Case ID: ala_162/html/0301-01.html
Source: Caselaw Access Project
Author: {"author": "\n      ANDERSON, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Morris, et al. v. 1st National Bank of Samson.
    
      Assumpsit.
    
    (Decided May 20, 1909.
    Rehearing denied June 30, 1909.
    50 South. 137.)
    1. Partnership; Liability of Firm to Third, Person. — Where checks were drawn on the bank account of the firm by the bookkeeper of the firm, under the direction of one of the partners, and such checks were paid by the bank, and constituted overdrafts, each member of the firm is liable to the bank on the checks although they were drawn for the individual debt of the partner at whose instance they were drawn, and though the other partners had instructed the bookkeeper to draw no checks except for firm purposes.
    2. Same; Liabilities; Dissolution. — Unless the bank had notice of the dissolution, the fact that the firm • had been dissolved when the check was drawn in the firm name by the bookkeeper at the instance of one of the partners on the bank with which the firm had been dealing, did not render the partners not liable to the bank which paid the check.
    3. Banks and Banking; Officers and Agent; Notice to Officer.— The fact that a bookkeeper of a firm knew of the dissolution of the firm because of being such bookkeeper, was not notice to the bank of the dissolution although the bookkeeper of the firm was also assistant cashier and bookkeeper of the bank.
    4. Partnership; Liability of Firm; Estoppel. — Where a partner directed the bookkeeper of the firm to draw a check of the firm to pay the individual debt of the partner, such partner was estopped to deny the bookkeeper’s authority as against the bank which paid the check.
    5. Usury; Estoppel to Assert. — Where the officers of a bank through its officers, authorizes one of the officers to lend money to a firm to which the officer belongs at the rate of 8 per cent., such officer is estopped from charging the bank as £or usury where he elected when dealing with himself to charge himself and his firm with a greater rate of interest than the bank officers authorized or required.
    ‘Appeal from Geneva Circuit Court,
    Heard before Hon. A. A. Pearce.
    Action by tbe First National Bank of Samson against J. J. Morris and W. T. Edge, late partners composing the firm of Samson Live Stock Company. Judgment for plaintiff, and defendants appeal.
    Affirmed.
    The action was on account and for money loaned. The pleas-were non assumpsit, nil debet, and set-off. The Samson Live Stock Company was a firm, composed of J. J. Morris and W. T. Edge. Griggs was the cashier and bookkeeper of the Samson- Live Stock Company during its existence, and is also assistant cashier and bookkeeper of the bank. J. J. Morris was one of the members of the firm of the Samson Live Stock Company, and during the years 1906 and 1907 was cashier of the bank. Under the arrangement between the two, checks were drawn by Griggs as the bookkeeper of the live stock company and paid by Griggs as -the assistant cashier and bookkeeper o.f the bank. The account '.is founded upon overdrafts composed of some of. these checks so drawn and paid. The defendant offered to show that the live stock company was not indebted to some of the parties in Avhose favor the check was draAvn, but that Edge individually Avas indebted to them, and these checks Avere drawn to pay his individual checks. The -court refused to permit-this evidence. • It Avas shoAvnby Griggs’ testimony, and not disputéd by Edge, that these checks Avere draAvn by Edge’s direction. Morris offered to testify that Griggs was instructed and author: ized to draw checks to pay all debts of the Samson Live Stock Company, but Avas' not authorized to draAv’ any check for-.any sum not owing by the Samson Live Stock Company. At the time, of the dissolution of the firm and the withdrawal of Morris therefrom, Griggs was, present and knew all about it. It is not made to appear from the record whether Morris was then connect;, ed with the bank or not.
    J. J. Morris, and Espy & Farmer, and. Tyson, Wilson & Martin, for appellants.
    Notice to Griggs of any matter within the scope of his authority was notice to the bank. — Everett v. U. S.,. 6 Port 166; Branch Bank v. Steele, 10 Ala. 916; Bir. T. Co. v. La. Nat. Bank, 99 Ala. 379; 3 A. & E. Ency. of Law, 186; Lee v. Iron B. Merc. Co., 147 Ala. 421; White v. King, 53 Ala. 162; 56 Ala. 177; 27 Ala. 336; 71 Ala. 240; 88 Ala. 583. The court erred in refusing to permit the defendant to testify that at the time, the check urns drawn and paid the Samson Live Stock Co., had dissolved, and that it owed said Edge nothing, and that Griggs knew .of said dissolution. — Bunoell v. Spring-field, 15 Ala. 273; Hurt v. Clark, 56 Ala. 91; Nall v. McIntyre, 31 Ala. 532 ; Chambers v. Seay, 87 Ala. 55. The affirmative charge should have been given for the defendant. — Fountain v. Ware, 56 Ala. 558; White v. Farris, 124 Ala. 507.
    W. O. Mtjlkey, and W. R. Chapman, for appellee.—
    Knoivledge acquired by Griggs Avhile acting as bookkeeper of defendant, and Avhile representing the. defendant could not be imputed to the bank even though Mr., Griggs was the instrument through which the checks were.paid when presented to the bank. — Traders I. Co. v. Letcher, 143 Ala. 400; C. of Gg. By. Co. v. Joseph, 125 Ála. 319; Patterson v. Inoin, 42 Ala. 40; 10 Cyc. 1053, and cáses there cited. Counsel discuss the other errors insisted on, but without citation of authority.
   ANDERSON, J.

The checks were drawn for the Samson Lire Stock Company, a firm composed of Morris and Edge, by Griggs, the bookkeeper of said firm, and who was also assistant cashier of the plaintiff bank, and upon the order and direction of one of the partners, Edge. It was therefore immaterial as to the instructions given Griggs by Morris, as between the firm and third persons, as Edge had as much authority to direct the bookkeeper as his copartner, Morris, and, when the checks were drawn upon the direction of one of the partners and were paid by the bank, they became a valid claim against the firm and each member thereof, regardless of the previous instructions from Morris to Griggs.

It was also immaterial that the firm had been dissolved when the last check was drawn and paid by the bank, unless the bank had notice of the dissolution, as it had been dealing with said firm, and the individual partners were liable for the debts contracted, even after dissolution, unless the bank had notice of said dissolution. True, the defendants proposed to show that Griggs had notice of the dissolution; but Griggs occupied a dual position, and the notice he may have acquired as bookkeeper of the defendants could not be imputed to the bank. — Traders’ Ins. Co. v. Letcher, 143 Ala. 400, 39 South. 271; Cen. Ry. of Ga. v. Joseph, 125 Ala. 319, 28 South. 35; Patterson v. Irvin, 142 Ala. 401, 38 South. 121. The defendants did not propose to prove that the hank had notice of the dissolution, or that Griggs got notice while acting for the bank. If he knew of the dissolution because of being bookkeeper for the defendants, notice thus acquired was not binding on the hank. To have put the trial court in error, defendants should have proposed to show that the bank, or that Griggs, as agent of the bank, had notice of the dissolution, as notice to Griggs, who was also bookkeeper of the defendants, was not of itself sufficient to charge the bank with notice. Nor can the defendants complain of not letting Morris testify that the officers of the bank authorized him to lend the money to the stock company at 8 per cent., as that would exonerate the bank from responsibility for the usurious feature of the transaction, inasmuch as Morris was dealing with himself, and, if he saw fit to charge himself or his firm with a greater interest than the officers authorized or required, he is estopped from charging the hank with usury. Not only did Morris have the authority, as a partner, to bind or estop the firm, but Edge was also estopped from questioning Griggs’ authority to draw the checks in question, as they were drawn at his instance.

The judgment of the circuit court is affirmed.

Affirmed.

. Dowdell, C. J., and McClellan and Sayre, JJ., concur.