Perry v. Oerman & Blaebaum
| Decision Date | 18 February 1908 |
| Citation | 60 S.E. 604,63 W.Va. 566 |
| Parties | PERRY v. OERMAN & BLAEBAUM. |
| Court | West Virginia Supreme Court |
Submitted January 16, 1908.
Syllabus by the Court.
The doctrine that an agent disposing of the property of his principal, without authority, transfers no title as against the principal, does not apply to currency, or negotiable instruments without restrictive indorsement, where they have come into the hands of a bona fide purchaser for value without notice.
To make one liable by reason of participation in misuse of money of the principal by an agent, upon the ground that it was used to pay the private debt of the agent, it is necessary to show, not only that the party sought to be charged was aware that the money belonged to the principal, but also that he was aware that the debt paid by it was in fact a private debt of the agent, or such a debt that payment thereof could not lawfully be made out of such money.
It must be shown that he knowingly partakes in the breach of trust to charge a third person as a party to misappropriation of a trust fund.
Appeal from Circuit Court, Greenbrier County.
Bill by Solomon F. Perry against Oerman & Blaebaum. Decree for plaintiff, and defendants appeal. Modified and affirmed.
Henry Gilmer, for appellants.
McWhorter & McWhorter, for appellee.
Eliminating all matters not relating to the single point at issue upon this appeal, the case is this: Solomon F. Perry had logging contract with Oerman & Blaebaum, of York, Pa., relating to their timber which was being cut on Robins run, in Greenbrier county. Barnes was their agent, or manager, on the ground. Ten miles away, at Wade's Draft, Barnes was operating a mill in other timber, as Perry, at the time, believed for this same York firm, but, as it turns out in evidence, for himself, under name of Barnes Lumber Company. Perry had contract for logging there also. The firm sent check for $300 to Barnes, dated July 13, 1905, payable to Barnes Lumber Company. Of the amount so received Barnes paid Perry $150 by check of Greenbrier Pole Company. This payment was applied by Perry on the Wade's Draft contract, by express understanding with Barnes, as he insists. Barnes says that there was no direction concerning its application. After Barnes had become financially involved and left, owing his principals on account of his agency at Robins run, and Perry on account of the Wade's Draft contract, and Perry had gone on and satisfactorily completed the contract at Robins run, the parties were unable to agree upon settlement as to the latter contract, because Oerman & Blaebaum insisted that the $150 be thereon applied. Thereupon this suit, attachment in equity, was instituted against them by Perry; and upon answer, general replication, and proof taken, there was hearing, which resulted in decree allowing such payment to be credited to Oerman & Blaebaum on the Robins run contract. Complaining of this allowance of credit and the change of its original application by the parties, the plaintiff has appealed. Other matters are involved in the suit, but only as to the aforesaid item is our consideration demanded. The decree is for $147.22, with interest from December 15, 1905, in favor of plaintiff against said defendant firm; but plaintiff insists that it is erroneous in not being in a sum larger by said $150.
This case turns upon the question of fact whether Barnes committed a breach of trust in applying the money to his own debt, and if he did, whether Perry was a party to that breach of trust. On behalf of Oerman & Blaebaum it is contended that their agent misappropriated the $150 so received, applied it to his private debt to Perry, and that therefore Perry is chargeable with the sum on what is due him from them on the Robins run contract. This view was accepted by the court below, but careful consideration of the evidence leads us to conclude that the credit was improperly applied in the decree. While argument is made upon the fact that Barnes was the son-in-law of Perry, yet we observe nothing in proof that causes this relationship to be of weight. It does not appear as intimate as the relationship between Barnes and Oerman & Blaebaum, still existing when Barnes' deposition was taken in their city of York, on their behalf. The fact stands out clearly that Perry cannot be charged with knowledge that Barnes, at the time of the payment aforesaid, was misappropriating money of his principals by such payment. Nor is it shown that there was such misappropriation. In fact the opposite is to be inferred. Perry says that Barnes told him that he had received the check from the firm to pay up expenses on the Wade's Draft job, that h...
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