Gustin-Bacon Manufacturing Co. v. First National Bank

Mr. Justice Cartwright delivered the opinion of the court: The court allowed a writ of certiorari to obtain a review of the record of a judgment of the Appellate Court for the First District affirming a judgment recovered in the municipal court of Chicago by the Gustin-Bacon Manufacturing Company, defendant in error, against the First National Bank of Englewood, plaintiff in error, for the amount of a check drawn by the defendant in error on the New England National Bank of Kansas City, Missouri, payable to the order of John Lord’s Sons and collected by the plaintiff in error under a forged indorsement of the name of the payee. Harry Lord and Charles Lord were partners under the name of John Lord’s Sons, engaged in the business of manufacturing and selling cotton and woolen waste, with their principal office in Philadelphia and a branch office in Chicago at 939 West VanBuren street. H. W. Melvin was in charge of the Chicago office and Walter J. Riddle was employed as a solicitor and clerk in the office. Riddle secured an order from the plaintiff to John Lord’s Sons for a carload of cotton waste, which was shipped to the plaintiff at its place of business in Kansas City, Missouri. The car of waste was rejected by the plaintiff and was returned to John Lord’s Sons at their Chicago office, placed in a warehouse and re-sold by Melvin to other parties. Notice that the car of waste had been rejected was received at the Chicago office, and shortly afterward a check of the plaintiff dated October 10, 1919, for $2175.92, the price of the carload of waste, was also received. Sending the check was evidently due to some mistake or misunderstanding, and Melvin told Riddle that the plaintiff must have sent it before the refusal to accept the waste, and directed him to send the check right on to John Lord’s Sons at Philadelphia with the notice of the rejection. John Lord’s Sons had no bank account in Chicago and checks received at the Chicago office were mailed to them at Philadelphia. The check was put with the other checks to be mailed, to be sent out that day. Riddle took the check and instead of forwarding it as directed, indorsed it with the name of John Lord’s Sons and wrote his own name, W. J. Riddle, under the indorsement of the payee’s name. He deposited the check with the defendant, the First National Bank of Englewood, which received it for collection for his personal account. The defendant forwarded the check to Kansas City, where it was paid through the clearing house, and the defendant then credited the amount to Riddle’s account. Riddle checked out the proceeds with the exception of $18.54. He had no authority to indorse checks for John Lord’s Sons and his indorsement was a forgery. The facts as above stated have been conclusively settled by the judgment of the Appellate Court and only questions of law are open to review by this court. The trial was before the court without a jury, and the abstract shows a motion of the defendant, at the close of the evidence for the plaintiff, to exclude all the testimony of the plaintiff from the record, to enter a finding in favor of the defendant and to dismiss the suit, but the motion was not renewed at the close of all the evidence and the refusal is not subject to review. The abstract also shows motions for a new trial and in arrest of judgment and twelve propositions of law submitted to the trial court by the defendant, the first and fourth of which were held to be the law and the others refused, but there is no allusion in the brief and argument to any ruling of the court or the refusal to hold any proposition of law submitted. The brief contains fifteen points, with authorities in support of each, and the argument, as before stated, is general and very largely on questions of fact, such as that the charge of the amount of the check to the account of the plaintiff was due to its own negligence; that the plaintiff, believing it was dealing with a Chicago concern, intended that concern as the payee of the check; that the measure of the damages was the value of the check, which was worthless because the consideration had failed. These questions, considered as questions of fact, are beyond the jurisdiction of this court, but everything worthy of notice that can be regarded as a question of law will be considered. One argument against the judgment is, the plaintiff, being the maker of the check, was not the owner because no one but the payee could sue on or collect it, and therefore it was not property and trover would not lie. It does not appear that this question was presented in any manner to the trial court, but no name was given to the action in the municipal court and it is immaterial what it was called. The prcecipe for the summons was in a first-class case in contract, and the second amended statement of claim on which the case was tried recited the facts showing a good cause of action, and stating that the defendant converted the check, and the amount of money represented by it, for its own use and benefit. The sufficiency of the statement of claim was not questioned and could not be, because it showed that the defendant had procured $2175.92 of the money of the plaintiff on deposit in the Kansas City bank by means of a forged indorsement. If the plaintiff wás negligent in not sooner discovering that the defendant had collected the amount of the check, that fact was no defense. (Hamlin’s Wizard Oil Co. v. United States Express Co. 265 Ill. 156.) The defendant took the risk of the authority of Riddle to indorse the check and appropriate the proceeds. (Jackson Paper Manf. Co. v. Commercial Nat. Bank, 199 Ill. 151; Foster v. Graf, 287 id. 559.) The defendant dealt with Riddle at its peril, and was bound to ascertain not only the fact of his agency but the extent of his authority, and there was an entire failure to make proof that he had any authority. Without any evidence whatever of authority of Riddle the defendant accepted and collected the check and gave the proceeds to Riddle. There was no defense to the suit. The judgment of the Appellate Court is affirmed. Judgment affirmed.