Railway Express Agency v. Luverne Bank & Trust Co.

• Decision Date: 08 April 1941
• Docket Number: 4 Div. 594.
• Citation: 2 So.2d 787,30 Ala.App. 172
• Court: Alabama Court of Appeals
• Parties: RAILWAY EXPRESS AGENCY, Inc., v. LUVERNE BANK & TRUST CO.

2 So.2d 787

30 Ala.App. 172

RAILWAY EXPRESS AGENCY, Inc., v. LUVERNE BANK & TRUST CO.

4 Div. 594.

Alabama Court of Appeals

April 8, 1941

Rehearing Denied May 13, 1941.

Appeal from Circuit Court, Crenshaw County; A. E. Gamble Judge.

Certiorari denied by Supreme Court in Railway Express Agency, Inc. v Luverne Bank & Trust Co., 4 Div. 215, 2 So.2d 790.

Thompson & Little and Sentell & Sentell, all of Luverne, for appellant.

C J. Kettler, of Luverne, and Powell & Hamilton, of Greenville, for appellee.

SIMPSON, Judge.

This was a suit on the common counts, plaintiff recovering judgment against defendant for the sum claimed in the complaint. Defendant appeals.

The sole insistence of error is the refusal of the trial court to give for defendant (appellant here) the general affirmative charge. Basis of the suit was:

One C L. Russell was the local agent of appellant at Luverne, Alabama, working on commissions, and, according to appellant's answers to interrogatories, authorized to accept legal tender only in payment for express charges, etc.

On September 1, 1936, one Rabun, auditor and route agent for appellant, having general authority and supervision over the district in which the Luverne office was located, made an audit of the local office account and found a shortage of $634.47 due appellant by the local agent, Russell. Upon the shortage being mentioned, to Russell, he offered Rabun two checks drawn on out of town banks, aggregating slightly more than the shortage, to settle his account. The checks, dated August 31, 1936, were payable to the order of "C. L. Russell, Agent, REA Inc.", and purported to bear the signature of Harry Stephens. Upon being thus presented with the checks, Rabun explained that credit could not be allowed for them because it was contrary to company rules, cash only being acceptable. In reply, Russell stated that the checks "were good as gold and he would get the cash on them." Whereupon, Rabun replied that "cash was the only thing he could give him credit for on his books." Russell then went to the appellee bank with the checks to get them cashed. Rabun was along, standing behind Russell at the teller's window, as was also a stranger, probably a Mr. Kirkland, "Auditor of the A. C. L. Railway", who came with Rabun to the Luverne office on that day. Then and there, when thus in the presence of the other two and the teller, Russell indorsed the two checks "C. L. Russell Agt. Railway Express Agency" and the teller delivered to him the cash represented by the checks. The three then left the bank and, after returning to the express office, Rabun directed that the money be transmitted to the treasurer of appellant in Atlanta, which was accordingly done.

It later developed that the checks were not genuine or were forgeries and were returned to appellee bank by the drawee bank, dishonored. The fact that the checks were forgeries or not genuine was unknown to appellee. Appellee sued appellant for the money.

Russell, Rabun and Stephens were dead when the case was tried. The foregoing evidence was presented by appellee (plaintiff below), at the conclusion of which appellant also rested and requested the general affirmative charge. The charge was refused, the case submitted to the jury, resulting in the judgment aforesaid. Hence this appeal and the point of error insisted upon.

By forceful argument of counsel for appellant, it is urged that we declare a reversal of the case under the well-recognized doctrine that title to money obtained by theft or fraud passes by mere delivery, when received by an innocent taker, in good faith and for value. There is no doubt of the correctness of this principle of law. Michie on Banks and Banking, Vol. 5, Chap. 9, Sec. 265, p. 485; 21 R.C.L., Sec. 41, p. 44; Batson v. Alexander City Bank, 179 Ala. 490, 60 So. 313.

But in our view the appellant here is not protected by the foregoing doctrine. For under the facts and circumstances of the present case, and inferences reasonably deducible therefrom, the appellant cannot be considered, as a matter of law, an innocent creditor within the meaning of the announced principle. The familiar rule of law that the principal is bound by the acts of his duly authorized agent or one acting within his ostensible authority has application here. To say the least, the issue was doubtful and determination thereof was properly for the jury.

Here we have more than the fraudulent procurement and transfer of the money to an innocent creditor by some third person. Here Russell, known by the bank teller to be the...