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(199 Mo. App. 491)
FARMERS’ SAVINGS BANK OF WEST
PLAINS V. AMERICAN TRUST CO.
OF WARRENSBURG. (No. 12858.)
(Kansas City Court of Appeals. Missouri.
May 20, 1918.)

1. BANKS AND BANKING G->145—CERTIFICATION OF CHECK-FRAUD. Where a bank is induced by fraud to certify the check of a depositor in an amount in excess of his deposit, it may countermand payment, unless the rights of other parties have interVened. 2. BANKS AND BANKING 3-140(3)—UNDERTAKING TO PAY CHECK—COUNTERMAND. Where a bank is induced by fraud to assume to pay check that it does not certify, it may countermand its action. 3. BANKS AND BANKING 3:175(3)—KITING CHECKS-KNOWLEDGE—EVIDENCE. In a suit on checks drawn by a depositor in defendant bank in favor of a depositor in plaintiff bank and by the payee deposited in plaintiff bank, and on which the drawee bank refused payment and erased the word “Paid” from the two checks, held, on the evidence, that the jury might find that plaintiff bank knew that the drawer and payee had been kiting checks, and that the defendant bank had no funds of the drawer other than the worthless checks of the payee. 4. BANKS AND BANKING 3:175(4)-ACTION ON CHECKS—INSTRUCTION. In such case an instruction that, if the defendant bank in, receiving the two checks held them for more than 24 hours, without the consent of plaintiff bank, without returning them, its conduct constituted an acceptance and made it liable for the amount of the checks modified by adding the condition, unless the preponderance of the evidence showed that defendant was not liable on the ground of fraud, was not error". 5. TRIAL (3:2260(1)-REQUESTED INSTRUCTION —GIVEN INSTRUCTION. In such action the refusal to give plaintiff's requested instruction, was not error, where the court, on its own motion, gave the instruction in substantially the same form. 6. BANKS AND BANKING 3:175(4)-KITING CHECKS-KNOWLEDGE-EVIDENCE. In such action evidence held to make it a question for the jury, as to whether the defendant bank knew that the checks were being kited, and hence did not rely upon the failure of the plaintiff bank to disclose all the facts. 7. TRIAL S->253(1)—INSTRUCTIONS—ISSUES. Instructions ignoring an issue are erroneous.

Appeal from Circuit Court, Pettis County; H. B. Shain, Judge.

Action by the Farmers' Savings Bank of West Plains, Mo., against the American Trust Company of Warrensburg, Mo. Judgment for defendant, and plaintiff appeals. Reversed, and cause remanded.

H. D. Green and Will H. D. Green, both of West Plains, Geo. W. Barnett, of Sedalia, and M. E. Morrow, Of West Plains, for appellant. Nick M. Bradley, of Warrensburg, and Geo. F. Longan, of Sedalia, for respondent.

BLAND, J. This is a suit on two checks drawn by One Burton On the defendant in favor of one Workman. The verdict and judgment was in favor of the defendant, and

plaintiff has appealed. The facts show that from January, 1915, to August, 1915. Burton and Workman were engaged in the cattle business at West Plains, Mo., that Workman was a depositor of the plaintiff, or the West Plains bank, and Burton a depositor of the defendant, or the Warrensburg bank, and that during that time what was described in the evidence as a “kite” was going on between Burton and Workman. For convenience plaintiff will be referred to as the West Plains bank, and defendant as the Warrensburg bank. The evidence ShoWS that the West Plains bank had a correspondent in the city of St. Louis through which it made out of town collections, and that the Warrensburg bank had a correspondent in Kansas City through which its Out of town collections were made. The evidence ShoWS that the “kiting” was carried On as follows: Workman and Burton desiring to obtain a credit in favor of the former in the West Plains bank, the latter would draw a check Or checks On the Warrensburg bank in favor of Workman, who would deposit it or them to his credit in the West Plains bank. It Would take three Or four days after the check Was drawn for it to reach the Warrensburg bank for payment, and in the meantime, in Order to Show a Credit in the Warrensburg bank in favor of Burton sufficient to take care of Workman’s check, Workman would draw a check or checks in favor of Burton On the West Plains bank. These latter checks would be deposited in the Warrensburg bank before Burton's check reached it. As before stated, this system of “kiting” had been in progress from January, 1915, to August, 1915, and during this time something like $600,000 in checks had passed between the two banks. It was the understanding between Burton and the Warrensburg bank that the former should not be permitted to overdraw his account, so Burton would give the Warrensburg bank checks On the West Plains bank signed by Workman with the amount left blank, So that the Warrensburg bank might fill in the necessary amount to cover any of Burton’s checks that came in. The Secretary of the Warrensburg bank testified that he knew nothing Of the financial Standing of Workman, but he knew that Burton, who was a resident of Warrensburg, had no property which could be reached by execution, that he had done business with Burton Once before, and that he had no capital then. Neither Burton nor Workman had any money in either of these banks except these “kited” Or fraudulent checks. During the latter part of July, on account of the enormous number of checks coming through the West Plains bank, its president began to Suspect that there was a “kite” in existence between Burton and WOrkman. On August 1st the bank examiner came into the West Plains bank and told its president that there was a “kite” going on. On August 5th Workman deposited the two checks sued upon in the West Plains bank, which were drawn on the Warrensburg bank and were signed by Burton; One in the Sum of $2,748.50, and the other in the sum of $4,500. The evidence is conflicting as to whether these checks were taken by the West Plains bank for collection or as a deposit to Workman's account. The West Plains bank, following its usual course, Sent these checks to its St. Louis correspondent, who in turn, on August 7th, forwarded the same to the Warrensburg bank. The checks were received by the president of the latter early on the morning of August 9, 1915. Upon receipt of these checks the president of the Warrensburg bank examined Burton’s account, and found that, on account of various checks of Workman that Burton had deposited and which were on their Way to the West Plains bank for payment, Burton had an apparent credit sufficient to meet the amount of these checks, and the president of the Warrensburg bank marked these tWO CheckS “Paid,” and drew a draft for their amount upon its - correspondent in Kansas City. Shortly thereafter the correspondent in St. Louis of the West Plains bank, at the request of the latter, called up the Warrensburg bank Over the long-distance telephone and asked it if these two checks had been paid, and its president replied that they had. Within an hour or two thereafter a bank examiner came into the Warrensburg bank and informed its president that he had been sent there to investigate a “kite” that had been going on between Burton and Workman. The president and secretary of the Warrensburg bank testified that this Was the first they knew Of any “kite” existing between said parties. . After the president of the Warrensburg bank had talked to the bank examiner the former Called up the West Plains bank and asked it if it did not have some checks on the Warrensburg bank “that had been sent in transit” (meaning checks drawn by Workman in faVOr Of Burton On the West PlainS bank and deposited in the Warrensburg bank, upon which the apparent credit described in the Warrensburg bank was based). The West Plains bank replied that it had the checks and would refuse to pay them, and the president of the Warrensburg bank then Stated to the West Plains bank that it would refuse to pay the two checks involved in this Suit and would notify the correspondent in St. Louis of the West Plains bank to this effect, which was done by long-distance telephone. The correspondent of the West Plains bank was also notified that payment would be stopped upon the draft drawn. On the Kansas City correspondent of the Warrensburg bank, which was done, and the Word “Paid” was erased from the two checks mentioned. [1, 2] Plaintiff's first point is that the court should have given its instruction in the na

ture of a peremptory instruction to find for plaintiff. In this connection plaintiff urges that the Warrensburg bank's acceptance of the two checks Sued on Was equivalent to a Certification. Of the Checks and amounted to the same as an acceptance of an inland bill of exchange, and it became unconditionally bound to pay said checks, and that such acceptance was irrevocable. This contention is not well taken, for the reason that, where a bank is induced by fraud to certify the check of a depositor for an amount in excess of his deposit, it may countermand payment unless the rights of other parties have interVened (5 R. C. L. 526), and, Of course, the Same rule obtains where the bank has aSSumed to pay a check that it does not certify and is in a position to countermand its action, aS in this case. [3] The defense of fraud Was tried On the theory that, if the Warrensburg bank had no funds belonging to Burton in its bank With which to pay the checks in question other than the WorthleSS checks of Workman, and that the West Plains bank knew that Said worthless checks were held by the Warrensburg bank and knew that the Warrensburg bank relied upon said checks being good, and knew that Burton had no other funds except the WOrthleSS WOrkman Checks in the Warrensburg bank With Which to meet the checks, and that the Warrensburg bank did not know of the fraudulent “kiting” at the time it marked “Paid” the two checks in suit, and that the West Plains bank induced the Warrensburg bank to accept and pay the checks by its fraudulent conduct, then plaintiff Was not entitled to recover. Defendant insists that there is no evidence that the West Plains bank knew the condition of Burton’s account in the Warrensburg bank; that, for all the West Plains bank might have knoWn, the WarrenSDurg’ bank had funds, in addition to the Workman checks, to satisfy the two checks in suit. There is no direct evidence that the West Plains bank knew that the Warrensburg bank had no funds of Burton except the fraudulent Workman checkS, but from the evidence Such knowledge may be inferred. The evidence shows that the West Plains bank knew that there Was a “kite” going on when it took the tWO checks in Suit; it knew that this had been going on for some time, and knew that more than $600,000 in checks had been drawn. If Burton had funds in the Warrensburg bank sufficient to cover the checks issued by him, Other than the WOrthleSS checks of WOrkman, Why Was it necessary that a “kite” be conducted? We think the jury could say that, as the West Plains bank knew there had been a “kite” in existence for some time, it also knew that the Warrensburg bank had no funds of Burton Other than the WOrthleSS CheckS Of Workman. [4] Plaintiff urges that the court erred in refusing to give its instruction No. 2, which told the jury that, if the Warrensburg bank, in receiving the two checks in controversy, held the Same for more than 24 hours. Without the consent of plaintiff, without returning the same, its conduct constituted an acCeptance and made it liable for the amount of the checks, and the verdict should be for the plaintiff. The court gave this instruction in a modified form by adding, “unless you find and believe from the preponderance of the evidence that the defendant is entitled to recover on the issue of fraud aS defined in other instructions.” It is plaintiff’s contention that section 10.107, R. S. 1909, providing that, if a drawee to whom a bill is delivered for acceptance refuses within 24 hours after delivery to return the bill accepted or not accepted to the holder, he will be deemed to have accepted the same, now applies to checks. See section 101.55, R. S. 1909. ASsuming that section 10107 does apply to checks, nevertheless we think the court did not commit error in reference to this matter. The president of the Warrensburg bank called up the West Plains bank and notified the latter that it had refused to pay the checks. Plaintiff's correspondent at St. Louis was also notified. There Was no demand made by the West Plains bank or any one for it for the return of the checks, and none of the parties could have been misled by the action of the Warrensburg bank in not returning them within 24 hours. It is doubtful if this statute applies at all in fraud CaSes such as this One. [5] Plaintiff contends that the court erred in refusing to give its instruction No. 6. This instruction told the jury that the West Plains bank was not presumed, in the absence of knowledge to the contrary, to knoW the condition of Burton's account in the Warrensburg bank, and that the West Plains bank had a right to rely upon the presumption that defendant did know the condition Of Such acCOunt unleSS they believed from the greater Weight Of the evidence that the West Plains bank as a matter of fact did know Of the COmdition Of Burton’S account in defendant bank. The court gave this instruction in substantially the same form in another instruction given On its OWn motion which applied the rule stated in Said refused inStruction to both bankS. Therefore We think that the court did not err in refusing plaintiff's instruction No. 6 and in giving an inStruction of its OWn on this question. [6, 7] Plaintiff urges that the court erred in giving instructions Nos. 9 and 10 on behalf of the defendant and in refusing to give instruction No. 4 asked by plaintiff. Instructions Nos. 9 and 10 permitted the jury to find for the defendant without finding that the Warrensburg bank was ignorant of the “kite,” and relied upon the failure of the West Plains bank to impart the knowledge

that a “kite” Was in existence. Plaintiff’s instruction No. 4 required the jury before it COuld return a Verdict for defendant to find that the West Plains bank by fraud induced the Warrensburg bank to pay the checks, and at the time knew that the Warrensburg bank had not sufficient funds on deposit to Burton’s credit, other than the worthless checks of Workman, to pay the checks forWarded, and that the West Plains bank through its officers knew that the Warrensburg bank was deceived by such worthless checks and believed them to be good. Tefendant contends that there is no evidence in the record that the Warrensburg bank knew that there Was a “kite” in existence, and that therefore it did rely upon the failure of the West Plains bank to disclose all the factS. We think there is Some evidence to go to the jury upon this point. The Warrensburg bank knew that Burton had no property and Was judgment proof. For Seven months he had been carrying on a large business with the Warrensburg bank, and the only funds that he had on deposit there at the time of these transactions were the CheckS Of Workman. AS already Stated, the transactions betWeen these tWO banks amounted to more than $600,000. The Warrensburg bank had an understanding with Burton that his accountS Should not be Overdrawn, and Burton gave to the Warrensburg bank Workman's checks drawn on the West Plains bank With the amountS left blank to be filled in by the Warrensburg bank in order to take Care of Burton’s checks drawn in favor of Workman. Under these circumstances it is difficult to understand why the Warrensburg bank did not at least become Suspicious of these transactions and make Some investigation to find out whether they were bona fide. In business transactions parties must not neglect to use their own judgment and discretion. Langdon v. Green, 49 Mo. 363; Hines v. Royce, 127 Mo. App. loc. cit. 723, 106 S. W. 1091. The court erred in ignoring this issue. Younger v. Hoge, 211 Mo. 444, 111 S. W. 20, 18 L. R. A. (N. S.) 94; Shearer & Martin v. Hill, 125 Mo. App. 375, 102 S. W. 673; Funding & Foundry Co. v. Heskett, 125 Mo. App. 516, 102 S. W. 1050; Hines v. Royce, Supra. The judgment is reversed, and the cause remanded. All concur.

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who remonstrated against speeding cannot be held guilty of negligence for failure to take further steps for his safety; the time being too short. 2. NEGLIGENCE &93(1) - IMPUTED NEGLIGENCE. Where plaintiff was riding at the invitation and by favor of the man who was driving the automobile, the negligence of the latter cannot be imputed to plaintiff. 3. HIGHWAYS @:183—IMPUTED NEGLIGENCE —INJURY TO GUEST. The rule that the negligence of the driver of an automobile cannot be imputed to a guest does not absolve the guest from the duty to use ordinary care. 4, HIGHWAYS @:175(1) - AUTOMOBILE ACCIDENT—INTERSECTION-KNOWLEDGE. Defendant driver of automobile, who in going out to a lake had passed over an intersection, was chargeable with notice thereof on his return trip over the same highway. . 5. TRIAL Q->296(3)—ERRONEOUS INSTRUCTION —CURE BY OTHER INSTRUCTIONS. In view of motor vehicle statute, making failure to observe the precautions therein required of motor vehicle drivers on the highway negligence per se, an instruction that plaintiff must prove that the automobile which collided with the one in which he was riding was negligently operated at a dangerous speed, or that it negligently failed to give warning as it approached the intersection, was not above criticism, in that it used the word “negligently”; but where other instructions clearly told the jury that the failure to do the things required by the statute was negligent, the jury was not misled. * 6. TRIAL (3:295(1)—INSTRUCTIONS—READING AS A WHOLE. Instructions constitute one charge, and should be read as a whole. 7. APPEAL AND ERROR Q->930(2)—VERDICTINSTRUCTIONS-PRESUMPTION. It will be assumed on appeal that the jury considered the instructions carefully and intelligently, and construed them reasonably. 8. TRIAL &->191(7) – INSTRUCTIONS–ASSUMING FACTS. An instruction that if plaintiff guest was negligent in directing or requesting defendant driver of automobile to speed up and pass the car ahead, and such negligence directly contributed to the injury, the verdict must be for defendants, was erroneous, in that it assumed that plaintiff did direct or request defendant to Speed up. 9. HIGHWAYS 6:172(1)—DEGREE OF CAREINSTRUCTIONS. An instruction that drivers of automobiles are required to exercise the highest degree of care that an ordinarily prudent person would is erroneous in view of Laws 1911, p. 330, § 12, subd. 9, reading “the highest degree of care of a very careful person.” 10. HIGHWAYS @:184(4) — CoILISION.—CoNTRYT:UTORY NEGLIGENCE–INSTRUCTIONs. An instruction that before plaintiff, a guest in an automobile, can recover it must appear that his injury was caused without any fault, neglect, or want of ordinary care or prudence on his part, in view of the statement in the first part of such instruction that plaintiff must exercise the highest degree of care and caution, failed to submit accurately issue whether plaintiff guest directed defendant driver of the automobile to speed up at an intersection.

11. APPEAL AND ERROR &432 – AFFIDAVIT FOR APPEAL—FILING. Under Rev. St. 1909, § 2040, requiring affidavit for appeal to be filed during the same term, appeal will not be denied, although affi

davit for appeal was filed after instead of before order allowing appeal; every step required having been taken by appellant within time required. Appeal from Circuit Court, Buchanan County; Frederick D. Fulkerson, Judge. “Not to be officially published.” Suit by Nathan E. Rappaport against W. E. Roberts and Others. Verdict for defendantS, and plaintiff appeals. Judgment reVersed, and cause remanded for new trial.

B. M. Achtenberg, of Kansas City, and Spencer & Landis, of St. Joseph, for appellant. John Muir, Robert A. Brown, A. Leonard Guitar, and Richard L. Douglas, all of St. Joseph, for respondents.

TRIMBLE, J. This is a suit to recover damages on account of personal injuries alleged to have been Sustained by reason of a Collision betWeen two automobiles at a certain crossroads in Buchanan county. The Suit Was brought jointly against the OWners and Operators of both automobiles. Plaintiff, at the invitation of the defendants W. E. and G. A. Roberts, was riding in their car; he being, in their opinion, a possible or prospective purchaser of a car, and they desiring to demonstrate the same in Order to Imake a Sale to him. The defendants Harold Schaefer and Effie Mittlebach were, respectively, the chauffeur and owner of the Other car. Upon a trial of the case the jury returned a verdict for defendants, and plaintiff has appealed.

The Roberts car was driven to plaintiff’s Store, where he and his children were taken aboard, and then, with W. E. Roberts at the wheel, the party drove to Lake Contrary over the highway known as Lake road. In going, they passed Over the intersection of said highway with Atchison road, at which point the Collision later took place on their return trip. Shortly after they started to return, plaintiff, Who Was in the rear Seat, exchanged places with One of his children and took the front Seat beside the driver. Lake road runs east and West and Atchison road runs north and South, so that on the return from Lake Contrary the Roberts car was going east on Lake road. Two persons, a man and a boy by the name Of Burnstein, Were also riding in the car in addition to plaintiff and his children. After leaving Take Contrary on the return trip, a Ford automobile, also returning from the lake, passed the car in which plaintiff was riding, and the two cars entered upon a race; the Roberts car endeavoring to pass the Ford and attaining, according to plaintiff's evidence, a speed of 30 or 35 miles per hour. There is a conflict in the evidence as to who suggested this race. The evidence of plaintiff and his children is that the Suggestion came from the Burnsteins and that plaintiff objected thereto, saying that it was not necessary to speed

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up, that there was a picnic, and they might run into something. (It seems that the employés of Swift & Co.'s packing plant were having an outing at the lake that day.) On the other hand, the evidence of Roberts and of the elder Burnstein is that the request to Speed up and see if they could paSS the Ford came from plaintiff himself. [1] Plaintiff was unable to say how far away the interSection of the two roads WaS from where the Ford automobile passed and the speeding up took place; that he took no notice of this feature. He says, however, that after he made the objection the driver of the car did not slow down, but went faster. According to defendant's evidence, however, the Ford automobile passed the Roberts car about a block before the Atchison road was reached, and plaintiff made the suggestion to “Speed up” a half a block Or more before coming to the intersection. Accepting defendant's evidence on this point as true, it is not seen how plaintiff can be charged with contributory negligence merely because he sat still in the car until the collision occurred, and did not insist or demand that the car be stopped or that he be allowed to get out. For, if the “speeding up” took place so close to the intersection (the point of collision) as defendant's evidence shows it did, then there was little or no time for plaintiff to take further steps to Secure his safety, if it was incumbent upon him to do So in Order to escape the charge Of negligence on account of remaining quietly in the car after having objected to the increase of speed. Defendants entertain the view that even if plaintiff did object to the Speeding up of the car, nevertheless, as he admits he did not tell the driver to Stop and let him out, but, with knowledge that there was danger in the situation, quietly sat until the collision, he was guilty of contributory negligence as a matter of law on that account. In View of the defendant’s own evidence as to the Short distance between the point where the race began and the collision occurred, we do not think there is room for such view, nor for the charge made by defendants in their brief that: “During all this time, appellant, apparently confident that he had done his full duty and had eased his conscience of responsibility for the affair (i. e., by his alleged remonstrance), sat quietly beside the driver, and, we assume, enjoyed the ‘race.’” [2, 3] He was riding as a guest, and was not in control of the automobile, and unless the danger was obviously very great and the time elapsing after his claimed remonstrance was long enough for plaintiff to be deemed to have acquiesced in the race he ought not to be considered guilty of contributory negligence merely because he did not do more than remonstrate in the manner in which he says he did. He was riding at the invitation and by favor of the man who was driving, and

to him. This rule, of course, does not absolve plaintiff from exercising ordinary care for his own safety. He must exercise all the care which ordinary caution required of him under the circumstances. Burton V. Pryor, 198 S. W. 1117, 1120. But the time was too short to make plaintiff amenable to the charge of contributory negligence On the ground that, after making objection, he remained quiescent in the car until the colliSion occurred. In other words, the question of contributory negligence in this case should depend solely upon whether plaintiff instigated the race by Suggesting it to the driver, or whether it was against his advice and over his objection, and not upon the fact that he thereafter Sat Still and made n0 other, or more effective or insistent, Objection in the short space of time afforded. As the Roberts car neared the intersection, it got on the north or left side of the road in order to pass the Ford car. The Schaefer or Mittlebach car Was coming south along the Atchison road on its Way to Lake Contrary, and, of course, at the interSection it turned West On the Lake road. As it did SO, the tWO cars Collided, throwing plaintiff out, and, according to his claim, injuring him. [4] The charges of negligence against all of the defendants were: (1) Negligently operating their respective automobiles at a dangerous rate Of Speed upon a greatly traveled public highway; (2) negligently approaching a crossroads outside the limits of a city, town, or village at a high and dangerous rate of speed and without slowing down; (3) negligently approaching said crossroads without sounding a horn, bell, or other device for signaling a notice or warning of such approach. See section 8, p. 326, Laws of Mo. 1911. In addition thereto, the OWners and operators of the Roberts car were also charged with negligently operating that car without any such device. This last was admitted to be true by the defendant G. D. Roberts. The defendant W. E. Roberts, testifying as to the view at the northwest corner of the intersection, Said that weeds were there 8 or 10 feet high, and perhaps also a tree. He denied that he knew that an interSection was there, but he had passed over it coming out and was therefore chargeable with notice thereof. [5] Under our motor vehicle statute, the failure to observe the precautions therein required of motor drivers on the highway is negligence per se. For this reason, plaintiff complains of defendants Schaefer and Mittlebach’s instruction H, which told the jury that before plaintiff could recover of said defendants he must prove by a preponderance Of the credible evidence, to the jury’s reasonable Satisfaction, either that the Mittlebach car was “negligently operated at a high and dangerous rate of Speed without slowing down,” or that it “negligently failed to give a

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