Court Opinion

ID: 4006777
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:07:36.411839+00
Date Added: 2024-06-11T07:44:38.331303
License: Public Domain

The sufficiency of the notice has not been questioned by demurrer or otherwise. The sole contention of defendants is that plaintiff was not entitled to recover without proving the alleged agency of Hazlett  Burt, and that they were authorized as agents of the makers to negotiate the note and receive the proceeds. This argument is wholly untenable. As stated in the opinion, plaintiff, by producing the note, established prima facie right to recover, in the absence of a plea of non estfactum, or its equivalent, putting in issue the validity of the instrument. Merchants Bank  Trust Company v. Peoples Bank ofKeyser, 99 W. Va. 544, 130 S.E. 142. Defendants *Page 796 
have fallen into error by failing to distinguish between an action on a negotiable instrument and one on simple contract with an alleged agent. In the latter case, the foundation of the action depends upon proof of the agency. Conners v.Gaskins, (Fla.) 90 So. 379, cited in the note of dissent by Judge Kenna, is illustrative. They have also confused this case with one involving the transfer of negotiable paper by a known agent who appropriates the proceeds to his own use. The transferee in the latter case assumes the obligation of accounting to the principal. Bowles Co. v. Clark, 59 Wash. 336,109 P. 812, 31 L.R.A. (N.S.) 613, cited by counsel for defendants, states the rule as applied to the facts in the case, thus: "One who receives a check drawn to his own order from the agent of the drawer, who is not known to him, assumes the obligation of accounting to the drawer for the proceeds." The court based this holding upon the finding that the transferee was put upon notice, by the check being payable to him, that the transferor was the agent of the drawer. The same rule is observed and applied in Bank v. Ohio Valley FurnitureCompany, 57 W. Va. 625, 50 S.E. 880, and numerous other authorities, cited in the dissenting note, in which a known agency existed. It has no application in a case like this, in which no agency is shown. The pronouncement in the Ohio ValleyFurniture Company case, follows: "An agent having in his possession, for discount, sale, safekeeping or other purpose, on behalf of his principal, bills, notes or other paper belonging to his principal, indorsed in blank, or in such other form as to permit transfer of title thereto by mere delivery, may be regarded, by strangers having no notice of the agency or the capacity in which such paper is held, as the owner thereof, and dealt with accordingly in respect to it. But, if in such case, the stranger has notice of the fact of agency, his dealings and transactions, respecting the paper, are governed by the law of agency. He must regard the paper as the property of the principal and confine his dealings with the agent, concerning it, within the scope of the authority of the latter, actually or apparently conferred." Again, as demonstrated in the opinion, the proffered evidence that the makers had executed the note for the accommodation of Hazlett  Burt, and that the latter had negotiated it for their own benefit, was not a defense, but an admission of liability. *Page 797