R. S. Howard Co. v. International Bank of St. Louis
| Decision Date | 08 January 1918 |
| Citation | 200 S.W. 91,198 Mo.App. 284 |
| Parties | R. S. HOWARD COMPANY, Appellant, v. INTERNATIONAL BANK OF ST. LOUIS, Respondent |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of the City of St. Louis.--Hon. Leo S Rassieur, Judge.
AFFIRMED.
Judgment affirmed.
John A Blevins for appellant.
(1) The check for $ 1398.60, containing the words "to be used in part renewal of note due 6/21," was notice to the bank that said check was not to be used to pay Bollman Bros.' indebtedness to the bank. They were notice to the bank that the check was to be used for a certain purpose only, and that the authority of Bollman Bros. was limited. Johnson v Harrison, 177 Ind. 240; In re Hallet L. R., 13 Chan. Div. 696; Central Nat'l Bank v. Life Ins. Co., 104 U.S. 54; Buckner v. Jones, 1 Mo.App. 538; 1 Randolph on Commercial Paper, sec. 388; Breese v. Crumpton, 121 N.C. 122. (2) The bank took the check with notice that it was the property of plaintiff and was to be used for a certain purpose and could not appropriate the proceeds thereof to its own use. Missouri Pacific Ry. Co. v. Levy, 17 Mo.App. 505; Wolfe v. State, 79 Ala. 201; Morse on Banking, sec. 317; Johnson v. Bank, 56 Mo.App. 263. (3) The defendant took the check, subject to the equities between the plaintiff and Bollman Bros. The words in the check were at least sufficient notice to put the defendant upon inquiry, which would have disclosed all the details with respect to the renewal of said note and the rights of the parties. Bank v. Edwards, 243 Mo. 566; Leonard v. Latimer, 67 Mo.App. 136; Mayer v. Bank, 86 Mo.App. 429; Clifford Banking Co. v. Donovan, 195 Mo. 288.
Collins, Barker & Britton for respondent.
(1) The notation on the face of the check did not destroy its negotiability, was not in restraint of negotiation, and did not constructively charge respondent with notice. Negotiable, Instruments Act of Missouri of 1909, p. 700, sec. 3; Jennings v. Todd, 118 Mo. 303; Stilwell v. Craig, 58 Mo. 24; Siegel v. Chicago Trust & Savings Bank, 131 Ill. 569; Bank of Sherman v. Apperson Co., 4 F. Rep. 25; Duckett et al. v. National Mechanics Bank, Maryland Court of Appeals, 39 L.R.A. 84. (2) The notation on the check shows the transaction out of which the instrument arose and did not destroy its negotiability or put any duty on respondent to inquire concerning the same. Ayers v. The Farmers & Merchants Bank, 79 Mo. 421; Kavanaugh v. Bank, 59 Mo.App. 547; Bank v. Refrigerating Co., 236 Mo. 407. (3) The notation made on the check was for the convenience of the maker to show the nature of the credit and was a direction to the Bollman Brothers showing the manner in which the proceeds should be credited, and did not furnish any notice to respondents. Mayer v. Bank, 86 Mo.App. 422; State National Bank of Springfield v. Dodge, 124 U.S. 333; Duckett et al. v. National Mechanics Bank, supra; First Denton Nat'l Bank v. Kenney, 116 Md. 24; Mercantile Trust Co. v. Donk, 178 S.W. 113, 115. (4) The respondent was a bona fide holder for value of the Howard check. Kavanaugh v. Bank, 50 Mo.App. 547; Ayers v. Farmers & Merchants Bank, 79 Mo. 421; Bank v. Refrigerator Co., 237 Mo. 407. (5) The notation on the face of the check has reference to some future act to be done by the payee as agent for the maker and does not affect the negotiability of the instrument. Siegel v. Chicago Trust & Savings Bank, 131 Ill. 569; Jennings v. Todd, supra. (6) Appellant elected to hold Bollman Brothers Piano Company, thereby waiving its rights, if any to make a claim against respondent on account of the transaction in question. Tierman's Extr. v. Security Bldg. & Loan Ass'n, 152 Mo. 135; Nanson v. Jacob, 93 Mo. 331, 345; Armsby v. Dearborn, 116 Mass. 386.
This is an action to recover, as for money had and received, the proceeds of a check for $ 1398.60, executed by the plaintiff to the order of "Bollman Bros.," and which came into the hands of the defendant bank under circumstances to be stated below. The trial, before the court without a jury, a jury having been waived, resulted in a judgment for defendant, from which plaintiff prosecutes the appeal before us.
The evidence discloses that on February 21, 1913, the Bollman Bros. Piano Company (hereinafter referred to as the Bollman Company), a corporation engaged in business in the city of St. Louis, executed to the plaintiff corporation, a wholesale dealer in New York City, a note for the sum of $ 1656, due June 21, 1913. It appears that these two companies had had business relations for many years prior to the time of the transactions here involved. This note was discounted by plaintiff at a bank in the city of New York, and in due course it was forwarded to a trust company in the city of St. Louis, where, on and prior to June 16, 1913, it was held for collection. On June 14, 1913, plaintiff mailed to the Bollman Company its check for $ 1398.60, being the check in controversy, upon the agreement or understanding between the two companies that the Bollman Company would take up the note held at the trust company, utilizing therefor the proceeds of the check and further funds of its own, and execute another note to plaintiff for $ 1400. This check was in the following form:
"No. 11989. New York City, June 14, 1913.
THE NEW YORK COUNTY NATIONAL BANK.
Pay to the order of Bollman Bros. ....
To be used in part renewal of note due 6/21.
$ 1398.60.
The Bollman Company was then a depositor in defendant bank; and upon receiving this check that company, on June 16, 1913, indorsed the same and deposited it to the company's account with the bank, the check being a part of a deposit of $ 2163.95 made by the Bollman Company on that day, consisting of $ 100 in cash, twenty-nine small checks and the check in controversy. The evidence shows that defendant credited the Bollman Company with the total amount of this deposit, against which that company was allowed to draw checks; and that thereafter the check in controversy was duly collected by defendant through the usual banking channels. On the day of that deposit checks of the Bollman Company were paid by defendant amounting to $ 156.05 leaving a balance of $ 4758.29 in that company's account at the close of the business day. On the next day, June 17, the Bollman Company deposited $ 436.50, and defendant paid the company's checks aggregating $ 2552, leaving a balance of $ 2642.79 in the account. On June 18, the Bollman Company deposited $ 1968.40, and defendant paid its checks aggregating $ 1345.81, leaving a balance of $ 3265.38 in the account. On June 19, the Bollman Company deposited $ 1500.79, and defendant paid its checks aggregating $ 510, leaving a balance of $ 4256.17. On June 20, no deposit was made by the Bollman Company; on that day defendant charged the account with certain checks drawn by the Bollman Company and paid by defendant, and also with the amount of two notes of $ 1500 each, being notes which defendant had previously discounted for the Bollman Company and which had been forwarded to Chicago, Illinois, but which had been dishonored and returned to defendant. On that evening the balance in this account was $ 126.33. Shortly thereafter the account was transferred to another bank. The Bollman Company did not carry out its agreement or understanding with plaintiff in regard to effectuating a renewal of the note of $ 1656, due June 21, 1913, and plaintiff was required to take it up from the bank at which plaintiff had discounted it. Soon thereafter the Bollman Company became a bankrupt.
There is testimony for plaintiff to the effect that subsequent to the transaction to which we have referred above, the president of the defendant bank, in conversation with plaintiff's counsel, admitted that defendant collected the check in controversy and applied the proceeds thereof to the payment of a debt due defendant from the Bollman Company. Further testimony of the witness, however, shows that in this conversation plaintiff's counsel was told that the check came into defendant's hands by being deposited in the Bollman Company's account.
The court, having refused certain declarations of law offered by plaintiff, gave six declarations offered by defendant. The first of these is a peremptory declaration that under the law and the evidence plaintiff cannot recover. We may say that other declarations of law given indicate that the court proceeded upon the theory that the notation upon the check, viz. "To be used in part renewal of note due 6/21," did not destroy the negotiability of the instrument, "or put any duty upon defendant to inquire concerning the same;" and that defendant became a bona-fide holder of the check for value.
The sixth declaration of law is as follows: "The court declares the law to be that if plaintiff proved up a claim against the bankrupt estate of Bollman Brothers Piano Company, covering the amount here claimed, then plaintiff cannot recover."
We think it obvious that the sixth declaration of law, supra was unwarranted under the facts of the case, as learned counsel for plaintiff, appellant here, contends. It appears that plaintiff did file a claim against the estate of the Bollman Company in bankruptcy based upon the original note, which, as said, was not taken up by that company as contemplated; but it does not appear that plaintiff ever filed a claim against the bankrupt estate covering the item evidenced by this check. Obviously the argument advanced and the authorities cited by learned counsel for respondent in this connection are here without application. Since the original note was...
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