The record which the writ brings here is that of the Kansas City Court of Appeals in W.J. Howey Co., a corporation, v. A.B. Cole, Deputy Commissioner of Finance, and McGirk State Bank, in an action on a certificate of deposit issued by the cashier of the McGirk State Bank. The trial court sustained a demurrer to the evidence, and W.J. Howey Co. appealed. The Court of Appeals reversed the judgment and remanded the cause. Relators in this proceeding contend that court's opinion conflicts with certain decisions of this court.
In its opinion the Court of Appeals stated the record showed that the certificate of deposit in question was dated August 29, 1921, was for the sum of $1300, and was "executed in favor of `Mark V. Packard, trustee' and `payable to the order of himself in current funds on the return of this certificate properly indorsed six months after date with three per cent interest per annum' and signed C.T. Moore, cashier;'" that the certificate "was issued by C.T. Moore, cashier of defendant bank, in exchange for a note in the sum of $2,000, made by D. Mondell and secured by stock of a motor car company. Before maturity the certificate of deposit was indorsed by `Mark V. Packard, trustee' to the plaintiff, and plaintiff became its purchaser in `due course.' At the time of the institution of this suit the bank was insolvent and in the hands of defendant Cole, Special Deputy Commissioner of Finance of the State." The court further stated that the "evidence with relation to the authority
of the cashier shows that Moore was one of the board of directors and was the manager of the bank. None of the other officers or directors of the bank issued certificates of deposit or cashier's checks. Moore received all of the deposits of the bank and had the custody of the bank's books. Moore was the executive officer, the manager, the alter ego of the bank, and there is no question he had power to issue certificates of deposit without the consent of the board of directors [citing authorities] unless prohibited by" Section 11752, Revised Statutes 1919.
With respect to the circumstances under which the certificate was purchased by W.J. Howey Co., the court stated the evidence showed that Packard "was in Chicago when he negotiated the certificate to plaintiff; that Packard called at plaintiff's office to buy [sell?] the certificate of deposit" in September, 1921, and "plaintiff paid $1000 in cash and agreed to remit the $300 balance at a later date" but this balance had not been paid at the time of suit brought. "There is no evidence whatever in the record tending to show that Packard was a trustee for any one, and the mere fact that Packard told plaintiff he was `short of funds' does not show that he was not then on a mission of the trust estate, if there was one, and that the money was not needed to pay Packard's expenses in connection with some matter connected with such estate. As before stated, there is no evidence as to who the beneficiary was, and, of course, the beneficiary is not making any claim."
Relators contend the opinion is in conflict with decisions of this court in holding that (1) certificates of deposit are not within Section 11752; (2) the fact the certificate was payable to Mark V. Packard, trustee, did not, in the circumstances, defeat the sale to W.J. Howey Co.; and (3) a certificate payable in "current funds" is negotiable.
I. The Court of Appeals held that Section 11752, Revised Statutes 1919, did not apply to certificates of deposit, and that these could be issued by one in the position
Moore held without specific authorization by the board of directors. The statute provides, among otherBill Payable: things, that "no bills payable shall be made, andNo Conflict. no bills shall be rediscounted by the bank, except with the consent of the board of directors," with an exception not pertinent to this case. The Court of Appeals held that certificates of deposit did not come within the words "bills payable" in the sense in which they are used in the quoted statutory provision. It is contended by relators that this ruling is in conflict with Union National Bank v. Lyons, 220 Mo. l.c. 554. The argument in the brief is that a certificate of deposit is held in many states "to be, in substance, a promissory note and governed in most cases by the same general rule." Decisions from other jurisdictions and text-books are cited on this point, but no decision of this court is among them. It is then argued that if a certificate "is the promissory note of the bank, then it is a bill payable" and if issued without the board's specific authority it comes within Section 11752 and is void. The argument does not show conflict. The Court of Appeals did not hold that bills payable issued by the cashier without the requisite authority were valid. Its argument concedes that anything issued by a Missouri bank which comes within the quoted language of that section and is not executed under the required authority, is void, and cites and follows the Lyons case on that point. What the court did hold was that a certificate of deposit was not a bill payable in the sense of that section and, therefore, was not governed by it. This question was not decided in the Lyons case or in any other decision of this court so far as the briefs show or additional examination discloses. In these circumstances there can be no conflict with the Lyons case. The question decided by the Court of Appeals is not a sham question. It is one of some difficulty, and there is much to be said for the conclusion the court reached. In any event, there was no conflict with the decision cited, because the question the Court of Appeals decided was not in that case,
and the correctness of the decision in that case is not denied, but affirmed, by the Court of Appeals.
II. It was argued in the Court of Appeals that since the certificate was made payable to "Mark V. Packard, trustee," he had no authority to sell the certificate to raise money for his individual use; that the word "trustee" was noticeTrustee For that Packard did not own the certificate. It isIndividual urged that the holding of the Court of Appeals onUse. this point is in conflict with the decision in Turner v. Hoyle, 95 Mo. l.c. 343. In discussing that decision counsel concede it holds that one who, in good faith, buys from a trustee professing to act for and on behalf of the trust estate, will get good title and is not concerned with the trustee's disposition of the proceeds (Sec. 13426, R.S. 1919), but rely upon the holding that this conceded rule does not apply when "the trustee is not professing to act for and on behalf of the trust estate, or the third party is not dealing with him in good faith, believing that the trustee is making the sale or getting the advance on behalf of the trust estate." It is argued that "the certificate was payable to trustee, and Howey says Packard was short of funds. It is further significant that so far as the record shows, Howey had never met Packard more than a few hours before the transaction between them, and further that $300 was withheld." The relators' position necessarily is that the evidence conclusively established facts which bring the transaction within the excerpt quoted above from Turner v. Hoyle. The answers which the Court of Appeals makes to this argument are set out in the statement. That court did not question the rule relied upon. It held, in effect, that the peculiar facts of this case left the question to the jury, at most. No case is cited with which it is contended this specific holding conflicts. Its holding, in legal effect, is that the evidence did not
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The record which the writ brings here is that of the Kansas City Court of Appeals in W.J. Howey Co., a corporation, v. A.B. Cole, Deputy Commissioner of Finance, and McGirk State Bank, in an action on a certificate of deposit issued by the cashier of the McGirk State Bank. The trial court sustained a demurrer to the evidence, and W.J. Howey Co. appealed. The Court of Appeals reversed the judgment and remanded the cause. Relators in this proceeding contend that court's opinion conflicts with certain decisions of this court.
In its opinion the Court of Appeals stated the record showed that the certificate of deposit in question was dated August 29, 1921, was for the sum of $1300, and was "executed in favor of `Mark V. Packard, trustee' and `payable to the order of himself in current funds on the return of this certificate properly indorsed six months after date with three per cent interest per annum' and signed C.T. Moore, cashier;'" that the certificate "was issued by C.T. Moore, cashier of defendant bank, in exchange for a note in the sum of $2,000, made by D. Mondell and secured by stock of a motor car company. Before maturity the certificate of deposit was indorsed by `Mark V. Packard, trustee' to the plaintiff, and plaintiff became its purchaser in `due course.' At the time of the institution of this suit the bank was insolvent and in the hands of defendant Cole, Special Deputy Commissioner of Finance of the State." The court further stated that the "evidence with relation to the authority
of the cashier shows that Moore was one of the board of directors and was the manager of the bank. None of the other officers or directors of the bank issued certificates of deposit or cashier's checks. Moore received all of the deposits of the bank and had the custody of the bank's books. Moore was the executive officer, the manager, the alter ego of the bank, and there is no question he had power to issue certificates of deposit without the consent of the board of directors [citing authorities] unless prohibited by" Section 11752, Revised Statutes 1919.
With respect to the circumstances under which the certificate was purchased by W.J. Howey Co., the court stated the evidence showed that Packard "was in Chicago when he negotiated the certificate to plaintiff; that Packard called at plaintiff's office to buy [sell?] the certificate of deposit" in September, 1921, and "plaintiff paid $1000 in cash and agreed to remit the $300 balance at a later date" but this balance had not been paid at the time of suit brought. "There is no evidence whatever in the record tending to show that Packard was a trustee for any one, and the mere fact that Packard told plaintiff he was `short of funds' does not show that he was not then on a mission of the trust estate, if there was one, and that the money was not needed to pay Packard's expenses in connection with some matter connected with such estate. As before stated, there is no evidence as to who the beneficiary was, and, of course, the beneficiary is not making any claim."
Relators contend the opinion is in conflict with decisions of this court in holding that (1) certificates of deposit are not within Section 11752; (2) the fact the certificate was payable to Mark V. Packard, trustee, did not, in the circumstances, defeat the sale to W.J. Howey Co.; and (3) a certificate payable in "current funds" is negotiable.
I. The Court of Appeals held that Section 11752, Revised Statutes 1919, did not apply to certificates of deposit, and that these could be issued by one in the position
Moore held without specific authorization by the board of directors. The statute provides, among otherBill Payable: things, that "no bills payable shall be made, andNo Conflict. no bills shall be rediscounted by the bank, except with the consent of the board of directors," with an exception not pertinent to this case. The Court of Appeals held that certificates of deposit did not come within the words "bills payable" in the sense in which they are used in the quoted statutory provision. It is contended by relators that this ruling is in conflict with Union National Bank v. Lyons, 220 Mo. l.c. 554. The argument in the brief is that a certificate of deposit is held in many states "to be, in substance, a promissory note and governed in most cases by the same general rule." Decisions from other jurisdictions and text-books are cited on this point, but no decision of this court is among them. It is then argued that if a certificate "is the promissory note of the bank, then it is a bill payable" and if issued without the board's specific authority it comes within Section 11752 and is void. The argument does not show conflict. The Court of Appeals did not hold that bills payable issued by the cashier without the requisite authority were valid. Its argument concedes that anything issued by a Missouri bank which comes within the quoted language of that section and is not executed under the required authority, is void, and cites and follows the Lyons case on that point. What the court did hold was that a certificate of deposit was not a bill payable in the sense of that section and, therefore, was not governed by it. This question was not decided in the Lyons case or in any other decision of this court so far as the briefs show or additional examination discloses. In these circumstances there can be no conflict with the Lyons case. The question decided by the Court of Appeals is not a sham question. It is one of some difficulty, and there is much to be said for the conclusion the court reached. In any event, there was no conflict with the decision cited, because the question the Court of Appeals decided was not in that case,
and the correctness of the decision in that case is not denied, but affirmed, by the Court of Appeals.
II. It was argued in the Court of Appeals that since the certificate was made payable to "Mark V. Packard, trustee," he had no authority to sell the certificate to raise money for his individual use; that the word "trustee" was noticeTrustee For that Packard did not own the certificate. It isIndividual urged that the holding of the Court of Appeals onUse. this point is in conflict with the decision in Turner v. Hoyle, 95 Mo. l.c. 343. In discussing that decision counsel concede it holds that one who, in good faith, buys from a trustee professing to act for and on behalf of the trust estate, will get good title and is not concerned with the trustee's disposition of the proceeds (Sec. 13426, R.S. 1919), but rely upon the holding that this conceded rule does not apply when "the trustee is not professing to act for and on behalf of the trust estate, or the third party is not dealing with him in good faith, believing that the trustee is making the sale or getting the advance on behalf of the trust estate." It is argued that "the certificate was payable to trustee, and Howey says Packard was short of funds. It is further significant that so far as the record shows, Howey had never met Packard more than a few hours before the transaction between them, and further that $300 was withheld." The relators' position necessarily is that the evidence conclusively established facts which bring the transaction within the excerpt quoted above from Turner v. Hoyle. The answers which the Court of Appeals makes to this argument are set out in the statement. That court did not question the rule relied upon. It held, in effect, that the peculiar facts of this case left the question to the jury, at most. No case is cited with which it is contended this specific holding conflicts. Its holding, in legal effect, is that the evidence did notconclusively show that the rule relators invoke was applicable as a matter of law. Support for this view is found in Sections 811, 817, 818, 830, 837, 838, 842 and
843, Revised Statutes 1919, of the Negotiable Instruments Act. There is no conflict.
III. It is insisted that since the certificate was payable "in current funds" it was non-negotiable and, therefore, let in certain defenses. It is said the holding of the Court of Appeals to the contrary conflicts with the decision of this court in Farwell v. Kennett, 7 Mo. 595. In that case an instrument in the form of a promissory note was made payable "in currency." The court held that this was not a promise to pay in "money in specie" and was non-negotiable. The case was well decided at that time. Then there were many kinds of State currency of varying values. The court held that it would take judicial notice "in what light the medium or subject-matter of payment of a note or bill is regarded in common understanding. . . . At the date of this bill, currency was not regarded as cash by the community. In framing their notes and bills, the word was adopted with the express view of preventing a demand for cash or specie. The value of currency was below the specie standard and fluctuating, receding from and advancing to the value of the specie. The word currency was introduced in the sense in which it is understood after we were afflicted with a depreciated currency and to prevent a demand for lawful money. Experience has taught us that there is a wide difference between the currency contemplated by law and the actual currency." It is clear this decision no longer has force. The depreciated currency to which the court then referred has disappeared. The would now means anything in general, lawful use as money and accepted as such without discount. The cases are practically all the same way. In Millikan v. Security Trust Co., 187 Ind. 307, the Supreme Court of Indiana had before it the question decided by the Court of Appeals in this case, and held the same way. It said:
"Beginning with the issue of United States Treasury notes, declared to have the quality of legal tender, it has been the practice of drawers of bills of exchange
and makers of promissory notes to indicate payment in gold or silver or such notes, and from that time the terms `current funds' and `currency' have been used to designate any of these, all being current and declared by statute to be legal tender. The better rule now seems to be that instruments of the kind in question, payable in `current funds' or in `currency' are payable in money. [Citing decisions.] We therefore hold that this certificate of deposit is payable in money and is negotiable as an inland bill of exchange."
In addition, the statute (Sec. 793, R.S. 1919) specifically provides that: "The validity and negotiable character of an instrument are not affected by the fact that (it); . . . (5) designates a particular kind of current money in which the payment is to be made." The Farwell case was well enough in its time, but itself is direct authority for holding that under present and changed conditions the fact that an instrument is payable in "current funds" is not enough to render it non-negotiable, and in that particular it agrees with practically all the authorities, as the case just cited and others in the brief show. There is no conflict in this respect.
Our writ is quashed.