Wilton Manors Nat. Bank v. Adobe Brick & Supply Co.

• Decision Date: 20 February 1970
• Docket Number: 2413,Nos. 2398,s. 2398
• Citation: 232 So.2d 29
• Court: Florida District Court of Appeals
• Parties: WILTON MANORS NATIONAL BANK, Appellant, v. ADOBE BRICK & SUPPLY CO., Inc., a Delaware corporation, and First Bank of Plantation, a corporation chartered under the banking laws of the State of Florida, Appellees. FIRST BANK OF PLANTATION, Appellant, v. ADOBE BRICK & SUPPLY CO., Inc., a Delaware corporation, et al., Appellees.

Page 29

232 So.2d 29

WILTON MANORS NATIONAL BANK, Appellant, v. ADOBE BRICK & SUPPLY CO., Inc., a Delaware corporation, and First Bank of Plantation, a corporation chartered under the banking laws of the State of Florida, Appellees.

FIRST BANK OF PLANTATION, Appellant, v. ADOBE BRICK & SUPPLY CO., Inc., a Delaware corporation, et al., Appellees.

Nos. 2398, 2413.

District Court of Appeal of Florida, Fourth District.

Feb. 20, 1970.

Gaylord A. Wood, Jr., of Rogers, Morris & Ziegler, Fort Lauderdale, for appellant Wilton Manors Nat. Bank.

Davis W. Duke, Jr., and James J. Linus, of McCune, Hiaasen, Crum & Ferris, Fort Lauderdale, for appellant First Bank of Plantation.

Theodore, P. Sobo, Fort Lauderdale, for appellee Adobe Brick & Supply Co.

REED, Judge.

This is an appeal from an amended final judgment rendered by the Court of Record for Broward County, Florida. The appellants, Wilton Manors National Bank and First Bank of Plantation, were the defendants in the trial court. The appellee, Adobe Brick & Supply Co., Inc., (hereafter called 'Adobe') was the plaintiff.

The complaint filed by Adobe against both banks alleged that in April of 1966 the defendants negligently and wrongfully paid a check on which the plaintiff was a co-payee without obtaining the plaintiff's indorsement. The defendants' answers essentially contained a general denial. The cause was tried before the judge without a jury on 15 March 1968. It resulted in an amended final judgment against both of the banks for the full amount of the check. The appeal is from the amended final judgment.

The record indicates that an organization by the name of Gene's Plastering, Inc., had a contract with Boniello Homes, Inc. Under the contract, Gene's Plastering, Inc., was to perform certain work on an apartment building owned by Boniello Homes, Inc. In the performance of this contract Gene's Plastering, Inc., used meterials supplied to it by Adobe on open account. For these materials, Gene's Plastering, Inc., owed Adobe $1,569.39.

Boniello Homes, Inc., owed Gene's Plastering, Inc., $3,150.00 for the latter's work on the apartment house. On 8 April 1966 the president of Boniello Homes, Inc., spoke with an agent of Adobe by telephone and discovered that Adobe had not been paid for the materials which it supplied to the job for use by Gene's Plastering, Inc. After having obtained this information, Boniello's president made out a check for the $3,150.00 due to Gene's Plastering, Inc., on its contract with Boniello. The check was dated 8 April 1966 and drawn on Boniello's account with the defendant Wilton Manors National Bank. The payees named in the check were 'Gene's Plastering and Adobe Brick Co.' The check was given to Eugene Mall who was evidently the owner of Gene's Pleastering, Inc. The check was indorsed 'Gene's Plastering, Inc.' and deposited without the indorsement of Adobe in the account of Gene's Pleastering, Inc., with the defendant First Bank of Plantation. The check was then forwarded to the drawee, the defendant Wilton Manors National Bank, and charged against the account of Boniello Homes, Inc., the maker of the check. None of the proceeds from the check were received by the plaintiff, Adobe, and this law suit followed. At the time the check was delivered, Gene's Plastering, Inc., owed the plaintiff about $9,000.00 on open accounts, but only $1,569.39 of this amount was represented by materials supplied for incorporation in the building owned by Boniello Homes, Inc.

The issue here is whether or not the collecting bank (First Bank of Plantation) and the drawee bank (Wilton Manors National Bank) or either of them may be held liable to the co-payee, Adobe, because of their treatment of the check and, if so, the extent of such liability.

At the outset we should note that the controlling statutory law is the Negotiable Instruments Law of the State of florida as it existed prior to the adoption of the Uniform Commercial Code. All of the pertinent transactions occurred prior to 1 January 1967, the effective date of the Uniform Commercial Code.

The check in question was an instrument payable to order. Section 674.10, F.S.1965, provides that an instrument is payable to order where it is drawn payable to the order of a specified person or his order. That statute also provides that where the instrument is payable to order, the payee must be named or otherwise indicated therein with reasonable certainty. The evidence in the present case indicates that the plaintiff and Gene's Plastering, Inc., were indicated on the face of the check as payees with reasonable certainty.

Where a negotiable instrument is payable to order, it cannot be transferred without the indorsement of all payees who are not partners, unless one of such payees has the authority to indorse for the others. Section 674.33 and 674.44, F.S.1965. In the present case, there is no evidence that Gene's Plastering, Inc., had any authority to indorse the check for the plaintiff. It follows that when the collecting bank, that is the defendant First Bank of Plantation, took possession of the check without the indorsement of the plaintiff it acquired an imperfect title to the instrument. When the collecting bank made the proceeds of the check available to the co-payee, Gene's Plastering, Inc., it deprived the plaintiff of its interest in the check and is liable in conversion for the value of that interest, Glasser v. Columbia Federal Savings and Loan Association of Miami Shores, Fla.1967, 197 So.2d 6; on remand, Glasser v. Columbia Federal Savings and Loan Association of Miami Shores, Fla.App.1967, 198 So.2d 345.

As for the drawee bank, Wilton Manors National Bank, it is likewise liable to the payee for the payment of the check on the unauthorized indorsement, Lewis State Bank v. Raker, 1939, 138 Fla. 227, 189 So. 227. In the Raker case the opinion indicates that the plaintiff, Ira B. Raker, as the adminstrator of a decedent's estate, wrote a check on the estate's bank account with the Lewis State Bank. The...