Union Biscuit Co. v. Springfield Grocer Co.

• Decision Date: 04 April 1910
• Citation: 126 S.W. 996,143 Mo. App. 300
• Parties: UNION BISCUIT CO. v. SPRINGFIELD GROCER CO.
• Court: Missouri Court of Appeals

126 S.W. 996

143 Mo. App. 300

UNION BISCUIT CO. v. SPRINGFIELD GROCER CO.

Springfield Court of Appeals. Missouri.

April 4, 1910.

1. PAYMENT (§ 65) — BURDEN OF PROOF.

Defendant in an action on an account, who pleads payment, has the burden of proof.

2. PAYMENT (§ 1) — WHAT CONSTITUTES "PAYMENT."

The word "payment" in its legal sense has a well-defined meaning, and to constitute payment there must be a delivery by the debtor or his representative, to the creditor or his representative, of money or something accepted by the creditor as the equivalent thereof, with the intention on the part of the debtor to pay the debt in whole or in part, and accepted as payment by the creditor (citing 30 Cyc. 1181).

3. PAYMENT (§ 18) — BY DRAFT — ACCEPTANCE.

The taking of a draft of a third person for a debt is not payment of the debt, unless the creditor expressly agrees to take it as such; it is not payment until the money is received on it.

4. ESTOPPEL (§ 110) — NECESSITY FOR PLEADING.

An estoppel in pais, whether arising from neglect, laches, or otherwise, must be pleaded in order to be available as a defense.

5. BANKS AND BANKING (§ 148) — DEPOSITS — PAYMENT OF CHECKS.

The bank on which a draft is drawn is not only bound to know the signature of its depositor, so that it is liable for a payment on the customer's forged draft, but is also bound to know that the indorsement of one who is a stranger is genuine, and it is liable for the payment to the wrong person of an altered check or draft.

6. PRINCIPAL AND AGENT (§ 158) — PAYMENT TO AGENT — CONVERSION BY AGENT.

Defendant mailed a check to plaintiff in payment of a debt. Plaintiff's bookkeeper, on receiving the check, forged an indorsement, cashed the check, and plaintiff did not receive it or its proceeds. Held, that defendant's debt to plaintiff was not thereby paid.

Appeal from Circuit Court, Greene County; James T. Neville, Judge.

Action by the Union Biscuit Company against the Springfield Grocer Company. Defendant had judgment, and plaintiff appeals. Reversed.

This was an action on an open account, in which the petition alleged a balance due of $212.46 from the defendant to the plaintiff for goods sold to the defendant by the plaintiff. The petition shows that the sales of goods extended from August to December, 1904. The real controversy is over $86.48 of the above-mentioned amount; the balance of the same having been paid, as plaintiff admits. The defendant filed an amended answer, in which it stated "that said defendant paid to the plaintiff the sum of $212.46 in full payment and satisfaction of the account in plaintiff's petition mentioned and described." A trial was had before the court, a jury being waived, and judgment was rendered in favor of the defendant, from which the plaintiff has appealed.

After hearing the evidence, the trial court made the following special finding of facts: "Finding of facts: The court finds the facts to be that there is no dispute about the items of the account in this cause. The only question is as to the payment of the $86.48. The court finds that the defendant purchased a draft, payable to its own order, at the National Exchange Bank in Springfield, Mo., on a solvent bank in some other city; that the treasurer of the defendant company duly indorsed the said draft in regular form, payable to the plaintiff, and that in regular course, with the remittance letter, sealed up said draft in an envelope, properly stamped, and posted the same, directed to plaintiff; that in due course of mails the letter was delivered to plaintiff's place of business and into its custody; that one Harry E. Bixby, at that time in the employ of the plaintiff, and who had access to its mail and papers and to this particular letter, wrongfully opened said letter and abstracted said draft therefrom, erasing the name of the plaintiff in the indorsement and inserting that of his own, and cashed said draft as and for his own. I find that said Harry E. Bixby was a bookkeeper in the employ of the plaintiff at the time, and that as such he had access to its remittances and to its mail. I find that the draft was paid, and in due course has been paid, by the bank on which it was drawn, and said draft as so canceled and paid has been returned to the possession of the National Exchange Bank, and that the defendant has never been reimbursed for the amount thereof."

The court gave the following declarations of law: "(3) The evidence in this case does not show that plaintiff was negligent in having in its employ the bookkeeper Bixby, who committed the forgery of the indorsement on the draft, which defendant claims was delivered in payment of plaintiff's claim. The defendant, in the usual manner of doing business, placed in plaintiff's hand a valid draft for the amount sued for, and the plaintiff lost same without any fault of defendant or of the drawer of said draft, the drawee being willing and able to pay, and that is payment by the defendant, unless refusal to accept because of not being cash is shown. (4) The mailing of the draft mentioned in evidence to plaintiff, and the receipt of same by plaintiff, does not constitute payment of the claim sued on in the absence of an agreement to that effect or conduct on the part of plaintiff which showed an intention to so treat it. But such facts entitled defendant to a credit of the amount of the draft when, as in this case, the same was kept by them and converted by a bookkeeper in their employ."

The plaintiff introduced no evidence. The evidence introduced by the defendant showed that the defendant, on October 1, 1904, purchased a draft or check of the National Exchange Bank at Springfield, Mo., for $86.48, which is as follows: "The Nat. Exchange Bank, Springfield, Mo., Oct. 1, 1904. No. 104515. Pay to the Order of Springfield Grocer Co. $86.48 Eighty-six 48-100 Dollars, J. B. Russell, Asst. Cashier. To the National Bank of Commerce, St. Louis, Mo. (Not over one hundred dollars.) $100.00." Indorsed on back as follows: "Pay to the order of H. E. Bixby, Springfield Grocer Co., S. E. Cope, Treas." "H. E. Bixby." "Albert Anhold." "Theo. Haefner." "Pay German Sav. Inst., or order, A. Laux & Son Packing Co., A. Laux." "German Sav. Inst. guarantee all indorsements. Oct. 8, 1904."

The draft was payable to defendant's own order, and was duly indorsed by the treasurer of the defendant to the plaintiff, Union Biscuit Company. In regular course, with remittance letter, the draft was sealed in an envelope, stamped, and duly posted to the plaintiff. One H. E. Bixby was at that time in the employ of the plaintiff as a bookkeeper, and by some means obtained possession of this draft. He erased the name "Union Biscuit Company" in the indorsement, inserted his own in its place, and cashed the draft as and for his own. The draft was paid in due course by the bank on which it was drawn, and, as so canceled and paid, was returned to the possession of the National Exchange Bank of Springfield, where it was originally purchased, and the...