Roberts Fertilizer, Inc. v. Steinmeier

• Decision Date: 29 March 1988
• Docket Number: No. WD,WD
• Parties: 6 UCC Rep.Serv.2d 797 ROBERTS FERTILIZER, INC., Appellant, v. G. Wayne STEINMEIER, et al., Respondents. 39422.
• Court: Missouri Court of Appeals

Page 883

748 S.W.2d 883

6 UCC Rep.Serv.2d 797

ROBERTS FERTILIZER, INC., Appellant, v. G. Wayne STEINMEIER, et al., Respondents.

No. WD 39422.

Missouri Court of Appeals,

Western District.

March 29, 1988.

George A. Pickett, Frost, Fisher & Pickett, Plattsburg, for appellant.

Kristin L. Farnen, Morrison, Hecker, Curtis, Kuder & Parrish, Kansas City, for respondent, Smithville Citizens Bank and Trust Co.

Before COVINGTON, J., Presiding, and SHANGLER and TURNAGE, JJ.

COVINGTON, Judge.

Roberts Fertilizer, Inc., appeals from an order granting Smithville Citizens Bank and Trust Company's motion for summary judgment in Roberts' action for payment of one or the other of two checks drawn on the Bank in the amount of $70,500.00. Affirmed.

G. Wayne Steinmeier purchased fertilizer on account from appellant Roberts Fertilizer, Inc. On the 20th day of December, 1984, Mr. Steinmeier entered into a separate agreement with Roberts for payment of his overdue account. As part of that agreement, Steinmeier gave to Roberts a check in the amount of seventy thousand five hundred dollars ($70,500.00) drawn on Citizens Bank and Trust Company of Smithville. By the terms of the agreement, Roberts was not to deposit the check before January 20, 1985.

On January 21, 1985, Larry Roberts, president of Roberts, went to the Citizens Bank and Trust Company of Smithville to cash the Steinmeier check. Before taking the Steinmeier check into the Bank, Mr. Roberts telephoned the Bank to ask whether he could cash it. Ms. Virginia Cole, the Bank's vice president and cashier, checked the Steinmeier account upon which the check was drawn and found that it contained approximately $6,000.00.

Ms. Cole, then, by intercom, asked the president of the Bank, Paul Shy, whether she should cash the Steinmeier check. Mr. Shy understood Ms. Cole to say that the amount of the Steinmeier check was $7,000.00 rather than $70,000.00. Based upon the belief that the Steinmeier check was for $7,000.00 and based on the knowledge that Mr. Steinmeier had another account with the Bank containing approximately $13,000.00, Mr. Shy told Ms. Cole to cash the check. Steinmeier's check was taken from Roberts, and the Bank issued a bank disbursement check in the amount of seventy thousand five hundred dollars ($70,500.00). Language on the face of the bank disbursement check stated that the check was "not good for more than $50,000.00." Other wording on the face of the check stated it was a "Disbursement Account (Not a Cashier's Check)."

On January 21, 1985, Steinmeier did not have funds sufficient in any of his accounts with the Bank to cover the $70,500.00 check he had issued to Roberts. Steinmeier's account was never debited for the $70,500.00.

After Mr. Roberts left the Bank with the disbursement check on January 21, Ms. Cole expressed surprise to Mr. Shy that he would authorize overdrawing the Steinmeier account by $64,000. Mr. Shy asked what Ms. Cole meant, and she told him that she had issued a $70,500.00 check. This is the first time Mr. Shy discovered the mistake.

A check drawn on the Bank, when received for payment, is sent through a proof machine which encodes the check and proofs the tape to make sure that it is in balance. The check then goes to a computer center. If the funds in the account are insufficient, the check will "kick out" at the computer center and the center will send it back to the Bank the next day as an unposted item. The Bank receives the printout of all items which have been rejected, and the Bank pulls them. The Steinmeier check was on the unposted list on January 22, 1985, and was pulled. The check had never been marked paid, and the Steinmeier account was never charged.

On the morning of January 22, 1985, Mr. Roberts prepared a deposit to take to Roberts' bank in Gower, Missouri. He noticed that the disbursement check said "Disbursement Account (Not a Cashier's Check)" and that it said "Not Good for More than $50,000.00." He also noted that the check was made payable for $70,500. Mr. Roberts drove to the bank at Gower and asked the president of the Gower Bank what the language on the check meant. The president of the Gower Bank indicated to Roberts that he was uncertain of the meaning of the highly unusual language.

The president of the Gower bank telephoned the Smithville Bank concerning the language on the face of the disbursement check. Ms. Cole at that time told the president of Gower Bank to deposit the disbursement check. Mr. Roberts, however, elected to go to the Smithville Bank to see Mr. Shy. Mr. Roberts requested a cashier's check to replace the bank disbursement check, and Mr. Shy responded that he would not be able to honor the bank disbursement check. Mr. Shy stated that Mr. Steinmeier did not have sufficient funds in his account and explained to Mr. Roberts the mistake that had been made. Mr. Roberts testified that Mr. Shy offered to give Roberts the Steinmeier check in exchange for the bank disbursement check; Roberts, however, "didn't think that it was prudent business on his part."

Mr. Shy and Mr. Roberts discussed alternatives for remedying the situation, one of which was the possibility of the Bank's lending money to Mr. Steinmeier to pay Roberts.

At two o'clock on January 22, 1985, Mr. Roberts talked with Mr. Shy to inquire whether Roberts could get another check. Mr. Shy responded negatively, stating that he and Mr. Steinmeier were unable to reach agreement on loan terms. Mr. Roberts telephoned Steinmeier who confirmed that no loan would be made.

Roberts brought an action in the Circuit Court of Platte County, Missouri, suing Steinmeier and Smithville Citizens Bank and Trust Company in a two-count petition. Count I stated a cause of action solely against Steinmeier and sought recovery of the sum of $70,500. This action was based upon the check which was executed by Steinmeier and made payable to Roberts. Roberts alleged that this check was returned by the Bank for insufficient funds which resulted in the nonpayment by Steinmeier to Roberts of the sums due and owing to Roberts.

Count II of Roberts' petition stated a cause of action against the Bank. Roberts alleged payment of the Steinmeier check by the Bank and alleged additional liability on the bank disbursement check. After responsive pleadings were filed by both Steinmeier and the Bank, both Roberts and the Bank requested summary judgment. The trial court entered summary judgment on Count I for Roberts and against Steinmeier in the amount of $70,500. The trial court entered summary judgment on Count II in favor of the Bank. Neither Roberts nor Steinmeier has appealed the judgment entered by the trial court on Count I. Roberts now appeals the summary judgment entered in favor of the Bank on Count II.

Review of summary judgment is equivalent to review of a court-tried or equity proceeding, and if, as a matter of law, the judgment is sustainable on any theory, the judgment of the trial court must be sustained. Snowden v. Northwest Mo. State Univ., 624 S.W.2d 161, 165 (Mo.App.1981). Review is made of the entire record in a light most favorable to the party against whom summary judgment is entered. Fisher v. Scott & Fetzer Co., 664 S.W.2d 662, 663 (Mo.App.1984). An appellate court will not reverse a correct result even where granted for the wrong reasons, and if defendant's contention is valid, the summary judgment entered by the trial court will be sustained even if the argument was not presented in the trial court. Westbrook v. Mack, 575 S.W.2d 921, 924 (Mo.App.1978). The reviewing court first determines whether there is any genuine issue of material fact requiring trial, and, second, whether the judgment is correct as a matter of law. State v. Board of Election Commissioners, 686 S.W.2d 888, 892 (Mo.App.1985); Rule 74.04(c). The moving party has the burden to show by unassailable proof that he is entitled to judgment as a matter of law. Rule 74.04(c), (h).

Definitions of terms used in the Missouri Uniform Commercial Code, Articles 3 and 4, §§ 400.3-101 to 400.4-504, ¹ are essential to an understanding of the transactions at issue. The Steinmeier check was a "negotiable instrument," defined in § 400.3-104(1), RSMo Supp.1984, as "any writing ... signed by the maker or drawer, [which] contain[s] an unconditional promise or order to pay a sum certain in money ..., payable on demand or at a definite time, ... and payable to order or to bearer." Because it was payable to order, it was a "draft," § 400.3-104(2)(a), RSMo Supp.1984; and, because it was a draft "drawn on a bank and payable on demand," it was a "check," § 400.3-104(2)(b), RSMo Supp.1984. Because checks are "instruments for the payment of money," they are "items," § 400.4-104(1)(g), RSMo Supp.1984.

Steinmeier was the "drawer" of the Steinmeier check. The Bank was the "payor bank" (or "drawee bank") on the Steinmeier check because the check was "payable as drawn" by the bank. § 400.4-105(b). Roberts was the "payee." It was also a "holder" of the Steinmeier check. "Holder" is defined in § 400.1-201(20) as a "person who is in possession of ... an instrument ... drawn, issued or indorsed to him or to his order or to bearer or in blank."

A payee or holder makes "presentment" when he makes "a demand for acceptance or payment ... upon the maker, acceptor, drawee or other payor." § 400.3-504(1). If, upon presentment, "payment is refused or cannot be obtained within the prescribed time," the check is said to have been "dishonored." § 400.3-507(1), RSMo Supp.1984. The "prescribed time" within which a payor bank must either pay or dishonor an item is determined with reference to the Bank's "midnight deadline," defined in § 400.4-104(1)(h), RSMo Supp.1984 as "midnight on its next banking day following the banking day on which it receives the relevant item." A drawee bank may not dishonor a check once it has made "final payment" of the check as defined in § 400.4-213. Until the drawee bank pays or "accepts"...