

The first of these checks was in the sum of $ 300 and was dated March 30, 1929. It was cashed by Pickard on April 1st of that year. The second check was in the sum of $ 225 and was dated May 2, 1929. It was cashed by Pickard on May 3rd. The third check was in the sum of $ 370 and was dated June 11, 1929. It was cashed by Pickard one June 17th. The fourth check was in the sum of $ 364 and was dated September 21, 1929. It was cashed by Pickard on September 25th. The last check was in the sum of $ 555.50 and was dated September 23, 1929. It was cashed by Pickard on September 28th. All of these checks were cashed personally by Pickard at the bank while it was a going concern.

The facts further show that the Union Credit Corporation is a finance corporation, located in St. Joseph, and that the Noland Motor Company and the defendant were located at Savannah; that the Union Credit Corporation was engaged in the business of financing retail dealers in automobiles, including one Charley Noland, doing business as the Noland Motor Company, at Savannah. Those dealers, including Noland, who were without sufficient capital to keep a proper stock of cars on hand would apply to the Union Credit Corporation for loans and it would loan upon each car an amount equal to about eighty per cent upon "ninety day acceptances," of its cost at the factory, under an arrangement that the car should remain upon the dealer's floor. This is called financing on the "floor plan." It was the practice of the company to send a man around to the dealers semimonthly to ascertain if the cars upon which it had loans were upon the dealers' floors. In the meantime, if the dealer had made a sale or sales, he would immediately turn over to the Union Credit Corporation the cash he received and if the car was sold upon the time payment plan the installment note and chattel mortgage arising out of the sale would be turned over to it.

Pickard was employed by the Union Credit Corporation to check up the dealers to see if the cars were on the floors and to make collections from such dealers and, also, to collect payments on installment notes from the purchases of cars from the dealers. His company instructed him to collect money and checks and to turn the cash over to it "and once in awhile when he would collect a sizeable check his instructions were, if there was any question about the financial responsibility of the dealer, to secure a bank draft from the bank upon which the check was drawn, made payable to the company and forward the draft to it." In reference to the indorsement of checks made payable to the Union Credit Corporation, he was instructed to proceed to the bank on which they were drawn, indorse the check "Union Credit Corporation," secure a draft or drafts from such bank made payable to the former and turn the draft or drafts over to it.

Pickard had been employed as aforesaid "for quite an extended period" when he defaulted and absconded with approximately $ 4700 of the money of the Union Credit Corporation, including the proceeds of the five checks in controversy in this proceeding. It would appear that plaintiff was Pickard's bondsman and, having made Pickard's defalcations good to the Union Credit Corporation, took an assignment of its claim against the bank.

When Pickard received the checks from the Noland Motor Company he proceeded to the bank and indorsed them in the name of the Union Credit Corporation, but instead of procuring drafts for them or their proceeds in favor of his employer, he procured the cash and did not turn the same over to it. Relative to the cashing of these checks by the bank, the cashier of the bank testified that Pickard was brought to the bank by Noland, who introduced him as the representative and collector of the Union Credit Corporation, with authority from it to receive cash upon checks drawn by Noland in favor of that company. Noland told the cashier that Pickard had been "instructed to get the cash." The checks in controversy were not the only ones made by Noland to the Union Credit Corporation. About eighty per cent of the total number made to that company were delivered by Noland to Pickard.

The decision in this case turns upon the question of the authority of Pickard to indorse the checks in question in the name of the Union Credit Corporation and receive the cash thereon from the defendant bank. His express authority was to indorse...