*1 Appellant, v. City, Bank of Produce The First National Kansas City. 89 33. Kansas One, December Division
Scarritt, appellant. North for Jones respondent. E. Cowherd Gage, Dean Lesher and Carson B. John counts to recover three BRADLEY, petition filed C. Plaintiff origin in The had its each count. cause interest on $1000 issued issue of three gave case'the court plaintiff’s At close of defendant. it to find for the instruction, directing jury to defendant. peremptory involuntary with leave to nonsuit move Thereupon, plaintiff took- an timely filed, but overruled and Motion to set aside to set aside. granted to the Kansas appealed. appeal Court holding Appeals of the trial affirmed Appeals. facts, recover.- holding plaintiff, could not court, *3 that [First (2d) 59 S. W. Bank v. Produce The National Judge by of was written deciding opinion Appeals of Court the opinion. Judge Judge separate in a Bland concurred Trimrle Shain. dissenting opinion. opinions Appeals in the Court of filed a April February rehearing motion 6, 1933, 3, and for was denied filed 6, 1933, Appeals 1933. the of certified April the cause to this request Judge the principal at the of who deemed court Trimble, opinion holding concurring to be conflict with the in American Sash Company, 332 Company 98, Trust Mo. 56 Door v. Commerce (Mo.), 726; City 273 S. W. 1034; State v. Andrews Ry. 129 Co., of Louis v. St. F. Mo. S. W. St. Louis-S. 691. Judge request appear published opin of Trimble does in the ion, certifying. court, One, but in the order This Division on No by court, adopted by 16, 1934, vember in an the Sturgis, judgment trial Motion rehearing affirmed the of the court. and both sides filed briefs on and the
sustained cause was briefs, argument, May Term, on without oral at our submitted alleged of the petition plaintiff It in the first count that both Clearing of the Kansas defendant were members House Associa- association, agreed of tion and that as a member said defendant to be constitution, regulations of by association; rules and the bound the 25, 1929, plaintiff its cashier’s September $1000, that issued check for Edgar; September of that on or payable to the order about clearing check to 26th, delivered said house' defendant association course; in the that when so for clearance usual delivered the check by payee, Edgar, been endorsed purported to have to the order by defendant; of Wilson and Wilson and that on Ben or Sep- about plaintiff by 26th check was the clearing tember house relying upon endorsement association and that defendant endorsements, prior genuineness of validity and guaranty of the its alleged the endorsement that cheek; and it is paid said plaintiff alleged plaintiff that forgery. It is further Edgar, was a payee, with an af- to defendant cheek tendered the on December Edgar was endorsement plaintiff that the officer of fidavit of an $1000, pay plaintiff defendant' demanded that forgery, a Article alleged that It is further refused. that defendant provision a contained clearing house association of the constitution association, bear a should item; cleared that “when endorsement, or endorsement forged endorsement or unauthorized unauthorized, forged been endorsee, to have alleged payee, demand, said up on when clearing take it should member same complaining payee or of the accompanied by an affidavit item clearing as- alleged house that Article It was endorsee.” all written provided place that “in endorsements sociation they stamped by stamp clearing house, should be checks sent to. City'Clearing House,’ the name bearing ‘Kansas the words using date, the member said presenting” “and that and the genuineness en- previous of all stamp responsible for the made itself same in effect third counts are the The second and dorsements.” The cashier’s cheek second count, except dates. as the first and in the third count by plaintiff October count was issued was issued November cashier’s check 13, 1929. general denial then each answered answered Defendant setting alleged separately, facts which defendant con- out count count, alleged Answering first defendant made it not liable. tended interest; Lloyd’s of party was not the real interest; Lloyd’s party issued to London was the real insuring plaintiff against policy insurance, loss on account *4 upon any forgery of endorsers and drawers instruments of names Lloyd’s had upon plaintiff; reimbursed drawn any may it plaintiff in for loss which have incurred. Defendant full Edgar forgery, alleges denies that the endorsement of was' a and payable Edgar, cashier’s check to be made that Wilson caused the to Edgar knowing payee,” was “a fictitious and that no Edgar knowledge in or check, had interest name intended, issued, at the the check was that Wilson time to en- Edgar; written, payable name of that the check dorse the was to a request Wilson, at the person, fictitious was delivered Wil- to by plaintiff, and, alleged, son it is that under facts and the law bearer,” “payable that, to being pay- the check was the cheek Edgar bearer, was “unnecessary able to the endorsement to passing alleged loss, of the title thereto.” Defendant further that any, by plaintiff if sustained “was not sustained reason of the check, “by issuance” of the cashier’s but reason of and on account of prior delivery closed transaction distinct from issuance and al- to the said Ben Wilson” of cashier’s check. There are other legations count, necessary to the first answer but is not to re- fer The answer to to them. the second and third counts is the same reply as the first new. gen- answer count. denied matter erally. developed by plaintiff’s
The facts as follows: Septem- evidence are 25, 1929, manager Ben T. and bookkeeper ber Wilson was office City, Missouri, companies, Kansas of certain construction viz.: List & Company, List Clark Company Construction Construction Bagwell Company. List Construction These were railroad con- companies manage- struction and were interrelated and one handling banking ment. Wilson had “the transactions” of companies. secretary these C. J. was signed Brown and treasurer and checks for the construction companies. Edgar There was a James time, “superintendent who at was had been some of one of the companies, nothing outfits” these but he knew about the trans- giving cause, actions rise this concerned, was not and so far as Edgar Bagwell shown, heard never of the matter. List & Construction Company and List & Company Clark Construction had an account September 25th, bank. Wilson filled out a check of the Bagwell &List Company $1000, payable Construction for plain- signed tiff bank. This check for company by J. Brown, C. secretary its and treasurer. Wilson took this check to Wilson, plaintiff’s exchange teller, direction of F. A. Berg, prepared a cashier’s cheek $1000 for Edgar to James and de- livered same to Wilson. Wilson then had the cashier’s name placed After thereon. cashier’s check completed and delivered to Wilson, he endorsed “Pay it as follows: to the order of Ben Wilson” signed Edgar,” deposited “James then Wilson the cashier’s cheek in defendant bank to his own credit! The defendant bank thereafter endorsed this cashier’s check: “Produce Sept. 26, 1929, Clearing Kansas House.” The cashier’s check of October 26th was obtained in the same manner as was the first one, but the check bank for this second cashier’s cheek was the cheek of the List & Clark Construction Company. Wilson List took the & Clark Company Construction plain- check to tiff bank and obtained a cashier’s check Edgar, and en- this dorsed second cashier’s “Pay cheek: to the order Benjamin T. Wilson, City, Kansas Edgar, Missouri. deposit act. Benjamin T. Wilson.” The second cashier’s check was deposited *5 Wilson in bank defendant to Wilson’s credit. The check was then by bank endorsed defendant as follows: “Produce Exchange 7, 1929, City Nov. Clearing Kansas House.” The cashier’s check of November 13th was in way, obtained the same and the initial 26th, on was drawn the List of October transaction like
check, third cashier’s endorsed the Company. Wilson Clark Construction Edgar’s name, he, Wilson, wrote Edgar” and under “James check: in deposited check was This'cashier’s name, Ben Wilson. his own by was defendant: endorsed to Wilson’s credit and bank defendant Clearing City 1929, Kansas Exchange Bank, Nov. “Produce against charged respective company cheeks bank Plaintiff House. paid' and company which drawn upon of the the account clearing house. as the cashier’s checks each of $1000 for plaintiff, checks each from got Wilson two other April being and March and as'we these dated understand in the same manner as were obtained the first the record these were April 1st March and 30th pay- cashier’s checks of were three. The in Wil- deposited defendant bank to Edgar were able to 1st way. The cheeks March usual credit and cleared son’s cause, we mention present involved in the 30th are not April Lloyd’s paid with-Lloyd’s. explain settlement made them appears $5000. It from the settlement compromise plaintiff bank plain- by deposition was taken offered of Wilson whose evidence charges forgery five different he convicted on tiff “was Q. any- years Did that have to four this institution. sentenced you identified, is, thing three have items to do these against you these items? A. was to charges made on That specific charges.” cover all plaintiff and defendant were members
It admitted that both clearing pertinent 18 and association. So far as Articles house clearing as of the house association are follows: constitution forged endorsement, (18) “When item bears a or endorsement unauthorized, forged to have been alleged by or-endorsee clearing on up shall take it demand when item the member same said complaining payee accompanied an affidavit of the or endorsee forged (19) place “In that said endorsement unauthorized.” house, cheeks the clearing all sent to written endorsements stamp bearing they words stamped ‘Kansas shall Clearing House,’ presenting them, name the date year they on which month and are cleared. The member us- thereby genuineness itself ing stamp responsible makes said endorsements, all previous and for in' of all informalities such en- dorsements, any special guarantee; without endorsement for provided, aforesaid, stamp shall not be such endorsement construed guarantee for, missing supply, or as a endorsements.” . If the cashier’s bearer then can recover, because, payable, if so required. no endorsement -was principal concurring R. Both the [See. Appeals City held that Kansas under the facts the
97 opinion payable principal In the it checks were to bearer. cashier’s purposes issued to cheeks to all were is stated that “the intents therefore, man, any had or interest and a straw who neither claimed purpose case, as checks issued to for the of this should be treated concurring In drafts bearer.” the it is stated “the checks) (cashier’s payable made to bearer under the 1929, providing provisions of Section Revised Statutes that an .(3) ‘. . payable payable instrument is to bearer . when it is nonexisting order person to the fictitious or such fact was ” making person payable.’ known it so This court opinion by Sturgis, payable held that the cashier’s checks were theory person making bearer on the that Wilson was “the so it payable” 3 provided in division of Section Revised Statutes 1929, provides: Section Revised Statutes instru- “The n payable (1) is ment to bearer: it is expressed pay- When so able; (2) bearer; person or it is payable when named therein or (3) or it payable when is to the order or nonexisting fictitious person person and such making payable; fact was known to the it so (4) payee when the name purport of the does not to be the ñame any person; (5) only when or last endorsement is an en- in blahk.” dorsement
The law is well payee established that “the in an instrument will be fictitious, though deemed designating existing an person, if there nowas he intent should have a beneficial interest in the paper.” Sash Door& Co. v. Co., Commerce Trust [American Mo. S. (2d)W. 1040; l. c. J., 305, p. C. Edgar sec. James person, a real it but was not intended he should have bene ficial interest in the cashier’s cheeks. Wilson testified that he used “the Edgar name,” name as a fictitious intending to en dorse the checks deposit himself and to his own account. That' payee named in the was a checks fictitious within the meaning of the Therefore, statute conceded. if Wilson was the person, within meaning statute, of the 2638, making Section checks Edgar, then, to James under the statute, the checks were bearer, because Wilson knew payee that the person, was a fictitious plaintiff’s officers did not so know. The question, therefore, is: Was Wilson person making “the (the it checks) so payable,” or was person? bank such In American Sash & Door Co. v. Co., Commerce Trust supra, appears that a payroll clerk up in that case made payroll turned it over bookkeeper, who made out the checks and de livered them to secretary and treasurer who signed them for the n company, relying on the information to him. It turned out payroll that the padded clerk payroll had with fictitious names and when the signed checks managed he to extract those so forged the name of persons and fictitious
made to its loss on these to recover its bank plaintiff sued them-. cashed were, checks defenses was one of the checks right to cash had the the defendant facts, payable to bearer Sash & Door Co. regardless of endorsements. 25 W. Appeals, Kansas before the was first case *7 following Martin held, Mueller by that court (2d) 545, it was person 465, 218 that the meant (Ky.), S. W. Liberty Ins. Bank v. Co., maker, the Sash & Door 2638, was not statute, Section the. case actually it,” in that was drew who “who the individual but (2d) (56 1034, l. c. held S. secretary This court and treasurer. maker “means the 1041) in the statute person word used that the Company, & Door was the Sash in that case which paper,” there, that the checks not know facts did maker, under the also, payees. Seaboard [See, payable to fictitious 26, 33, l. c. 85 N. E. America, 193 N. Y. Bank v. Bank of National (N. S.) 499; v. & Commercial 22 A. Paine Continental 829, L. R. People’s v. Express Sav. App. 527; American Co. Bunk, 259 Ill. Nat. is no at bar there claim (Iowa), 181 N. W. In the case Bank Edgar payee. was a fictitious But de plaintiff bank knew that that “making it so urges payable,” was the that Wilson fendant reached, opinion by Sturgis, such conclusion and in our former Company case, theory distinguishing supra, & Door the Sash depositor’s check and a that there was such distinction between ruling Company & Door in the Sash cashier’s check as make the present we inapplicable .the facts. On reconsideration rule case meaning of 3 person within the division that bank was the 2638, making Edgar, of Section the cashier’s person, plaintiff bank, since not payee, a fictitious and that said did fictitious, were not know that the the checks bearer. clearing pleaded merely house rules and in evidence are general lawr. law
expression of the Both the 19 of Article clearing “responsible genuineness house rules make defendant previous being pay endorsements.” The not all cashier’s'checks forgeries, to bearer the endorsements Wilson were Ex able Am. People’s Savings (Iowa), Bank 181 press 701, Co. v. N. W. l. c. 703’ passed to the checks and no title defendant under these any forged having checks, endorsements. Not title to the defendant plaintiff, entitled to on them from plaintiff, was not collect if pleaded precluded on the neither not defense it has nor shown loss, any from can recover back defendant the amount interest, demand, from defendant on these cheeks. [Real Estate, etc., Security Co., Trust Co. v. United 303 273, Trust Pa. 593; Bank 154 Atl. First National v. Federal Bank, Reserve 88
99 National Bank 1105; 294 Leather 589, Pac. Mont. Manufacturers’ 26, 3, 32 Sup. 128 9 Ct. L. Bank, U. National Ed. v. Merchants’ 29 Exchange Bank, 302, 214 U. S. States National 342; v. United 1184; Ann. First National Bank 1006, 53 L. Ed. 16 Cas. 665, Sup. Ct. 14 547, 197 Pac. Bank, 264, 100 Ore. States National
v. United A. Exchange Bank, 479; National Bank Yorkville American v. L. R. Id., Div. Supp. 621; App. 885, N. 204 Y. Misc. N. 879; America, Bank Seaboard National v. Supp.
Y. S.) (N. 499; L., 22 R. A. 3 R. C. 85 N. E. L. sec.
N. Y.
p. 616.] having pleaded plaintiff recover, nor shown
Can loss? by Judge involved,' was question, This as were all others ruled Trimble dissenting opinion, First National Bank v. Produce in his adopt 59 S. W. l. we said: c. what is there “Nor say is it a defense to has been reimbursed for its loss insuring company business, an insurance it in the of its course longer party real in interest, having and that is no right way pecuniary no in the matter. Plaintiff has in no or manner assigned its cause of whether action, company its insurance has *8 not, it or it the real in party reimbursed still-remains interest under Co., App. laws. v. Mo. Pac. Railroad 143 547, our Mo. 128 S. [Foster 36; (Mo. W. Sexton v. Anderson Car Co. 234 App.), 358; Elec. S. W.
Keeley Indemnity 439, 222 America, v. Co. of Mo. 7 App. (2d) S. W.
It is our conclusion trial overruling plain- court in erred to involuntary judgment tiff’s motion set aside the nonsuit. overruling
order said to set' motion aside should be reversed cause remanded with sustain direction said motion set aside involuntary and to set aside said nonsuit and reinstaté said cause, Ferguson Hyde, is so CG., it ordered. concur. PER foregoing opinion by Bradley, CURIAM: The adopted is opinion judges the Court. All the concur. Rehearing.
On Motion for BRADLEY, C. In next to the paragraph opinion last question: filed we intended to answer the recover, Can having pleaded any loss? by adopting Judge shown what nor Trimble said on question dissenting this in opinion, but, his perhaps, did not we make clear. In quoted, ourselves addition what we which think pertinent, Judge we dissenting is opinion in his Trimble, (59 87) page S. W. urged “It said: is cannot re cover because it has no loss.’ . . ‘suffered . The suit is not one damages, for money but to recover had defendant bank and re- ceived, but which it gave never had title and it for which
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n as ordinary depositor’s check. the in concerned appears opinion, our reasoning therein the applied the We followed that case and as correctness of present no doubt to the case and have facts in the in application is a difference the ruling. It there our is true affecting ordinary checks and a cashier’s of of law of the rules some exchange check, merely a bill of being Example, “a cashier’s check. of its itself, accepted by in act by a bank advance the
drawn on subject by payee after endorse is not to countermand the issuance, Michie, by Banks ordinary an check the drawer.” ment, as is [5 exchange a bill Banking, p. statute 251, sec. Our defines 454.] writing person order 'addressed one as “an unconditional in signed it, another, giving requiring person the the whom or at a or determinable future pay addressed on demand fixed is 2754, money time a sum certain to order to bearer.” R. [Sec. n sec.'2754, p. 1929, Ann., S. Mr. Stat. And statute defines a 708.] exchange bill check as “a drawn on on demand.” Ann., p. only R. 2813, Mo. Stat. see. [Sec. difference, except application law, some apparent rules of ordinary check, check the ordinary between and cashier’s one, drawer, in a check is drawn on other than while n check, both the and the drawee We are drawer are un same. appreciate how this work able to difference could a different con 3 of application struction division Section Revised Stat given & case, utes than Door Co. in the American Sash supra. Express People’s Savings (Iowa),
American 181 N. Co. v. Bank opinion, proceeds cited our was an action to recover the drawee, drafts in which was both drawer and four.' present payees purchased case. The were fictitious. Crozer .One personal gave drafts and therefor his on the cheeks drawn de- receiving bank. After Crozer them drafts endorsed fendant writing respectively thereon names of payees cashed them at bank. The defendant drafts then endorsed the cashier n bank “to the defendant the order of.the Continental Commercial Chicago,” further, “prior National endorsements guaranteed.” presented by Chicago The drafts were bank to the plaintiff express company, paid. and were plaintiff express com- pany, having brought “not realized” checks, against on Crozer’s suit plaintiff’s court, defendant bank. case, At the close of the trial *10 motion, Supreme Court The directed a verdict the defendant. “if direction, saying that judgment Iowa reversed on such of the action, averments were plaintiff’s petition a of and its stated cause was in by evidence, then the in error plaintiff’s sustained court answer, regardless the directing verdict, of the defense' tendered special regardless allege prove the of of failure Supreme damage.” ruling question presented, Iowa In the the payable said: the in to bearer? The “Were instruments suit or question negotiable form, payable to fictitious drafts are nonexisting persons. to the order payable When a draft is nonexisting person, drawer, the fictitious or and such fact is known to payable bearer. When the name of the [Section 3060a9.] pay- be it is also purport person, does the name of body persons to bearer. Id. whether able ‘Person’ includes incorporated plaintiff company or not. as [Section 3060al91.] paid drawer intended that these named drafts should the payees, purchaser, Crozer, and not to the and it was not known the drawer that these drafts were to the order of fictitious nonexisting payees. being true, This not payable the drafts were ’’ adopt bearer. Such is reason it. sound and we is stated in we
It the motion for that in the filed case) (the overlooked “the fact that this Iowa was after case retried opposite remand and a decision rendered the result.” Iowa retried, Express case was People’s Savings American Co. v. (Iowa), in, N. W. but when the evidence of both sides was entirely picture an different appeared than at Of first trial. the evidence at the trial “Al- second the court said: though the clerk express Ra,pids or cashier of the Cedar company at testified that the drafts in to be were-intended to payees, named and that he did not know that they nonexisting payees, the order fictitious it is shown that Mr. Moyer, general agent company, knowledge had that Crozer adopting securing a trade name or names in the drafts which subsequently paid Chicago the defendant bank plaintiff. office The trial clearly court was correct in its finding plaintiff company that the knew the method and manner of handling Crozer in these transactions company as a of law knowledge matter had that when these numerous drafts were payees issued the thereof were names purpose used Crozer for the conducting business, words, and for no other. In other the facts of it was express case found that company, drawee, drawer and payees drafts knew were fictitious. While a “different result” was reached in the second trial opinion, entirely second it was on different state of facts found, and in no Holding manner affected opinion. in the first *11 Complaint rehearing is made the motion for that we did giving delay part mention the issue of notice on the ‘‘ amounting months, says approximately two as defendant in the motion, discovery alleged forgeries notifying after before de appeal by plaintiff fendant. This case is here on from an order of refusing aside, motion, involuntary the trial court to set an mon alleged delay defense, suit. The defense is an affirmative not, burden which was opinion filed, on defendant. "Wedid question, discuss that because we did not-consider and do not now that, consider plaintiff’s case, the facts disclosed there was say reason to could not recover delay. because of the Plaintiff’s evidence tended to show that as soon facts as the relative definitely to the situation ascertained, discovered or notice was given. Plaintiff’s July, 1930, auditor testified that.in June companies “suspected learned construction irregular some ities, they were, they know; they but what having didn’t an audit made ... irregularities determine what were.” “Q. Plaintiff’s auditor Well, testified further: they (the did con companies) struction at least notify or did there your come to notice alleged forgeries certain in connection with some cashier’s checks you which Q. had issued? A. you Yes. I will alleged ask whether forgery in connection with some checks which had cleared Exchange the Produce your came to notice? A. sir. .Yes* Q. As soon as definite you notice came to so that the checks could you what identified did do? A. We made a upon demand Produce Q. Bank for the amount. Was in writing? A. Yes.” Notice and by registered demand were made August mail 14, 1930. This notice or was not demand verified contemplated as clearing Article association, house and on 16, 1930, December verified notieé or demand was made on Manifestly, defendant. so far disclosed, as there is no merit in defendant’s ques contention on the' delay. tion of
The motion for overruled, should be and it is so ordered. Ferguson Hyde, CC., concur.
PER foregoing CURIAM: The opinion by Bradley, adopted the court. All judges concur. Kelly Cape Frank v. Appellant. Girardeau, (2d) 41. One,
Division December