Owens v. Wood

• Decision Date: 27 September 1966
• Docket Number: 7 Div. 836
• Citation: 43 Ala.App. 366,190 So.2d 734
• Parties: Albert R. OWENS v. Charles WOOD.
• Court: Alabama Court of Appeals

Page 734

190 So.2d 734

43 Ala.App. 366

Albert R. OWENS v. Charles WOOD.

7 Div. 836.

Court of Appeals of Alabama.

Sept. 27, 1966.

Rowan Bone, Gadsden, for appellant.

L. D. Martin, Gadsden, for appellee.

CATES, Judge.

This appeal was submitted on written argument May 5, 1966.

Wood, in an action against Owens as the purported payee of two checks, recovered judgment for $438.43 based on verdict.

The principal question on appeal is whether or not one Jack Mays had authority to negotiate the checks.

I.

Mays came into Wood's Grocery in South Gadsden on September 15, 1959. He presented a check of even date drawn by Mrs. John R. Draper to the order of Dixie Floor Sales Company on The First National Bank of Gadsden. The amount was $58.40.

The reverse bears the following:

'Dixie Floor Sales Co.

1407 So. 11th St.

Gadsden, Alabama ¹

Jack Mays

Charles Wood.'

At least seventy-four days later (November 28, 1959), Mays got Wood to cash another check for $273.75. This was payable to the order of Dixie Floor Sales and was issued as a cashier's check of Alabama City Bank of Gadsden.

It was endorsed:

'Dixie Floor Sales

Jack Mays

Wood's Gro.

Frank Hood Jr.'

Then a rubber stamped endorsement:

'Pay to the order of

The American National Bank Gadsden, Ala.

Gadsden Cigar & Candy Co.'

Each check was sued on separately by separate counts in Wood's complaint. Counts One and Two are adapted from Form 4, Code 1940, T. 7, § 223, using allegations of protest after payment.

Mays, the purported agent, had worked for Owens as a soliciting sales agent. In 1959 Mays had given Wood a price quotation in behalf of Dixie Floor Sales for a job at Wood's Dairy Dip.

On October 15, 1959, Wood paid Mays $130 for the job. This payment was cash. Mays gave him a receipt on a printed form at the foot of which he wrote 'Jack Mays Dixie Floor Sales.'

Wood testified that he had cashed a number of 'business type checks' made out to 'Dixie Floor Sales.' These were endorsed, 'Dixie Floor Sales by Jack Mays.'

Record page 22 (Wood's cross-examination) reflects, in part:

'Q When the job was satisfactory, you made that payment to Mr. Mays?

'A Yes, sir.

'Q You paid him cash?

'A Yes, sir.

'A And he gave you a receipt right there?

'A Yes, sir.

'Q You never received a bill or anything like that for this job?

'A Well, he just came in the store one day and we just paid him. He didn't--

'Q All right, sir, now, I will ask you whether or not you remember about three months after this work was completed did Rudy Owens contact you about payment for the job?

'A Yes, he did.

'A Three or four months later. Three or four months after you had actually paid it to Jack Mays?

'A I don't think it was quite that long, but sometime after that.

'Q Some several months then?

'A I would say about thirty days.

'Q After you had already paid Mays?

'A Yes, sir.

'Q You were contacted by Rudy Owens?

'A He came to the store personally.

'Q What did he tell you?

'A Something similar, 'I've got a bill here that needs to be paid'. That is when we produced our receipt.

'Q Was that the receipt and bill for the work that had been done for you?

'A Yes, sir.

'Q And at that time you showed him the receipt where you had already paid Jack Mays the money?

'A Yes, sir.

'Q And that receipt that you showed us there, that was thr receipt you yourself showed Mr. Owens at the store and it was made by Jack Mays, is that right?

'MR. MARTIN: We object. It speaks for itself.

'MR. SMITH: Where is it then?

'Q The form here, Mr. Wood, that is what I am trying to get at. Is this the form you yourself keep in your own store? This was presented to you by Mr. Mays and he filed it out for you?

'A Yes, I believe that is.

'Q This is one of your own receipt blanks and receipt by him?

'A He wanted to mark it paid with a receipt.

'Q That is not the receipt then that was furnished by Mays?

'A I never have seen any of Dixie Floor Sales' receipts. I don't know.

'Q It was sometime after you had received that receipt that you had a conversation with Mr. Owens about why you hadn't paid your bill?

'A Yes, sir.'

On cross Wood stated he had no recollection of cashing any 'pay checks' made payable to Mays from Dixie Floor Sales.

However, he, 'within a six months period or whenever it might have been,' had cashed some ten checks made payable to Dixie Floor Sales. Wood was unable to remember by whom any of the ten checks had been made. Part of his cross-examination elicited:

'Q What did this Jack Mays tell you his position was with this Dixie Floor Sales? Did he ever tell you actually what his title was?

'A I believe he told us that he was--It's been a long time. It seems like he told us, the way I remember it, he said that he was a manager, kind of looking after the shop while the boss was out and such as that.'

Wood alone testified in his behalf. No evidence was adduced in support of the averments in both counts of the complaint as to protest other than oral to Owens.

Owens testified that Mays had worked for him from a time some eight months before the checks in suit were passed.

Mays's 'duties were straightening up in the morning and going out and making estimates to customers for sales.' He was paid a base salary of $50.00 (a week?) plus commission.' He also authorized Mays to make bank deposits for him, but 'only when given to him to carry specifically to the bank for an errand.'

Owens denied that he had ever authorized Mays 'to go cash a check.' He first learned of Mays's intercepting payments in April, 1960.

At that time Mr. Owens's bank looked at his passbook and advised him that some of the deposit entries bore forged signatures purporting to be those of the receiving tellers.

II.

Appellant's argument is headed 'Assignment of Error 8,' i.e., the court below erred in overruling appellant's motion for a new trial.

This scattergun pleading thus picks up seven grounds derivatively.

The gist of the appellant's argument is that the verdict was contrary to the great weight of the evidence since there was no authority, actual or apparent, shown by the evidence of Mays's being an agent for Owens whose duties would embrace cashing checks for Owens.

Section 19 of the Uniform Negotiable Instruments Law provides:

'The signature of any party may be made by a duly authorized agent. No particular form of appointment is necessary for this purpose; and the authority of the agent may be established as in other cases of agency.'--Code 1940, T. 39, § 23.

January 1, 1967, this will be § 3--403, Uniform Commercial Code, Michie's Code, T. 7A, § 3--403.

To sign for another may be by (a) express words, e.g., a lettr, power of attorney or parole; (b) by implication of law; or (c) inference from fact.

Approaching this case from the burden of proof, we note, First, that Wood must prove that Mays was authorized to sign Owens's name to the two checks. For simplification, we treat Owens as being the alter ego of 'dixie Floor Sales.'

Presumptively, without a designation such as 'Dixie Floor Sales by Jack Mays as its agent' makes Mays a guarantor of prior endorsements. Code 1940, T. 39, § 24.

Hence, Wood faced as one alternative the onus of showing that Code 1940, T. 39, § 27, ² was not operative. This because of Mays's failure to designate himself as agent (without proof of Owens's actual signature) raised a rebuttable presumption of forgery of Owens's endorsement.

The other alternative--the need to prove a positive--was for Wood to establish that Owens had given Mays authority to act.

We lay to one side, except as a landmark between Scylla and Charybdis, the 'per pro.' or 'per proc.' endorsement customary in English practice. Our Negotiable Instruments Law carries this provision--Code 1940, T. 39, § 25, which reads:

' § 25. A signature by 'procuration' operates as notice that the agent has but limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority.'

Unlike § 3--403 of the new Uniform Commercial Code, our Negotiable Instruments Law puts a prima facie gloss of regularity on the position of a 'holder' of unmatured paper. Code 1940, T. 39, § 61 (until January 1, 1967), provides:

' § 61. Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as a holder in due course. But the last memtioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title.'

Section 90, as to notice of dishonor, provides:

' § 90. Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged.'

A check which has circulated among various persons should be presented to the bank 'within a reasonable time ³ after the last negotiation thereof.' Code 1940, T. 39, § 73; N.I.L. § 71; U.C.C. § 3--503(2) (seven days after indorsement).

In O'Neal v. Clark, 229 Ala. 127, 155 So. 562, 94 A.L.R. 589, it was held that if paper is payable at a bank, the notice of dishonor must show that 'it was at the bank at maturity.' The cause was remanded.

On the second appeal Clark v. O'Neal, 231 Ala. 577, 165 So. 853, on rehearing, the Supreme Court's language is emphatic:

'* * * The contract of indorsement requires, as the sine qua non of liability, in the absence of a waiver, Presentment of the instrument for payment at the proper time and place, and notice of dishonor. * * *'-- citing § 90, T. 39.

III.

A party who claims that the relationship of principal and agent exists, has the burden of proving the agency. Capital Security Co. v. Owen, 196 Ala. 385, 72 So. 8.

Two modes of fastening ostensible authority are usual:

1) One...