University Bank v. Mock

• Decision Date: 06 February 1967
• Docket Number: No. 24605,24605
• Parties: UNIVERSITY BANK, Respondent, v. Richard F. MOCK, Appellant.
• Court: Missouri Court of Appeals

Page 843

411 S.W.2d 843

UNIVERSITY BANK, Respondent, v. Richard F. MOCK, Appellant.

No. 24605.

Kansas City Court of Appeals, Missouri.

Feb. 6, 1967.

William H. Costello, James H. Coonce, Kansas City, for appellant.

Bernard L. Balkin, Lloyd S. Hellman, Kansas City, Achtenberg, Sandler & Balkin, Kansas City, of counsel, for respondent.

MAUGHMER, Commissioner.

This was a court tried case. We review the action at law upon the law and the evidence as in suits in equity. Rule 73.01(d) V.A.M.R. On or about April 1 1963, the defendant Richard F. Mock, made his check in the amount of $3,000 drawn on the Grand Avenue Bank of Kansas City, Missouri and payable to Sanders Motors. This check was either delivered to or came into the possession of Carl Sanders, d/b/a Sanders Motors. On this same date Mr. Sanders endorsed and delivered it for deposit to the University Bank of Kansas City, Missouri, plaintiff herein. On or near April 4, 1963, the University Bank, having placed its endorsement thereon, presented the check through the Kansas City Clearing House to the Grand Avenue Bank for payment. Payment was refused because Mr. Mock, maker and defendant, had issued a stop payment order, directing Grand Avenue Bank not to pay the check. Plaintiff thereafter demanded payment from defendant, which demand was refused. On April 4, 1964, plaintiff filed suit against defendant, alleging the above facts in substance, and in addition, that since April 1, 1963 it had been the owner of the check. Plaintiff prayed judgment for $3,000 and interest at 6 percent from April 4, 1963.

For his answer, the defendant Mock asserted that Carl Sanders 'was never in lawful possession of or the lawful owner' of the check; that Sanders did not pay or give any consideration for the instrument; that plaintiff's sole claim to ownership is the ownership of Sanders; that plaintiff is not 'a holder in due course' and 'not an innocent owner, having paid no consideration for said check'. Defendant called no witness to explain and in fact offered no affirmative evidence as to how Sanders obtained possession of the check or what consideration, if any, he gave for it.

Mr. Logan F. Wyrick, who in April, 1963, was president of the University Bank, was called as a witness by plaintiff. Mr. Wyrick said that on April 1, 1963, Sanders Motors made two deposits in the University Bank, the $3,000 check here in question, and one for $8,325. Photocopies made from the microfilm records of the bank were introduced, showing both deposits. The witness called attention to a difference on those two April first deposit slips. The one for $3,000, he said, 'has an okay by our cashier Ed Donnell', 'that shows that the funds are free to be paid on, that we had given immediate credit on the account for the $3,000, due to the fact that I knew Mr. Mock personally, knew him as a man of good reputation, and this check was verified from the Grand Avenue Bank that the check was good and a satisfactory account'. He said the $8,325 deposit ticket had a "hold' marked on this of $3,475 or five days' which meant 'we were supposed to hold the funds, the $3,475 as uncollected for five days from April the 1st, 1963'.

Some controversy developed as to the Sanders daily balance with the bank from April 1 to 4, 1963. The witness Wyrick contended that the daily balances shown on the ledger sheet were not 'true balances' because same included some uncollected items, many of which were actually never collected. Mr. Wyrick testified that on April 2, 1963, the bank honored or paid out checks against the Sanders account, totaling $3,282.33. He said that after the $3,000 check had been returned and as of April 11, 1963, the Sanders account was overdrawn by $4,422.64, but they later collected about $700 thereon, and that the account at the time of the trial was overdrawn by $3,722.64.

A judgment was entered on March 28, 1966, and recites findings that 'the plaintiff gave immediate credit for defendant's check to the account of the depositor, and that the entire credit was exhausted by withdrawals of said credit and that pursuant to law, plaintiff became the owner of defendant's $3,000 check and that plaintiff is entitled to recover judgment against the defendant in the amount of $3,000, plus interest at 6% per annum from April 4, 1963 to the date of this judgment, in the sum of $532.50'. Judgment accordingly in the sum of $3,532.50, with costs, was duly entered.

Defendant has appealed and lists three assignments of error. Number one asserts that under Section 402.030, V.A.M.S. any credit given to a depositor is revocable except as to that part actually withdrawn, and therefore title to the $3,000 check did not immediately pass to plaintiff bank. Section 402.030, supra, after setting forth that unless there is an agreement otherwise, such depositor bank shall be 'agent of the depositor for its collection', concludes 'where any such bank allows any revocable credit for an item to be withdrawn such agency relation shall nevertheless continue except the bank shall have all the rights, of an owner thereof against prior and subsequent parties to the extent of the amount withdrawn'.

Considering the testimony of Mr. Wyrick and the bank exhibits (the only evidence presented) it seems reasonable to conclude that plaintiff bank gave immediate credit for the $3,000 check. Even if only 'revocable credit', as described in Section 402.030, supra, was given, nevertheless it was fully exhausted on April 2, 1963, or two days before plaintiff learned that payment on the check had been stopped. In either event, plaintiff bank appears to have been possessed of 'all the rights of an owner thereof', certainly to the extent of the withdrawals which exceeded the $3,000 credit.

The witness Wyrick testified that plaintiff bank on April 2, 1963, paid out six checks against the Sanders account, totaling $3,282.33 and that thereby the $3,000 credit was used up and Sanders was overdrawn. In this connection defendant says that two of those six checks were items of $840 and $900, which had been deposited prior to April 1, 1963, and therefore were not chargeable against the $3,000 check credit. Those two particular items had been received before April 1, and Sanders had been given revocable credit therefor. The two checks were uncollectible, or at least were not collected by plaintiff bank, and when they were returned on April 2, were, with other items, made good at least partially by charging...