Shelby v. Slepekis, WD34713

• Decision Date: 02 January 1985
• Docket Number: No. WD34713,WD34713
• Citation: Shelby v. Slepekis, 687 S.W.2d 231 (Mo. App. 1985)
• Parties: Marvin L. SHELBY, Plaintiff/Respondent, v. John Joseph SLEPEKIS, Defendant, and Commerce Bank of Blue Hills, N.A., Defendant/Appellant.
• Court: Missouri Court of Appeals

Page 231

687 S.W.2d 231

Marvin L. SHELBY, Plaintiff/Respondent, v.John Joseph SLEPEKIS, Defendant and Commerce Bank of Blue Hills, N.A., Defendant/Appellant.

No. WD34713.

Missouri Court of Appeals Western District.

Jan. 2, 1985.

Rehearing Denied March 5, 1985.

James Borthwick, Benjamin F. Mann, Blackwell, Sanders, Matheny, Weary & Lombardi, Kansas City, for defendant/appellant.

Michael L. Gatrost, Bernard, Gatrost, Rice & Dicavalcante, Kansas City, for plaintiff/respondent.

Before KENNEDY, P.J., and DIXON and CLARK, JJ.

CLARK, Judge.

Commerce Bank of Blue Hills, one of three defendants in this case, has appealed from the judgment entered by the court after a bench trial.Appellant contends the judgment is erroneous as a matter of law and should be reversed outright.We agree, but because the judgment did not dispose of all issues and all parties, it is not a final judgment and the appeal must be dismissed.

The evidence presented no material fact issues, the question for decision in the claim against appellant being whether it was liable to plaintiff because a fraud was perpetrated on plaintiff by a vice-president of the bank.More particularly, the question was whether a relation of principal and agent between the bank and the vice-president was proved as the essential basis for plaintiff's recovery against the bank.

Plaintiff below, Marvin Shelby, was a business owner and a long time customer of the bank.Since 1975, Shelby had dealt with the bank exclusively through John Slepekis, a vice-president and a defendant in the case.Slepekis also acted as a financial advisor to Shelby and was consulted by Shelby regarding an opportunity to purchase a business property in August, 1979.Slepekis undertook to act for Shelby in negotiations with the seller of the property and also handled Shelby's application for a loan from the bank in the amount of $30,000 to be used as a down payment on the purchase.

Shelby's loan was approved and arranged by Slepekis acting for the bank and the funds were available conditioned on the conclusion of negotiations for the real estate purchase.That transaction, however, was never completed.In January, 1980 Slepekis reported to Shelby that the deal had fallen through and the property had been sold to someone else.

At this point, the events which generated this suit and which were alleged to constitute the fraud practiced on Shelby occurred.Slepekis informed Shelby that despite the failure of the intended real estate purchase, Shelby could still have the loan money to use for some other purpose.Shelby responded that he had no need of the funds, particularly as he was already indebted to the bank on other loans.Slepekis then proposed that if Shelby did not need the money, he, Slepekis, did because he wanted to finance a personal business venture of his own.Slepekis suggested that Shelby take the money and then loan it to him on the understanding that Slepekis would repay Shelby in 90 days and Shelby could then repay the bank.Shelby agreed.

Apparently anticipating this turn of events, Slepekis had issued the bank's cashier's check for $30,000 made payable to Mid-Continent Bank where Slepekis had an account in the name of "Friday's Disco" a business entity which operated a tavern.Slepekis was one of the authorized signatories on that account.Slepekis presented Shelby a bank note form to sign for the $30,000 loan.Shelby signed the note but received no money either from the bank or from Slepekis.The form of the cashier's check made it unnecessary for Shelby to endorse the check.Slepekis promptly deposited the check in the "Friday's Disco" account and drew on that account to pay one Nelson for the purchase of the business.¹

At the time Slepekis arranged the $30,000 loan through Shelby, he told Shelby that he did not want anyone at the bank to know about the loan or that Slepekis had actually received the money himself.As Shelby said he understood the need for secrecy at the time, it was because the bank did not want Slepekis engaging in business other than his work for the bank.Shelby agreed to keep the arrangement confidential between himself and Slepekis.The loan agreement between Slepekis as borrower and Shelby as lender was entirely oral and Shelby received nothing evidencing Slepekis' debt to him.

No one at the Commerce Bank, other than Slepekis, was aware of the fact that Slepekis had actually received the proceeds of the Shelby loan.The transaction, evidenced only by the cashier's check and Shelby's note, was not entered on the bank's records at the time in accordance with normal procedures.Later, the situation came to the attention of Clark Page, the bank president, another defendant in this case.After questioning Slepekis about his dealings with bank funds, Page requested Slepekis' resignation.Slepekis left the bank for other employment February 12, 1980.

The bank remained unaware of the loan by Shelby to Slepekis and eventually called upon Shelby for payment of his note.Shelby in turn requested of Slepekis that he pay Shelby as he had promised but Slepekis was unable or unwilling to comply.Shelby then obtained funds through a loan obtained elsewhere and paid Commerce Bank the balance due on the obligation.

Plaintiff's case against Slepekis was based on the contention that Slepekis had perpetrated a fraud in procuring the loan in that he had no intention of ever repaying plaintiff the sum borrowed.As to Commerce Bank, plaintiff claimed it was jointly liable for the fraud because Slepekis acted in the transaction as agent for the bank.As plaintiff's petition alleged: "That in all events and things herein alleged, DefendantJohn Joseph Slepekis was acting in and on behalf of Defendant Commerce Bank of Blue Hills within the scope of his agency, employment, service and authority, both express and implied * * *."

Shelby contends the theory of Slepekis' agency is sustainable because the bank caused Slepekis to be placed in a position of authority to make loans and thereby perpetrate the fraud.He also claims that Slepekis had the authority of an implied agent by reason of his activities on behalf of the bank.

The relationship of principal and agent and resultant liability of the principal for the acts of the agent may be created by the express grant of authority by the principal or, absent express agency, the relation may be one of implied or inferred agency or apparent agency.The evidence in this case did not show Slepekis to be the agent of the bank in his transaction with Shelby under any concept of agency.

There was no evidence and Shelby does not contend that Slepekis had any express authority from the bank to arrange loans to bank customers with the object of procuring loan funds for himself.The scheme was entirely for Slepekis' own benefit and was conducted with the objective of concealing the transaction from the bank.The facts immediately preclude any claim of express agency.

Implied or inferred agency is that relationship which exists by reason of actual authority given implicitly by the principal to the agent and is often inferred from a course of dealing between the alleged principal and his agent.Implied authority depends on the actual relationship between the principal and the agent and not what a third party may have been told or may believe as to that relationship.Agency will not be inferred...