Farmers & Merchants Bank v. Loyd

BLAND, P. J. The suit is on the following promissory note: “Piedmont, Mo., April 19, 1898. “In accordance with the dates below set out, we or either of us promise to pay to the order of Joseph Daniels, for value received, the sum of $84.90, with interest on each installment from the time of its maturity at the rate of eight per cent, per annum, as follows: On the fifteenth day of May, 1898 .............. $15.70 On the fifteenth day of June, 1898 .............. 15.80 On the fifteenth day of July, 1898 .............. 15.90 On the fifteenth day of August, 1898 ............ 16.00 On the fifteenth day of September, 1898 .......... 16.10 On the fifteenth day of October, 1898 ......... 5.40 Total............................. $84.90 (Signed) “Wm. Loyd, “S. R. Durham, Security, “Jos. E. Lindsay, Security.” Indorsed as follows: “Eor value received I assign the within note to Farmers •and Merchants Bank of Piedmont, Mo., notice and protest waived. “Joseph Daniels. “$5.00 paid 5-14, ’98 “$5.30 paid 6-16, ’98 “$5.50 paid 7-16, ’98 — 266 — “$5.50 paid 8-15,’98 “$5.50 paid 9-14, ’98.” The defendant Durham pleaded the following offset: “Now at this day comes the defendant, S. E. Durham, and answering for himself herein, admits the execution of the note sued on. “Further answering, and by way of counterclaim, defendant states that on the tenth day of July, 1894, he was the owner and in possession of a $1,000 stock certificate of the Phoenix Loan Association of St. Joseph, Missouri, which certificate was of the value of $131.65, and which sum could be received by the surrender and withdrawal of said certificate. That the defendant on,the tenth day of July, 1894, sold and assigned said certificate of stock to the plaintiff herein and for which the plaintiff agreed to pay him the sum of one hundred and thirty-one dollars and sixty-five cents in thirty days from the said date. “Defendant states that the plaintiff paid to him the sum of $65.14 on August 27, 1894, to apply on said sum, and that on the tenth day of July, 1896, the sum of $20 to apply on the same, and that the balance due therefor with the interest due thereon at the rate of six per cent has often been demanded but still remains due and unpaid. “Wherefore the defendant prays judgment for the balance due him as herein alleged and that the same be set off against plaintiff’s demand herein, and that defendant have judgment for the balance due him herein with costs of suit. “S. E. Durham, Defendant.” At the trial in the circuit court the issues were, by agreement of the parties, submitted to the judge who found for plaintiff and against the offset. Defendants appealed. The evidence is that Durham had a stock certificate of $1,000 in the Phoenix Loan Association of St. Joseph, Missouri, on which he had paid monthly assessments of five dol — 267 — lars for twenty-five consecutive months, and that on July 10, 1899, the withdrawal value of his certificate was $131.65. On the last-named date he assigned and transferred the certificate to the respondent bank at its withdrawal value and directed the cashier of the bank to apply $125 of the proceeds of the certificate, when collected, to the payment of his note held by the bank, and to place the balance on deposit to his credit. The cashier of the bank, W. C. Shields, forwarded the certificate to •the loan association at St. Joseph for collection. The agent of the association had failed to forward the last nine assessments paid by Durham, in consequence of which he, Durham, under the rules of the association was fined $21.50, and the withdrawal value of his certificate was by the association reduced to $84.64; from this the fine of $21.50 was deducted and the balance ($65.14) was forwarded to the bank, and by it entered as a credit on Durham’s note of $125. The bank refused to give any further credit to Durham on account of the stock certificate. Sometime afterwards, Shields paid Durham $20 on account of the fine the association had assessed against him for non-payment of dues. In the receipt book furnished Durham by the association, he was directed to pay his assessments to “W. C. Shields, Cashier.” Shields was the cashier of the bank and Durham made payment of all his assessments to him over the bank counter, and it was Shields as cashier' of the bank who negotiated the purchase of the stock certificate from Durham, after making a calculation of its withdrawal value, which calculation was correct to a cent, had all of the monthly assessments paid by Durham been forwarded to the association. There was a dispute on the trial as to whether the bank or Shields was the authorized agent of the association for the collection of assessments against the holders of its certificates of stock at Piedmont. The circuit judge evidently found that Shields was the duly authorized agent of the association, and — 268 — we think the greater weight of the evidence is that way. There was an effort made on the part of the bank to prove that the differences between it and Durham on account of the certificate of stock had been settled, but it utterly failed to prove any settlement of the matter. Defendants moved the court to declare the law as follows: “Instruction No. 1. The court sitting as a jury in the above-named cause, declares the law to be: that W. O. Shields being the cashier of the plaintiff bank, and having acted either as such cashier or individually as the agent and collector of the Phoenix Loan Association, and as such agent received and receipted for payments of the monthly dues made by defendant Durham, on the stock certificates, which the defendant Durham sold or transferred to the plaintiff bank; said sale being made with said Shields as cashier of said bank, then the knowledge of the said Shields that all payments made on the stock certificate by defendant Durham had not been remitted by the said Shields to the Pheonix Loan Association, was notice to the plaintiff bank, and the plaintiff bank can not avoid the payment of the contract price agreed upon for the purchase of said stock certificate, even though the plaintiff did not realize on the surrender and cancellation of said stock certificate the amount it agreed to pay therefor; the deficiency having been occasioned by the failure of the said Shields to remit promptly the payments, as made to him by defendant Durham. “Instruction No. 2. The court sitting as a jury, declares the law to be that it makes no difference, for the purpose of determining the issues in this ease, whether the Farmers and Merchants Bank or W. O. Shields were the agents of the Phoenix Loan Association and as such agent collected the monthly dues upon the stock certificate which was sold to the plaintiff, Farmers and Merchants Bank, by the defendant Durham ; the said payments having been made, the stock was worth — 269 — at the time of its sale the sum of $131.65, the plaintiff not having returned or offered to return to the defendant Durham the said certificate, then the defendant Durham is entitled to a judgment on his counterclaim for the amount remaining unpaid, with six per cent interest thereon from August 10, 1894.” Which the court refused; no other declarations of law were asked or given. I. At the time Durham sold and assigned his certificate of stock to the bank, he was entirely ignorant of the fact that any of his assessments had not been forwarded to the association. Neither had the bank any knowledge or information on the subject, unless knowledge of the fact can be imputed to it through its cashier, Shields. In making the purchase of the certificate of stock, Shields acted for the bank within the scope of his authority and the knowledge that Shields had of the condition of the stock must be imputed to the bank. Stone Cutter Bank v. Myers, 64 Mo. App. 527; Withers v. Bank, 67 Mo. App. 115; Latimer v. Equitable Loan & Inv. Ass’n, 78 Mo. App. 463. The bank, having purchased the certificate with the secret knowledge that the assessments had not been forwarded to the association, took the certificate at its own risk to make good to the association, the delayed assessments and to realize the full withdrawal value of the certificate. Instruction No. 1 should have been given. II. Instruction No. 2, though verbally inaccurate, in the light of the fact that either the bank or Shields was the agent of the company, should have been given. It is obvious that Durham was entitled to recover of the association the full withdrawal value of his stock. He paid all of his assessments to the agent of the association and the very agent he was directed by his receipt book to make payments to, to-wit, Shields. It was the plain duty of the bank, having notice of the payments either to force full payment from the association, or to restore — 270 — the certificate unimpaired to Durham, neither of which it did or offered to do. The judgment is reversed and the cause remanded. All concur.