The Hope Vacuum Cleaner Company v. The Commercial National Bank of Independence

• Decision Date: 10 November 1917
• Docket Number: 21,028
• Citation: The Hope Vacuum Cleaner Company v. The Commercial National Bank of Independence, 168 P. 870, 101 Kan. 726 (Kan. 1917)
• Parties: THE HOPE VACUUM CLEANER COMPANY, Appellant, v. THE COMMERCIAL NATIONAL BANK OF INDEPENDENCE, Appellee
• Court: Kansas Supreme Court

168 P. 870

101 Kan. 726

THE HOPE VACUUM CLEANER COMPANY, Appellant, v. THE COMMERCIAL NATIONAL BANK OF INDEPENDENCE, Appellee

No. 21,028

Supreme Court of Kansas

November 10, 1917

Decided July, 1917.

Appeal from Montgomery district court; THOMAS J. FLANNELLY, judge.

Judgment reversed and cause remanded.

SYLLABUS

SYLLABUS BY THE COURT.

1.CHECK--Forged Indorsement by Agent--Liability of Bank.The plaintiff's agent having in his possession a check payable to the order of the plaintiff, indorsed the plaintiff's name on the back of the check without authority, presented the check to the defendant bank, and was given credit for it on his account.The defendant collected the check of the bank on which it was drawn.The agent subsequently exhausted his deposit with the defendant and did not account to the plaintiff for the check.Held, the defendant is liable to the plaintiff for the proceeds of the check.

2.SAME--Evidence--Good against Demurrer.The evidence including the facts stated, examined, and held to be sufficient in other respects to warrant recovery by the plaintiff.

W. N. Banks, John Bertenshaw, both of Independence, Edgar C. Ellis, Hale H. Cook, and Raymond G. Barnett, all of Kansas City, Mo., for the appellant.

T. H. Stanford, of Independence, and G. T. Stanford, of New York, N. Y., for the appellee.

OPINION

BURCH, J.:

The action was one to recover the proceeds of a check collected by the defendant, drawn to plaintiff's order and indorsed to the defendant by an agent of the plaintiff who had no authority to make the indorsement.A demurrer was sustained to the plaintiff's evidence and it appeals.

The plaintiff is a corporation of the state of Missouri, and previous to the transaction out of which the litigation arose was engaged in manufacturing and selling vacuum cleaners.Matt Berryhill was employed to sell and install the plaintiff's product.He sold a vacuum cleaner to Mark D. Mitchell and installed the machine in Mitchell's building.The contract of sale was made in the name of the plaintiff, and Mitchell drew his check on the Citizens National Bank of Independence, payable to the order of the plaintiff, for the contract price of the machine.Berryhill indorsed the plaintiff's name on the check, without authority, and took credit for it in the defendant bank.The defendant collected the check and subsequently paid the proceeds to Berryhill on his checks.

The principal defense to the action was that, conceding the facts stated to be true, the defendant rested under no liability to the plaintiff.The weight of authority is to the contrary.(15 L.R.A. N.S. 519, note.)The check was the property of the plaintiff.If the check had reached the plaintiff it would have brought to the plaintiff's treasury, in due course of business, the sum of $ 399.By means of the forged indorsement the defendant was enabled to intercept the check, collect it, and so divert to its own use funds to which the plaintiff was entitled.

The plaintiff endeavors to justify the action of the district court in sustaining the demurrer on other grounds.It is said that Berryhill and the plaintiff were partners.The evidence was that the price of machines to purchasers was $ 300 plus cost of installation, in this instance $ 399.Machines were expected to net the plaintiff $ 250, that is, the agent was to receive a commission of $ 50 on each machine sold, but the difference between $ 300 and $ 250 did not belong to the agent.The full price of all machines, including cost of installation, was to be remitted to the plaintiff.The result is, the relation of the plaintiff to Berryhill was...