270 P. 943 | Cal. | 1928
Lead Opinion
Action brought to recover the sum of $601.02 from the defendant bank, which amount plaintiffs allege they had deposited with said bank to their credit. [1] The defense by the bank is that it paid out said sum upon two checks drawn by the plaintiffs. The evidence shows that the plaintiffs had a checking account with defendant at least in an amount equal to the amount sued for. The plaintiffs were engaged in the plumbing business and had in their employ as foreman of their plumbing department one J.B. Tailer. They were indebted to the Manual Arts Plumbing Company for materials purchased from said company on account of two jobs, upon which Tailer had acted as foreman. In satisfaction of this indebtedness to the Manual Arts Plumbing Company, they drew two checks and gave them to Tailer with instructions to deliver them to the Manual Arts Plumbing Company. One of these checks was by mistake made payable to the Manual Arts Hardware Company, instead of the Manual Arts Plumbing Company. The total of these two checks was the amount sued for herein, and said checks, together with their subsequent indorsements, are as follows:
*340"OCEAN PARK BANK 90-193 "Commercial Savings "Santa Monica Branch. "Santa Monica, Cal. Sept. 2, 1922. No. 103
"Pay to the order of Manual Arts Hdw. Co. for J B Tailer $283.02 Two Hundred Eighty-Three and 02/100 Dollars.
"THE SLINGLUFF-COUTURE Co. "EMILE J. COUTURE."
(Indorsement on back of above check as follows):
"James B. Tailer, Manual Art Hard. Co."
"OCEAN PARK BANK 90-193 "Commercial Savings "Santa Monica Branch. "Santa Monica, Cal., Sept. 25, 1922. No. 177
"Pay to the order of Manual Arts Plumbing Co., for J.B. Tailer $318.00 Three Hundred Eighteen and xxx/100 Dollars.
"THE SLINGLUFF-COUTURE Co. "EMILE J. COUTURE."
(Indorsement on back of above check as follows):
"Manual Arts Plumbing Co. J.B. Tailer."
Tailer, instead of delivering these checks to the Manual Arts Plumbing Company, presented them to the bank himself and, after indorsing his own name on each of said checks, and forging the name of the Manual Arts Plumbing Company to the check which was made payable to said company, and the words "Manual Arts Hardware Company" to the other, received the money thereon, and absconded. He never paid the money, or any part thereof, either to plaintiffs or to the Manual Arts Plumbing Company. Upon this state of facts the trial court made findings in favor of the plaintiffs and from a judgment predicated upon said findings of fact the defendant bank has appealed.
The rights of the parties hereto are governed entirely by the terms of the two checks, and cannot in any way be affected or modified by any undertaking or agreement between the plaintiffs and Tailer, nor by reason of the purpose for which the checks were given by the plaintiffs to Tailer, in the absence of any knowledge by the bank of such agreement or purpose. The bank was authorized to act upon the directions given by the plaintiffs as these directions appear upon the face of the cheeks. If the checks were authorizations on the part of Tailer to receive from the bank the amounts stated in the checks, then the payment of said checks by the bank was legal and the plaintiffs cannot recover in this action. This would be so even if Tailer forged the name of the Manual Arts Plumbing Company on one check and that of the Manual Arts Hardware Company on the other. For if the checks can be legally construed as *341 authorizing Tailer to receive the amount named in the checks from the bank, then the indorsement of the Manual Arts Plumbing Company to either of said checks was not necessary in order that the bank pay the amounts called therefor to Tailer.
It will be noted that each check contains an express direction to the bank to pay the amount of money therein named to the Manual Arts Company. In each check the name of the company is immediately followed by the words "for J.B. Tailer." There is no question, had the bank paid the money called for by these checks to the regular payee named therein or upon its legal indorsement, that such payment would have been legal and would have bound respondents, as the drawers of said checks. And this would have been so in the absence of the indorsement, or any other action taken on the part of J.B. Tailer. In other words, the checks as drawn contained an express direction to the bank to pay the same to the Manual Arts Company. What effect, therefore, have the words "for J.B. Tailer" as they appear in the body of the checks? Appellant contends that the legal effect of these words in the checks, at least between the parties hereto, is to make Tailer the beneficiary of the proceeds of said checks. Whether he was the actual beneficiary of said proceeds would depend upon his relations with the Manual Arts Company. Let us suppose that by some working agreement between the plaintiffs and the Manual Arts Company the money called for by the checks was in fact the property or money of Tailer. In such a case there can be no doubt but that Tailer would have a beneficial interest in said money, and at most the Manual Arts Company would simply be the trustee of said funds when collected for Tailer. In such a case Tailer, as the real party in interest, could maintain an action against the bank for said proceeds in case the bank refused to pay the checks. Such action could be maintained by Tailer in his own name (Code Civ. Proc., sec. 367; Civ. Code, sec.
There is but little direct authority to be found upon the question of the legal effect of a check drawn in the form in which the checks involved herein were drawn. In the case ofRidgely Nat. Bank v. Patton Hamilton, reported in 109 Ill., page 479, it was held by the supreme court of Illinois, where a check was drawn in favor of Patton Hamilton for the account of Lewis Coleman Co., that Patton Hamilton were the trustees of Lewis Coleman Co. But in that case the evidence showed that the check was drawn in payment of an account due Lewis Coleman Co. This account was in the hands of Patton Hamilton, attorneys, for collection and the debtor in payment of the account drew the checks in favor of the attorneys "for account of Lewis Coleman
Co." Had Lewis Coleman Co., being the real parties in interest of said check, brought *343
suit thereon against the bank, we think that without doubt, at least under our system of procedure, they could have successfully maintained said action and recovered the amount due thereon from said bank. There is nothing contrary to our views above expressed to be found in Brown v. Cow Creek Sheep Co.,
[2] From another angle of the case we think that the respondents should not be permitted to escape their responsibility upon said checks. The checks as drawn are undoubtedly uncertain in their directions as to whom the money for which they were drawn was ultimately to belong. By drawing these checks in the manner in which they did, thus rendering it uncertain from their terms whether they were for the benefit of the Manual Arts Company or J.B. Tailer, and then delivering them into the possession of the latter, the respondents placed it in the power of Tailer to mislead the bank in paying the money to him. In such a case the plaintiffs should suffer for the wrongful acts of Tailer. "Where one of two innocent persons must suffer by the act of a third, he, by whose negligence it happened, must be the sufferer." (Civ. Code, sec.
The judgment is reversed.
Richards, J., Shenk, J., Langdon, J., Preston, J., and Seawell, J., concurred. *345
Concurrence Opinion
I concur in the judgment of reversal upon the ground last stated in the majority opinion. By drawing the checks in the manner in which they did, and placing them in the possession of J.B. Tailer, the respondents put it within his power to mislead the bank into paying the money to him, and they should therefore suffer for his wrongful act.
I am not sufficiently convinced as to the treatment of the first point in the opinion, which, in effect, holds that the checks can be legally construed as authorizing Tailer to receive the amount named from the bank, to agree with the conclusion therein stated, for which reason I express no opinion on that matter.