Merchants' Bank v. Prudential Insurance Co. of America

BROADDUS, J. — This suit was instituted before a justice’s court upon the following check: No. 210 Office Of The Prudential Insurance Co. of America. Sedalia, Mo., Oct. 7,1903. Third National Bank, Sedalia, Mo. Pay to the order of Martha A. Crandall, One Hundred Thirty-five and 54-100 Dollars in full settlement of claim under Policies Nos. 6,439,662 and 7,584,494 and charge same to account of The Prudential Insurance Company of America. Home Office: Newark, N. J. Paid Oct. 10,1903. Third National Bank, Sedalia, Mo. $135.54 J. H. Sullens, Supt. On the hack of said check were the following indorsements : her Martha A. S Crandall. mark J. F. Hendrick, Ass’t Supt. Pay to’the order of the Merchants’ National Bank St. Louis, Mo. Merchants’ Bank of Jefferson City, Mo. Gr. E. Lohman, Cash. Pay to the order of any hank or hanker. The Mechamos’ National Bank, Oct. 9, 1903, St. Louis, Mo. H. P. Hilliard, Cashier. [65] Pay to the order of any bank or banker. The Mechanics’ National Bank, Oct. 9, 1903. H. P. Hilliari), Cashier. The evidence disclosed that one, John P. Hendricks, was the local agent and designated as defendant’s district superintendent at Jefferson City, Mo.; that one Crandall, deceased, carried two policies on his life in defendant company, the same being in favor of his wife, Martha A. Crandall; that J. H. Sullens, whose office was at Sedalia, Missouri, was defendant’s district superintendent, and drew the check in suit payable to said Martha A. Crandall in payment of said policies; that said check was sent to said J. P. Hendricks at Jefferson City, Missouri, to be delivered to Mrs. Crandall who also lived at said last named city; that said Hendricks instead of delivering the check to Mrs. Crandall, forged her indorsement on it, took it to the plaintiff bank and on said forged indorsement obtained from plaintiff the amount in money called for by the check, and the same was placed to his credit by plaintiff; that Sullens, after having received information of the forgery, notified the Sedalia bank on which the check was drawn, and which had previously honored the check, of the forgery; and that the Sedalia bank demanded of plaintiff bank the return of the amount of the check and the same was repaid by it to the former. It was further shown, over the objection of defendant, that it was the habit of plaintiff bank to cash drafts for Hendricks. And it was further shown that Hendricks had no authority and it was not in the line of his duty to sign checks of the defendant. The cause was tried before the court sitting as a jury. The finding and judgment were for the plaintiff and defendant appealed. The theory of plaintiff is that it had the right to believe that the check was genuine when presented by [66] defendant’s agent'and the signature of the payee witnessed by him as such. The weakness of this position is that the act of said Hendricks in attesting the signature of the payee, Mrs. Crandall, was not an act performed in the line of his duty as defendant’s agent. Nor was he apparently acting within the scope of his authority as agent for his principal. It was an act foreign tó defendant’s business and one which could have been performed by any one who was a competent witness. And it is also insisted that there is no fault or negligence to be attributed to plaintiff in the transaction. We think otherwise. The plaintiff before it purchased the check was bound to know that the signature of the payee was genuine. Bank v. Bank, 109 Mo. App. 665. As the indorsement of Mrs. Crandall’s name on the back of the check was without her authority it created no privity of contract between the drawer and drawee. [Bank v. Bank, supra; Bank v. Whitman, 94 U. S. 343,] Defendant was not liable for the forgery of its agent, especially when not acting within the scope of his authority as such. The case is too plain for argument. Defendant questions the sufficiency of plaintiff’s statement, but as it has no case upon the merits it is useless to encumber this opinion further. Reversed. All concur.