author: LAMM, J.

text:
    CLIFFORD BANKING COMPANY v. DONOVAN COMMISSION COMPANY, Appellant.
    Division One,
    March 30, 1906.
    1. MONEY HAD AND RECEIVED: Scope of Action. The action for money had and received is one favored in the law, and the tendency is to widen its scope. It is a flexible form of action, levying tribute on equitable, as well as strictly legal, doctrines. It has become axiomatic that the action runs where defendant has received or obtained possession of the money of plaintiff, which in equity and good conscience he ought to pay over to plaintiff.
    2. -: - — : Pleading: Privity. It is not necessary in an action for money had and received to allege a promise to pay, nor is privity of contract required.
    3. -: Constructive Trust: Bill in Equity. Money of plaintiff bank obtained by defendant through the fraudulent practices of plaintiff’s clerk, is held by defendant under a constructive trust for plaintiff, though defendant may be innocent of collusion in the fraud. And an action for money had and received partaking of the nature of a bill of equity, may be employed to reach money held under a constructive trust.
    4. BANK: Expired Charter: Assignment of Demands to New: Point Raised by Debtor of Old. It is no concern of a debtor of a bank whose charter has expired by limitation and whose assets passed into the hands of its directors as trustees and were by them assigned to the new bank rechartered under the same name, to dispute the title of the new bank when sued on drafts fraudulently issued by an employee of the old -bank, whose proceeds the debtor received. The corporate integrity of the new bank cannot be assailed by a debtor of the old bank, when called on to pay, by a collateral attack. Such creditor is not injured thereby, and he cannot plead his wrong as a defense. The State is the proper party to complain, nor can it do so if the old bank was not insolvent.

      5. -: Drafts: Forged and Fraudulently Issued by Clerk: Two Innocent Parties: Option Deals. The principle that “where one of two innocent parties must suffer, the loss must fall on him who afforded the opportunity for the wrong,” is applicable to negotiable instruments, and in any case the party invoking it must be an innocent party, that is, a party who holds the paper bona-fide and for value. And where it was usual for a bank cashier to sign up drafts in blank, leaving the same to be filled out by a clerk, and that clerk within 39 days filled out such drafts to the amount of $11,000 and sent them to defendant commission company to be used in buying margins on grain and requested defendant to send his gains to him in cashier’s checks or drafts, a plan to conceal his dealings with appellant, and that request is complied with, and defendant is sued by the bank for the amount of the drafts, it would be held, if necessary, that defendant, in view of the statutes relating to option dealing, was not an innocent party. But such a holding is not necessary, for the law is that, if a check or bill of exchange or other commercial paper is shown to have originated in fraud perpetrated against the maker, the burden is upon the holder to show that he holds them without notice of the fraud, and the forgery having been proved and defendant standing mute, defendant is not an innocent party.
    6. -: -: -: -: Payee’s Liability to Maker. The plaintiff bank had funds on deposit in the Laclede Bank of St. Louis, and plaintiff’s cashier customarily signed blank drafts and left them in his absence to be filled up by a trusted clerk to meet the demands of customers. The clerk filled out such drafts to the amount of $11,000 upon the Laclede Bank as drawee and sent them to defendant commission company to be used in option deals for his benefit, and they were payed by the drawee to defendant, and on the books of his bank the clerk made entries showing the issuance of drafts, of corresponding numbers, amounting to $10.89. Held, first, that the Laclede Bank was not liable to plaintiff, because the signature of the cashier was his genuine signature • and there were no other indicia of alteration, erasures, etc.; second, nor could the Laclede Bank recover from the commission company, the payee, for it did not recoup plaintiff for the loss, and therefore it has suffered no injury; third, but the money on deposit with the Laclede Bank was the property of plaintiff, and unless defendant was an innocent party and received it with clean hands, it is liable to plaintiff for the proceeds.
    7. EVIDENCE: Hearsay: Sufficiency: Payment of Bank Drafts. A bookkeeper in the employ of plaintiff bank had forged some drafts drawn against plaintiff’s correspondent, and the charge was that they were drawn in favor of defendant commission company, and paid, to defendant by the correspondent. The drafts could not be produced at the trial, they being presumably destroyed by the clerk on their return to plaintiff. The cashier presented a statement of the correspondent showing the amount of money received by it from plaintiff and the amount charged by it to the plaintiff, and this was objected to as hearsay and as not connecting defendant therewith, but it was not objected that the books of the drawee were the best and primary evidence to show (1) the accounts kept between the two banks, or (2) that the drawee had paid the drafts, or (3) that the defendant had got the proceeds of the drafts. SeJdf that evidence was competent to show that the correspondent or drawee had received the drafts anl paid them, and if other evidence was forthcoming to prove that defendant had received their proceeds the court did not err in admitting it. And proof that defendant received drafts of a certain amount and of numbers corresponding to the maker’s register, and credited the clerk with the proceeds two days later, the credits in the statement indicating that the drafts had been cashed by the drawee, is sufficient to create a reasonable inference and to establish a prima-facie case that defendant received the proceeds.
    Appeal from St. Louis City Circuit Court. — Hon. H. D. Wood, Judge.
    Affirmed.

      Chester H. Krum and McDermott & Grigler for appellant.
    (1) Appellant, as well as the putative assignor of the respondent, was innocent in the premises. "Where one of two who are innocent must suffer, the loss must fall on him who afforded the opportunity for the wrong. Had not the original bank been remiss and grossly negligent, the loss would not have occurred. Bank v. Armstrong, 62 Mo. 67; Neuhoff v. O’Reilly, 93 Mo. 164. (2) The bank cheeks were negotiable instruments, if instruments at all, and appellant was a purchaser for value, without notice. Famous Co. v. Crosswhite, 124 Mo. 34; Building & Loan Assn. v. Bank, 126 Mo. 87. (3) Upon the assumption that the checks were forgeries, appellant did not obtain on them moneys of the respondent. The relation of debtor and creditor existed between the original bank and the Merchants-Laclede National Bank. The original and every subsequent deposit is, in strict legal effect, a loan by the depositor to the bank. Payments to the customer, on his checks, are payments pro tanto of the loan. It was the moneys of the last-named bank which appellant received. (4) The petition proceeds upon the hypothesis that McQueen forged and converted to his own use the checks which appellant bought. There was no property in the original bank in the forgeries, and there was no property of the bank which the employee could convert. The drawee which paid the forged check was liable to the original bank. The attempted assignment to the new bank by the directors of the original bank passed nothing, because there was nothing to pass. (5) The so-called trustees, who were directors of the original bank, were without authority to transfer assets- of the bank in dissolution to a new bank in payment of its capital. A bank should be wound up by the State. The trustees of a dissolved corporation have no authority to turn over its assets to a new corporation as its capital. ■ The assignment of assets was equivalent to a general voluntary assignment and void under the statute. B. S. 1899, secs. 976,1305,' 1306. (6) The accounts and memoranda between the original bank and the MerchantsLaclede Bank were incompetent evidence and should have been, excluded. Investment Co. v. Yette, 142 Mo. 560; Banking House v. Darr, 130 Mo. 660; State v. Levy, 90 Mo. App. 643,168 Mo. 581.

      Thomas B. Harlan and Perry Post Taylor for respondent.
    (1) McQueen’s acts with reference to the drafts constituted forgery. State v. Kroeger, 47 Mo. 552. (2) (a) The drafts, as signed in blank, were the property of respondent’s assignor and were made of value to appellant by tbe wrongful and criminal acts of McQueen in filling them out as to dates and amounts and making them purport to be payable to appellant’s order and then wrongfully and without authority delivering them to appellant. These wrongful acts did not vest the title to the drafts in appellant and, as appellant received the proceeds thereof, to the loss of respondent’s assignor, appellant, in the absence of an affirmative showing on its part that it was a bona-fide holder, for value, is liable to respondent for money had and received. Keim v. Yette, 167 Mo. 399; Johnson-Brink-man Co. v. Bank, 116 Mo. 558 ; Richardson v. Drug Co., 92 Mo. App. 515; Kitchen v. Commission Co., 105 Mo. App. 463; Famous Co. v. Crosswhite, 124 Mo. 34; Koch v. Branch, 44 Mo. 542; Considine v. Beers, 1 Abb. Ct. App. Dec. (N. Y.) 333; Talbot v. Bank, 1 Hill (N. Y.) 295; Mason v. Waite, 17 Mass. 563; Wilson v. Turner, 168 111. 403; Leete v. Mill & Mining Co., 88 Fed. 964; 2» Ency. PI. & Pr., p. 1016. (b) If the appellant was a bona-fide holder for value, it was peculiarly within its power to show that. Since it did not even attempt to make such a showing, it must be presumed that it did not occupy that relationship to the drafts, the proceeds of which.it is attempting to enjoy at the expense of respondent and its assignor. Hence, in this action, it should be compelled to make restitution of the funds it illegally enjoys to respondent who has been wrongfully deprived of their use. Authorities supra. (3) This is an action for money had and received. It is like a bill in equity. If, therefore, the case having been tried before the court without the intervention of a jury, it appears from all the evidence that appellant received, as the proceeds of certain drafts wrongfully taken from respondent, certain money, in truth and in fact rightfully belonging to respondent, then, in equity and good conscience, appellant should make restitution. Richardson v. Drug Co., 92 Mo. App. 520; Talbot v. Bank, 1 Hill (N. Y.) 295; 2 Ency. PI. & Pr., p. 1016; Mason v. Waite, 17 Mass. 563; Wilson v. Turner, 168 111. 403; Magoffin v. Muldrow, 12 Mo. 512; White v. Bank, 64 N. Y. 319; Davis v. Krum, 12 Mo. App. 286. (4) When it was once established that the drafts were obtained by the perpetration of a fraud, of a crime, the burden of proof shifted to appellant to show that it was an innocent purchaser and for value. Famous Co. v. Crosswhite, 124 Mo. 39; Keim v. Yette, 167 Mo. 399. (5) The petition does not allege or even infer that appellant bought the drafts; on the contrary, it alleges that appellant gave no value whatever for them. While there may have been “no property in the forgeries” as such, yet the original bank did have a property in the original drafts signed in blank, by the forgery whereof and their unlawful delivery to appellant, the latter was enabled to procure money to the loss of the owner of these drafts signed in blank. By these actions a claim arose in favor of the original bank against appellant, which claim was assignable. Doering v. Kenamore, 86 Mo. 591; Snyder v. Railroad, 86 Mo. 620. (6) This assignment cannot be collaterally attacked by appellant. 4 Cyc. Law & Proc., p. 210. A voluntary assignment for the benefit of creditors provides for the return of the surplus, if any shall exist, to the assignor. There was no such provision here. It was an absolute and unconditional transfer. 4 Cyc. Law & Proc., p. 120. (7) The evidence shows that appellant had knowledge of McQueen’s wrongful acts. The drafts were drawn not on any funds of McQueen, but on the funds of the bank by drafts made payable to appellant. Appellant had no account with respondent’s assignor, had no funds on deposit with it, bought no exchange from it but accepted the drafts and placed them to the individual credit of McQueen, gave him nothing of value for them and even undertook to shield McQueen by complying with his request to have all checks that it (appellant), might have occasion to send McQueen “made by cashier or draft.” With such notice or knowledge on the part of appellant of the ownership and rights of the bank in the drafts or the proceeds thereof, there can be no doubt of the obligation of appellant to make restitution of the sums obtained by it on said drafts. Kitchens v. Commission Co., 105 Mo. App. 469. .(8) The relation of appellant to these drafts and the proceeds thereof constituted appellant trustee of a constructive trust of which respondent’s assignor was the beneficiary, and appellant upon refusal to make restitution was liable in an action for money had and received. 1 Perry on Trusts (Ed. 1899), sec. 211; 3 Pomeroy’s Equity Jur. (3 Ed.), secs. 1044, 1047, 1051, 1053; York v. Bank, 105 Mo. App. 138; Clark v. Bank, 57 Mo. App. 285; Deal v. Bank, 79 Mo. App. 269. (9) The judgment was manifestly for the right party and should therefore be affirmed. Cass County v. Bank, 157 Mo. 133; Redman v. Adams, 165 Mo. 71.
   LAMM, J.

— This is a suit for money had and received. Defendant stood below on plaintiff’s case. Both parties are domestic corporations — the one, a banking company with a small capital in Clarksville, a village in Pike county; the other, domiciled in St. Louis as a commission concern. Plaintiff is the successor of a banking corporation of the same name, which did business in the same village, whose charter expired by limitation, and whose affairs are in process of liquidation at the hands of its last board of directors as trustees ; and plaintiff sues in the capacity of such successor and by virtue of being the owner by assignment of the claim in suit, an asset of the old bank. The pleadings are unquestioned and, hence, need not be set forth, further than to say that the answer is a general denial, and the petition, by formal averments, sets forth the incorporation of the old, as well as of the new bank, and of defendant company, the expiration of the old bank’s charter by limitation and that its affairs are in the hands of trustees for settlement, the assignment to plaintiff of tlie claim in suit, the demand upon defendant, the refusal to pay, and then, as the gist of the cause of action, complains as follows:

That on or about the 1st day of March, 1901, and for some time prior thereto, and from said date to about the 1st day of May, 1901, one T. S. McQueen was a clerk and employed in and by said bank, and that on divers days between the said dates of March 1, 1901, and May 1, 1901, he, the said T.'S. McQueen, did forge and convert to his own use six drafts, the property of the said bank drawn by it upon the Merchants-Laclede National Bank of the city of St. Louis, in the State of Missouri, wherein the said bank had on deposit a sum of money sufficient to pay the same, and did then and there fraudulently forge and alter said drafts by writing in the name of this defendant as the payee thereof, and by inserting the amounts to be paid to defendant thereon respectively: Three each in the sum of one thousand dollars, two each in the sum of three thousand dollars, and one in the sum of two thousand dollars; that the said T. S. McQueen did thereafter deliver each and all of said drafts to the defendant, and it did immediately thereafter present said drafts to said Merchants-Laclede National Bank, and receive from said bank therefor the sum of eleven thousand dollars, the property of the said Clifford Banking Company.
"That the said T. S. McQueen, nor the said Clifford Banking Company, nor the said trustees, nor the plaintiff never had or received from the defendant, and the defendant never gave or paid either to the said McQueen, the said Clifford Banking Company, trustees, nor this plaintiff, any value or valuable consideration therefor. ’ ’

At a trial to the court without a jury, proof of the formal averments of incorporation, of the transfer to plaintiff bank of the claim in suit, of the expiration of the old charter and that the affairs of the old bank were in the hands of its last board of directors as trustees for liquidation, was made. Demand and refusal to pay were admitted, and the facts uncovered by plaintiff, pertaining to the gist of the action, as set forth in the foregoing paragraph of the petition, are that McQueen was the bookkeeper and acting teller of the old banking company from 1888 to May'l, 1901. On the latter date (under the spur of a neglected duty) he resigned. In a general way, his duties were to keep the books and pay out and take in money over the counter. Against the temporary absence of the cashier, it was the custom of such cashier to sign blank drafts to be used in conducting the business of the bank. These blank drafts, so signed by the cashier, were left with McQueen, who, when the cashier was not by, had authority, in the ordinary course of the bank’s business, to fill in date, amount and payee and utter a draft as a live, current bill of exchange to anyone buying the same. As we understand the record, all these blank drafts were lithographed and each and all of them were directed to the Merchants-Laclede National Bank of St. Louis, Missouri (hereinafter called the Laclede Bank), which latter bank was the depository and correspondent of the Clifford Banking Company, and thereat it kept a line of deposits (against which it sold exchange) of a figure sufficient to pay the drafts to be presently con-, sidered. The only blanks left in the signed drafts were for the amount in dollars and cents, the date of issue and the name of the payee. All drafts used by the bank were numbered consecutively, and a book, called the “draft register,” was kept with a corresponding number. We infer this draft register was, to all intents and purposes, but a stub-book and that each draft had a stub, with a lithographed number corresponding to that on the draft, on which memoranda were intended to be noted showing date, name of payee and amount of draft issued.

Kept in McQueen’s handwriting, the foregoing draft register showed a series of modest and innocent-looking drafts drawn and issued from March 16, 1901, to April 22, 1901, inclusive, to the persons, on the dates, of the amounts and bearing the serial numbers shown by the following tabular statement (all of them directed to the Laclede Bank as drawee):

Number Date Amount Payee.

133071 March 16, 1901 $2.32 J. H. Carr, Secretary.

133123 March 23, 1901 2.35 Boatmen’s Bank.

133182 March 30, 1901 2.00 J. G. Brandt Shoe Co.

133229 April 4, 1901 2.22 Citizens’ Ins. Co.

133319 April 15, 1901 1.00 B. Nugent & Bro.

133389 April 22, 1901 1.00 W. H. Black.

It will be seen that this table shows a total of exchange sold, ostensibly to the above-named persons, of $10.89.' But in truth and in fact these amounts are an exception to the rule laid down in the fireside phrase, “figures never lie,” and that exception is shadowed forth in the modifying phrase, “but those that use them may;” because the drafts themselves were cashier’s checks upon the Laclede Bank, aggregating $11,000. Moreover, they were not drawn in favor of the payees named in the draft register. To the contrary, the last four were introduced in evidence and bore the dates, payees and amounts shown by the following table:

Number Date Amount Payee.

133182 March 30, 1901 $3,000 Donovan Com. Co.

133229 April 4, 1901 3,000 Donovan Com. Co.

133319 April 15, 1901 2,000 Donovan Com. Co.

133389 April 22, 1901 1,000 Donovan Com. Co.

It was admitted at the trial that defendant got the proceeds of the four drafts last-above, aggregating $9,000.

The state of the proof in relation to the first two drafts was this: both said drafts had been either lost or destroyed. Both of them had been signed in blank by the cashier, as said, and left in McQueen’s custody. The cashier never saw said two drafts after he signed the blanks bearing the corresponding numbers. One of the drafts was seen in a bundle of returned cancelled checks, accompanying a statement of accounts rendered by the bank to the old Clifford Banking Company, but disappeared and presumably both of them were done away with by McQueen.

To supply a certain missing link in the proof up to this point, to-wit, that drafts No. 133071 and 133123 were issued for $1,000 each and cashed by the Laclede Bank for those amounts, the monthly statement of account rendered by the bank to the Clifford Banking Company was used by the cashier, while on the witness stand, and he was allowed to testify therefrom. In order to preserve and point the force of certain objections lodged against the introduction of testimony by appellant’s counsel, it will be profitable to precede the record pertaining to the two drafts in hand with the record relating to the other four drafts aggregating $9,000, which defendant acknowledges getting the proceeds of. The record necessary is as follows:

“Q. Have you that account in court? A. Yes, sir.
“Q. Let us see it, please. (Witness produces paper.)
“ Q. Is this the account that was rendered? A. Yes, sir.
“Q. This is made by the Merchants-Laclede National Bank? A. Yes, sir.
‘‘Q. And what does it represent or purport to be? A. It represents the amounts received and credited by them and the amounts debited by them.
“Mr. Krum: We object to this, if the court please, as being not competent, being hearsay, as between the Merchants-Laclede National Bank and this defendant.
“The Court: I think that the manner in which these accounts were kept as between these banks is competent testimony, tending to show the nature of the transaction. I overrule the objection, and defendant duly excepted.
“Mr. Harlan: Q. What entry, if any, do you find in the statement furnished you by the Merehants-Laclede National Bank, dated May 1st, relative to draft No. 133319? A. ‘April 17, 1901, 133319, $2,000’ (referring to statement).
‘ ‘ Q. What entry do you find in this statement relative to draft No. 1333891 A. ‘April 24,1901,133389, $1,000.’
“Q. What entry do you find relative to draft No. 133229? A. ‘April 9, 1901, 133229, $3,000.’
“Q. What entry do you find relative to draft No. 133182? A. ‘April 2, 1901, 133182, $3,000.’
“Q. Are these respective drafts identified in that statement by number? A. Yes, sir. .
“Q. And that number corresponds to the number on the draft? A. Yes, sir.
“Q. What, do the dates, as appear in that statement, refer to? A. The date paid by the paying bank.
‘ ‘ Mr. Krum: There will be no dispute, your honor, that the proceeds of these drafts went to the defendant company. . . .
“A. I find that on March 16, 1901, draft No. 133071, is entered on the draft register in the name ■of ‘ J. H. Carr, Secretary, ’ for $2.32 with five cents exchange. I find that on the statement of the Merchants Laclede National Bank on March 19,1901, the same No. 133071 is charged to the Clifford Banking Company as $1,000.
“Mr. McDermott: Q. That does not indicate to whom it was paid, does it? A. It don’t indicate any more than I said.
“The Court: Q. It simply appears in that statement as a charge against the Clifford Banking Company? A. Yes, sir.
“Q. And, of course, it does not show to whom it was paid? A. No, sir. . . .
‘ ‘ Mr. Harlan: Q. Well, now, what is the next one, Mr. Carroll, if any? A. I find on March 23,1901, draft No. 133123 is entered on the draft register payable to the Boatmen’s Bank for $2.35, with ten cents exchange. I find on the statement rendered by the MerchantsLaclede National Bank under date of March 26, 1901, 133123, $1,000 charged.
“Mr. McDermott: Q. The same state of affairs exists as to that as to the other one. You don’t know to whom it was paid or anything else, Mr. Carroll? A. That is right.
“Mr. Harlan: Q. That is, the books don’t show? A. The books don’t show, nor the statement doesn’t show.....
“Mr. McDermott: We renew our objection to the introduction of any testimony concerning those two drafts, not being connected with this case.
“The Court: That objection will be sustained unless it is shown that the defendant received the proceeds. I do not know whether the admission that was made by Judge Krum covered these drafts or not.
1 ‘Mr. Harlan: I don’t understand that it did.
“Mr. McDermott: No. We admit the notes that were introduced in evidence, that is all.
“The Court: Well, you will have to connect the defendant, of course, with these last two drafts, in some way. ’ ’

The further evidence introduced, and claimed to tend to show the Donovan Commission Company got the proceeds of these two drafts, is contained in two communications in writing from the Donovan Commission Company to McQueen and produced at the trial by plaintiff. The first of these communications is as follows:

“Special wires to Chicago Board of Trade, and New York Stock Exchange.
“We have no agents.
“References: The Third National Bank, St. Lonis; The Mechanics Bank, St. Louis; American Exchange Bank, St. Louis, and all Mercantile Agencies. “DONOVAN COMMISSION CO.
“Grain, Provisions, Stocks and Cotton.
Bought and Sold for Cash or on Margin.
317 Pine St.
‘ ‘ St. Louis, March 18, 1901. ■
“T. S. McQueen, Esq.,
Clarksville, Mo.
“Dear Sir: We are in receipt of your favor of the 17th, enclosing draft for $1,000, which we have credited to your acct. with thanks. We also thank yon for your orders reed, to-day and enclose you memos, of same. We also enclose Cashrs. Check for $58.34 to take the place of our St. L. Trust Co. check which you return and note your request to have all checks made by Cashier or draft in future. Same will receive our attention.
“Awaiting your further favors, we are “Yours truly,
“Donovan Commission Co.
“H. G. Read, Secty.”
The second communication is as follows:
“St. Louis, Mo. 4 — 6—1901.
“ T. S. McQueen,
Account Current with
■ Dr. Donovan Commission Co. Cr. 1 ‘ Mar. 14 58.34 Dft. to Cash & M.
30 16.20 Rev. Tax.
30 3,132.76 Losses.
3,207.30
“Apr. 3 3,000-Loss
“6207.30
“Mar. 1 Balance 297.93
2 ■ M. 0. 30
6 M. 0. 65
18 Dft. 1,000
25 Dft. 1,000
27 Reb. 153.12
Gains 661.25
3,207.30
Apr. 1 Dft. 3,000
“6,207.30”

The symbol “Dft.” was shown to mean draft, the letters “M. O.” to mean money order, while the abbreviation £ £ Reb. ’ ’ was not interpreted. Further referring to these communications, it will be seen that under date of March 18, 1901, the Donovan Commission Company acknowledged the receipt of a $1,000 draft, and, by reference to the first table, it will also be seen that on the 16th of March, two days before, a draft numbered 133071 was issued by McQueen. It will also be seen that by the communication dated April 6,1901, the Donovan Commission Company credited McQueen on March 18, with a draft for $1,000, and on the 25th with another draft of like amount. By reference to the first table, it will be seen that on March 23rd a draft was issued to McQueen bearing the .serial number of 133123. By reference to the testimony of the cashier, it will be seen that both No. 133123 and 133071 were charged by the Laclede Bank to the Clifford Banking Company, and, supplying data from the April communication from defendant, it appears that at about the same dates, the Donovan Commission Company credited McQueen with two drafts for $1,000 each.

Supplementing the foregoing facts with evidence that McQueen had no authority to use the funds of the bank in his own dealings and that the bank received nothing for the drafts except the trifling sums aforesaid, and tending to show they were fraudulently issued, plaintiff rested.

Whereupon defendant asked the trial court to declare the law to he as follows: “Upon the evidence adduced, the court finds that the plaintiff is not entitled to recover.” The learned court refused to follow the lead suggested in this declaration of law, and defendant excepted. Thereafter, defendant standing on plaintiff’s case, as said, on January 18,1904, judgment was rendered for the sum of $11,458.35, from which defendant appealed.

The cause is submitted here by appellant’s learned counsel on several assignments of error — one and all mere amplifications of the crisp and laconic grounds formulated in their motion for a new trial. Thus:

(a) The court erred in admitting incompetent evidence, over the objection of-defendant.

(b) The court erred in refusing to sustain defendant’s demurrer to the evidence.

(c) The finding is against the evidence and against the law.

On the foregoing facts, was the judgment right?

I. Appellant says the court erred in the admission of testimony, for that “the accounts and memoranda between the original bank and the MerchantsLaclede National Bank were incompetent evidence and should have been excluded.” Attending to this assignment of error, it will be seen that when the witness was upon the stand, with the monthly statement of the Laclede Bank in his hand, he was asked what it, the paper, represented or purported to be. His answer was: “It represents the amounts received and credited by them and the amounts debited by them.” At this point appellant’s counsel said: “We object to this, if the court please, as being incompetent, being hearsay, as between the Merchants-Laclede Bank and this defendant.” Whereat the trial judge replied: “I think that the maimer in which the accounts were kept as between these banks is competent testimony, tending to show the nature of the transaction; I overrule the objection.” Defendant excepted. It will be seen, furthermore, that following that objection and that ruling, evidence was introduced that drafts numbered 133-182, 133229, 133319 and 133389, aggregating $9,000, were shown by that statement to have been cashed by the Laclede Bank. They were identified therein by number, and thereby the dates of payments by the paying bank were shown. At this point, the drafts with significant indorsements lying under the eye of the court, one of appellant’s learned counsel made an admission as follows: “There will be no dispute, your hoitor, that the proceeds of these drafts went to the defendant company. ’ ’ With this admission in the case, if it were conceded, arguendo, that the evidence was incompetent as hearsay, i. e., that payment by the paying bank to the payee, could not be proved by the hearsay admission of the paying bank, yet appellant admitted the payment to it, it says it got the proceeds of the drafts. By this admission there was necessarily another admission made, to-wit, that the drawee, or paying bank, paid the four drafts enumerated. The fact being admitted, evidence directed to proving the fact has no office, and the question, whether it was competent or not, is in the air.

However, the other two drafts, those lost or destroyed, are to be reckoned with as they were not covered by the admission, and therefore, the nature and scope of the objection as lodged should be analyzed more closely. That objection, subject to a fair gloss, was that the evidence was incompetent as hearsay, i. e., amere recital by a third party. But it must be self-evident that the transactions between the Laclede Bank and the Clifford Banking Company were not hearsay as .that term is used in the books. They were part of the case, and, by metaphor, at least, may be deemed res gestae, although defendant was not a party to those transactions. One step in plaintiff’s case was to show that accounts were kept between the two banks, for only by accounts do banks commonly speak. Another allowable step was to show the method of keeping these accounts. Still another was to show that the Laclede Bank had honored the drafts; otherwise, plaintiff would not be injured. Still another step was to show that defendant had got the proceeds of the drafts; otherwise, it could not be liable. All these were separate steps and had to be taken one at a time. If the objection had been that the books of the Laclede Bank were the best and primary evidence proving any of the foregoing facts, or if it had been that the statement from which the witness testified was not shown to be a true transcript of those books, then another question would have been sprung, not now in this case. So far as we can see, the logic and scope of the objection, as made, would have been precisely the same had it been directed to the evidence of a witness who, as an officer of the Laclede Bank, knew the fact that the books of that bank were correctly kept, that they were the true history of the intricate and many details of its daily business transactions, and, as such, showed that the drafts were actually presented for payment at its counter and paid, or if the witness had presented the books showing such facts, yet it would not be contended such evidence would have been incompetent, under an objection that it was hearsay.

Keeping,,this in mind, it will be seen that after said admission, the witness was allowed to testify that by the monthly statement of the Laclede Bank, the two drafts, lost or destroyed, for $1,000 each, were also presented for payment and paid by the drawee, to-wit, said bank — all this without further or other objection. Finally, another learned counsel of appellant, after interrogating the witness and ascertaining that he, personally, did not know to whom these two drafts were paid, and that the statement he held in his hand would not show that fact, lodged this objection: “We renew our objection to the introduction of any testimony concerning those two drafts, not being connected with this case.” In other words, the gist of the objection, though termed a renewal, was that the proceeds of the two-drafts were not traced into appellant’s pockets, that the evidence fell short of showing that fact, ergo, the drafts-were not “connected with” the case. This was not an objection that the method of proof was improper, such as now made here on review. It was an objection leveled at the sufficiency of the proof. So the trial judge understood, because he ruled the objection well taken, unless it be, aliunde, shown that defendant received the proceeds of the drafts, and, accordingly, he ruled further that plaintiff would have to connect the defendant with the last two drafts in some way. In our opinion, appellant by this ruling got all it was entitled to under the objection,-namely, that before it could be compelled to disgorge, it should first, .by competent evidence, be shown to be gorged. This looks reasonable. Whether that evidence was supplied, or whether on the evidence,, as supplied, appellant is liable as a matter of law, is another matter.

II. The title of respondent to the claim in suit is assailed by the following contention in appellant’4 brief: “The so-called trustees, who were directors of the original bank, were without authority to transfer assets of the bank in dissolution to a new bank in payment of its capital. A bank should be wound up by the State. The trustees of a dissolved corporation have no authority to turn over its assets to a new corporation as its capital. The assignment of assets was equivalent to a general voluntary assignment and void under the statute.”

' In our opinion, none of the propositions asserted have merit as applied to the facts in judgment. There is no proof that the assets of the old hank were turned over to the new hank as its capital; and if such were the case, it is elementary that the corporate integrity of the new hank could, not be assailed by a debtor of the old bank, when called on to pay, by a collateral attack such as this. The matter in hand is of no concern to appellant. It was not injured thereby and the State .is the proper party to complain. Nor is this a case where the affairs of the old bank should have been wound up by the State; because the bank is not shown to have been insolvent. It is not a going concern, crippled by mismanagement, but, if so crippled, would it lie in appellant’s mouth to plead its own wrong, when it is being tried, practically, on a charge of aiding therein? For aught appearing on this record, the old bank has no creditors and its stockholders are settled with; at any rate, none of its stockholders or creditors lift their voices in protest. Neither does the State of Missouri complain, and appellant ought to be neither allowed nor required, with its other pending troubles, to shoulder the burden of speaking in the names of the stockholders or creditors of the old bank, or of the State of Missouri, or of carrying their duties or protecting their rights— all such questions are beside the case, and to chase after them would be but to be led off by a ruse de guerre, so to speak, into byways and hedges, and lose the main-traveled road to ultimate justice. The. only legal concern appellant may have, in the matter now under consideration, is to .be not vexed twice over the same matter — that it may pay to the right party, if pay it must. The humor of the situation (if an appellate court may be allowed to indulge or express a sense of humor — on which there is some doubt) is that appellant’s learned counsel do not contend here their client wants to pay once, and may be in danger of paying twice— the burden of their insistence is that it be not compelled to pay at all. On this score, it may be said that the record shows the new bank assumed all the liabilities of the old, and this in consideration of the transfer of this claim, with other assets. Now, for aught appearing here (and presumably) the new bank has responded in full to the letter of its bond, and, on the record before us, we hold it has a perfect title to the claim in suit as against the whole world. The statutes to which we are alone referred by appellant to support its contention (R. S. 1899, secs. 976, 1305 and 1306), have no application to a bank in the condition of the old bank, and, therefore, lend no substantial aid to the position assumed by appellant.

III. Appellant lays down the following propositions of fact and law and invokes their help, viz.: “Appellant, as well as the putative assignor of the respondent, was innocent in the premises. Where one of two who are innocent must suffer, the loss must fall on him who afforded the opportunity for the wrong. Had not the original bank been remiss and grossly negligent, the loss would not have occurred.” And to sustain these contentions we are cited to Bank v. Armstrong, 62 Mo. 67, and Neuhoff v. O’Reilly, 93 Mo. 164. As to the propositions of law announced, they may be conceded ; for, in either cutting the Grordian knots in which men’s affairs tie themselves, or in softly untying knots, not Grordian, courts make use of of the ethical principle that where one of two good men stands to lose, he should lose who opened the door for loss to enter. But this principle seeks its application to cases pertaining to negotiable instruments, in protecting an innocent purchaser, not otherwise. The rule and its application are guardedly and neatly set down in Bank v. Armstrong, supra, thus:

“It is true there is a certain class of.cases, where a party to a negotiable instrument permits it to be so loosely drawn as to render the addition of words enlarging its liability a matter of comparative ease; and (if) such instrument is negotiated before maturity, to an innocent purchaser for value, the maker will be held bound by the alteration, although fraudulently made, if made in such a manner as not to place a man of ordinary prudence on the alert; as, for instance, where the blank for the sum to be inserted is not completely filled by the sum there inserted, but space is left for the easy addition of other words, in a manner hot provoking attention. This rule prevails in accordance with the maxim, a sound one alike in ethics as in law: ‘that where one of two innocent parties must suffer, that party must be the sufferer who gave occasion to the commission of the wrong.’ ”

In Bank v. Bank, 71 Mo. 183, the same principle was applied to non-negotiable certificates of deposit indorsed in blank; the cases were critically examined in a most trenchant and scholarly opinion by Napton, J., and the law may be taken as settled. But, as will be seen in the quoted extract from Bank v. Armstrong, the party invoking’ the doctrine must be an innocent party, i. e., a party who holds the paper bona fide and for value. It is at this precise point, innoceney, the battle is pitched. Appellant says it was an innocent purchaser for value. If this be true, then the law accords it protection, because it cannot be gainsaid that in leaving signed drafts lie about loose, subject to be fraudulently filled in at the wrongful instance of an employee, and uttered and thus become commercial couriers without luggage, the assignor of respondent was remiss. And if a draft so issued with an honest face, i. .e., without any indicia of fraud, had come into the possession of an honest holder for value, its face would have been its passport, and respondent, standing in the shoes of the old bank, must pocket its loss with such corporate grace as it can command. But the mischief in appellant’s position is that it assumes its innocence —it begs the question. We are not called upon to say whether it is innocent or not. Its letterhead shows, inter alia, it dealt in “margins.” The body of the letter in evidence indicates that McQueen had adopted a plan of obliqueness in remittances to him, a plan calculated to throw an observer off his trail, a plan to conceal his-dealings with appellant by having his gains sent him through cashier’s checks, or drafts, and not by appellant’s own telltale checks, which plan appellant graciously winked at, thus: “We . . . note your request to have all checks made by cashier or draft in future. Same will receive our attention.” So, too, the accounts rendered by appellant to McQueen show no-actual dealings in actual products or commodities. The matter is summed up, by appellant’s own choice of words, in mere “gains” and “losses” — the very language of option gambling. So that, with appellant laying its hand over its mouth, standing mute, if we were called upon to decide its innocence in its astonishing dealings with a clerk of the Clifford Banking Company,, whereby eleven thousand dollars of the bank’s money, as- shown by the very drafts themselves, speaking-through its officer, the cashier, were poured into its coffers in thirty-nine days, and lost as water poured upon sand, we might draw inferences of fact unfavorable to appellant— inferences bringing the dealings of McQueen and appellant under the ban denounced by the law against option dealing, struck at by Revised Statutes 1899, sections 2337 to 2345, inclusive. But this is not necessary,because, in the state of the existing proof, the burden was cast upon appellant to show its innocence, i. e., that it was a purchaser or holder for value and in good faith, and that burden it, of set purpose, threw off.

Before dealing with the law on the phase of the case now up, it may be well to dispose of a question of fact relating to the two lost .or destroyed drafts for $1,000 each. It will be seen that as to the other drafts, aggregating $9,000, appellant admits receiving their proceeds, which is tantamount to an admission of their reception, presentation to the drawee, and payment. It is our own opinion that all the drafts stand on the same 'foot, that is, as to four of them, payment is admitted; as to the remaining two, payment was proved. And this is so because respondent showed that appellant received two drafts of $1,000 each from McQueen and credited McQueen with the proceeds so closely after the corresponding dates on the draft register as to create a reasonable inference they are the identical drafts. The ■credits indicated the drafts had been cashed. The course of dealings between McQueen and appellant indicated appellant was the payee. All the drafts had said Laclede Bank lithographed thereon as drawee.. It is fairly inferable, therefore, that if these drafts were cashed, they could only have been cashed by the drawee on presentation by the payee or its indorsee and thus a prima facie case' was made by respondent. In this condition of the proof, we hold the burden' shifted to appellant to rebut these inferences, and this under the rule that if the inferences were not true, the facts showing their falsity rested peculiarly within the knowledge of appellant, and hence, should have been produced by it.. [Richardson v. Drug Co., 92 Mo. App. l. c. 534.]; We hold, therefore, all the drafts are shown to have been received and cashed by appellant.

Coming back, then, to the principles of law equally applicable to all the drafts and decisive of the question now under consideration, the settled doctrine is this: if a check or bill of exchange or other commercial paper is shown to have originated in a fraud perpetrated against the maker, then the burden shifts' upon the holder to show that he holds for value without notice of the fraud. [Keim v. Vette, 167 Mo. l. c. 399, and cases cited; Famous Shoe and Clothing Co. v. Crosswhite, 124 Mo. l. c. 39.] In the case at bar, the bills originated in a fraud of a peculiarly heinous character, to-wit, forgery in the third degree. [State v. Kroeger, 47 Mo. 552.] Forgery having been proved, the uttering of the forged paper having been shown and its reception and nse by appellant being in proof, appellant was no longer in a situation where silence was safe under any recognized principle of law, or ethics, unless the contention presently to be considered be resolved in its favor.

IY. The other insistences of appellant may be briefly summed up in the propositions that the relation between the old bank and the Laclede Bank was that of creditor and debtor; that the deposits of the old bank were simple loans to the Laclede Bank; and that when appellant received the proceeds of the drafts, it received the money of the Laclede Bank and not of the old bank, and hence respondent’s cause of action is against the Laclede Bank and not against it. And, furthermore, there being no claim of the old bank against appellant, nothing passed by the assignment of the old bank to the new bank.

Let us examine these propositions for substance. Under the general law-merchant a drawee of a bill was, possibly, only held to a knowledge of the signature of his correspondent, the drawer; and by accepting and paying the bill, he only vouched for the genuineness of such signature and was not held to a knowledge of the want of genuineness of any other parts of the instrument or the title of the holder. [White v. Bank, 64 N. Y. l. c. 320.] The doctrine obtaining in this State should be stated more guardedly, in that a drawee of a bill should look to the signature of the drawer and may not escape responsibility by ignoring other parts of its face. In other words, such indicia of alterations, erasures, etc., as would impart notice to a reasonably alert person may not 'be ignored. There is no evidence that the bills in the case at bar were not paid by the drawee in the usual course of business, or that they were marked with any irregularities on their face. The signature of the drawer was confessedly genuine. In such condition of things, it is hornbook law that the Clifford Banking Company conld not recover from the Laclede Bank. To the facts in proof, the principle invoked by appellant that where one of two innocent persons must suffer, he who afforded the opportunity for the wrong must bear the loss, would be precisely applicable. If we view the ease from another standpoint by indulging' the hypothesis that the Laclede Bank sued appellant, how would that case stand! In that case the Laclede Bank would not have been injured, inasmuch as it had neither voluntarily recouped to the old bank its loss, nor, under the facts before us, would an action seem to lie in favor of the old bank against it. While it is not necessary for us to decide that such condition of things bars recovery, yet obviously, serious, if not insurmountable, obstacles existed in the road. So that, if appellant’s contention be allowed and followed to its logical sequence, the case stands this way: respondent’s assignor was a creditor of the Laclede Bank. That bank was not liable, because of the negligence of such assignor. Appellant got the money of the Laclede Bank. It was not liable to that bank because the bank was not injured. Hence, the case is at an end. If this be so, then, at least a part of the old Hudibrastic couplet, to-wit,

He ran in debt by disputation,

And paid with ratiocination,

is true, for while the debt, so to speak, was not created by disputation, it certainly is being paid by nimbleness and refinement of reasoning.

The vice in appellant’s contention consists in the fact that while, in a sense, the old bank was the creditor of the Laclede Bank, and while, in a sense, the money (the proceeds of the drafts) was the property of the Laclede Bank, yet, in another sense, the fund on deposit was the property of the old bank held subject to its order, and the bills drawn in this instance represented and appropriated that fund pro tanto, and, when cashed, diminished the assets of the old bank to the extent of their face values. These hills of exchange were representatives of property belonging to the old bank, stood as that property, and, in the eye of the law, were that property, represented value, and appellant was not entitled to the bills nor the property, for which they stood, except it; with clean hands, paid value therefor. It will not be necessary to cite authority to sustain the proposition that negotiable instruments and certain forms of non-negotiable instruments, though at bottom mere paper evidences of debt or title to property, are, for the practical purposes of the law, and in the transaction of business, treated as property itself.

Y. The action for money had and received has always been one favored in the law and the tendency is to widen its scope — it being a flexible form of action, levying tribute on equitable, as well as strictly legal doctrines; so that, it has become axiomatic that the action lies where “the defendant has received or obtained possession of the money of the plaintiff, which, in equity and good conscience, he ought to pay over to the plaintiff.” [2 Greenleaf on Ev. ( 16 Ed.), sec. 117.] The same author says (see. 118): “In regard to things treated as money, it has been held that this count may be supported by evidence of the defendant’s receipt of bank notes; or promissory notes; or credit in account, in the books of a third person; or a mortgage, assigned to the defendant as collateral security, and afterwards foreclosed and bought in by him; or a note payable in specific articles; or any chattel.”

In Wilson v. Turner, 164 Ill. l. c. 403 (Mr. Justice Craig delivering the opinion of the court), it was said: “An action for money had and received will lie whenever one person has received money which, in justice, belongs to another, and which, in justice and right, should be returned. In Allen v. Stenger, 74 Ill. 119, in discussing this question, the court said (p. 121): ‘ Assumpsit always lies to recover money due on simple contract. And this kind of equitable action to recover back money which ought not, in justice, to be kept, is very beneficial, and therefore much encouraged. It lies only for money which, ex aequo et bono, the defendant ought to refund. [Chitty on Contracts, 474.] When, therefore, according to this rule, one person obtains the money of another which it is inequitable or unjust for him to retain, the person entitled to it may maintain an action for money had and received for its recovery. And it is not necessary that there should be an express promise, as the law implies a promise. The scope of the action has been enlarged until it embraces a great variety of cases, the usual test being, does the money, in justice, belong to the plaintiff, and has the defendant received the money, and should he, in justice and right, return it to the plaintiff?’ ”

It is not necessary to allege a promise to pay, nor is privity of contract required. The law implies the privity. [Tamm v. Kellogg, 49 Mo. 118.] In this behalf, the language of Parker, C. J., in Hall v. Marston, 17 Mass. 574, quoted approvingly by Goode, J., in Richardson v. Drug Co., 92 Mo. App., supra, is to the point, thus: ‘ There are many cases in which that action is supported [assumpsit for money had and received] without any privity between the parties other than what is created by law. Whenever one man has in his hands the money of another, which he ought to pay over, he is liable to this action, although he has never seen or heard of the party who has the right. When the fact is proved that he has the money, if he cannot show that he has legal or equitable ground for retaining it, the law creates the privity and the promise.”

On principle there is no reason apparent to us why a constructive trust in favor of respondent does not exist in this case under the rule announced by Mr. Perry (1 Perry on Trusts [5 Ed.], sec. 211), as follows: “So property obtained by one through the fraudulent practices of a third person will he held under a constructive trust for the person defrauded, though the person receiving the benefit is innocent of collusion. If such person accepts the property, he adopts the means by which it was procured; or, as Lord Ch. Justice Wilmot said, £Let the hand receiving the. gift he ever so chaste, yet if it comes through a polluted channel, the obligation of restitution will follow it.’ This principle of course cannot prevail against a purchaser in good faith for a valuable consideration, and without notice of any fraudulent influences.” [See, also, 3 Pom. Eq. (3 Ed.), see. 1047.]

Nor can we see any good reason why in this form of action, where the petition partakes of the nature of a hill of equity, the action may not lie to reach money held under a constructive trust.

The industrious counsel for respondent have collected many authorities in point which will he found cited in their brief and will appear in connection with this opinion.

The judgment is for thé right party, and is, therefore, affirmed.

All concur.


source: Caselaw Access Project

author: MARSHALL, J.

license: Public Domain

text:
    JOHN H. KINO v. PHOENIX INSURANCE COMPANY OF BROOKLYN, NEW YORK, Appellant.
    Division One,
    March 30, 1906.
    1. INSURANCE: Oral Contract. An oral contract of insurance is valid.
    2. -: -: Statute: Agent. The statute (sec. 974, R. S. 1899) expressly provides that parol contracts may be binding upon aggregate corporations if made by an agent authorized to contract, and contracts may be implied on the part- of such corporations from their corporate acts, or those .of an agent whose powers are of a general character. And where the agent of an insurance company, entrusted with blank policies, signed hy the president and secretary, with authority to negotiate, fill up and issue the same, agrees to issue a policy for a certain amount, on a definite building, for an agreed premium, the insured can recover the amount of the insurance in case of loss hy fire within the agreed life of the contract, although the policy was never delivered or issued, and although the premium agreed to he paid when called for was not tendered until after the fire.
    3. -: -: Impairment of Obligation of Contract. To hold that an oral contract of insurance is valid, and that an agent can make such a contract that will he binding on the company, although under his written appointment he had no power to enter into an oral contract of insurance, is not to deny to the company the rights guaranteed to it hy the Federal Constitution prohibiting a State to pass a law impairing the obligation of contracts. That constitutional clause has reference to the legislative powers of the State, and not to the decisions of its courts.
    4. ■-: —-: Revenue Stamp. An oral contract of insurance made in February, 1901, was not invalid simply because a revenue stamp which the United States statute required to be affixed to every contract, could not be attached thereto. That statute did not prohibit the making of oral contracts, nor make invalid written contracts, but simply made it a misdemeanor to fail to stamp such instruments and made them inadmissible in evidence, hut it made them inadmissible only in Federal courts.
    5. -: Builder’s Policy: Ownership of Property. The plaintiff, a contractor, was building a church under a contract by which he was to have the materials of the old building and receive $675 cash, and had received all but $108 due him, and had the property insured, under a builder’s policy, for $750. If the building burned plaintiff was required to rebuild it, and would be entitled to no further payments than were provided for by the original contract. Eeld, that he had an insurable interest in the building, and an instruction which spoke of the building as “the property of the plaintiff” was not erroneous.
    6. -: -: Valued Policy. A builder who holds a builder’s policy on a building which he is constructing for another is entitled to the benefit of the valued policy law of Missouri. The building is a part of the realty, whether he owns the ground on which it stands or not; it is not personalty.
    Appeal from Lincoln Circuit Court.— Hon. H. W. Johnson, Judge.
    Affirmed.

      Norton, Avery db Young and Barclay, Shields db Fauntleroy for appellant.
    (1) Plaintiff pnt in evidence a written contract between defendant and Pace, which fixed and defined the powers of the latter as agent. It did not authorize Pace, as agent for defendant, to make a verbal agreement for insurance. Hence, the alleged agreement, sued upon, was without authority and not binding on defendant. It was error not to instruct for a verdict for defendant on the admitted facts. Trask v. Ins. Co., 53 Mo. App. 625; Embree v. Ins. Co., 62 Mo. App. 132. "Where an agent’s authority is in writing (and is not ostensibly or apparently made larger, by any representation, name or title given him by his principal, of which there is no suggestion or hint or claim in this case) the written powers conferred by the writing' are the only powers the agent may exercise so as to bind his principal. Bank v. Schaumberg, 38 Mo. 228; Ashley v. Bird, 1 Mo. 640. The expression of definite powers given to the agent excludes any other powers not expressed. Baring v. Peirce, 5 W. & S. 548 (40 Am. Dee. 534); Tate v. Evans, 7 Mo. 420; Wheeler v. Givan, 65 Mo. 89; Ashley v. Bird, 1 Mo. 640; State v. Bank, 45 Mo. 538; Hickman v. Green, 123 Mo. 174. (2) The written contract of agency between defendant and Pace fixed the limits of the latter’s powers as agent for defendant, according to the law of Missouri as expounded and construed' by the highest court of Missouri in Bank v. Schaumberg, 38 Mo. 228. No judicial, legislative or executive authority of Missouri (under the Federal Constitution, art. 1, sec. 10; which was expressly invoked on this point by defendant at the trial) has power to impair the obligation of that contract of agency (by enlarging its terms by construction and departing from the rule declared in Bank v. Schaumberg)' so as to impose a greater liability on defendant than said contract of defendant authorized under the decision in Bank v. Schaumberg, aforesaid. Taylor v. Ypsilanti, 105 U. S. 60; Olcott v. Supervisors, 16 "Wall. 678. (3) Under the United States revenue law, concerning-stamps (30 U. S. Stat. at L. p. 448, and following, secs.. 6, 7 and schedule A, sec. 20), contracts of insurance could not be made orally, in the year 1901, because the Federal law required a stamp upon every such contract of insurance. A stamp cannot be placed upon an oral contract of insurance against fire. The United States Constitution and the statutes enacted in pursuance thereof, called the revenue law, are paramount authority. U. S. Const., art. 6.' They control the State law on the subject of insurance, so far as concerns that part of the Federal law which relates to the laying of taxes, in the form of adhesive stamps required to be affixed to insurance contracts.- The Federal law provides a method of collecting Federal revenue for the United States. The State law must yield, if necessary, to the Federal law upon that subject. The United States statute requiring revenue stamps on policies of insurance against fire could easily be evaded and set at naught if verbal contracts of insurance could be made without being stamped. Orily when stamped are such contracts admissible in evidence. Chartiers Co. v. McNamara,, 72 Pa. St. 278; Plessinger v. Dupuy, 25 Ind. 419; Hugus v. Strickler, 19 Iowa 416. The fact that a stamp is required, necessarily and by the clearest implication, forbids the making of an oral agreement for insurance such as plaintiff sets up in this ease, which is in conflict with the stamp act of the United States Government in force in 1901, when the alleged verbal contract of insurance in this case was made. Morgan v. Mather, 2 Yes. Jr. 18; Ins. Co. v. Duffy, 2 Kan. 355. (4) Under the various statutes of Missouri concerning insurance, it is obvious that a verbal contract of insurance is not contemplated or sanctioned by our law on the subject of insurance. The way in which the words “policy” and “policies” appear, in the acts regulating all phases of insurance, demonstrates that a contract of insurance is intended to be made by some form of writing. The Missouri statutes on this point are totally inconsistent with the idea that a verbal contract of insurance is authorized by our Missouri law. R. S. 1899,- secs. 7970, 7971, 7973, 7974, 7975, 7979 ; Laws 1903, p. 209, see. 7972. The Missouri statute requiring a “uniform form of policy” for use by all fire insurance companies in this State, implies that verbal insurance is thereby forbidden as much as if so declared expressly. R. S. 1899, sec. 7979. (5) A “builder’s risk” (the term used in plaintiff’s last policy to describe the nature of the insurance) is a well-known term in the law of this subject. It is an indemnity to protect the interest which a builder has in the structure he is erecting. It does not reach beyond his own interest at the time of the fire. The trial court’s ruling to the contrary was error, both in the admission and exclusion of testimony, and in the giving of instructions for plaintiff numbered 1 and 2. Ins. Co. v. Winsmore, 124 Pa. St. 61; Ins. Co. v. Stinson, 103 U. S. 25. (6) An oral agreement of insurance in Missouri (if valid at all) cannot properly be treated (as it was in this case by the second instruction for plaintiff) as a statutory valued policy under our insurance law, for it does not come within the terms of that law. R. S. 1899, sec. 7969. (7) Plaintiff was admitted to have no interest in the land, and the building was attached permanently thereto, so that whatever interest plaintiff had in the church was, in its nature, personalty, and it was not real property. The valued policy law of Missouri does not apply to personal property, but only to realty, that is, to such buildings as form part of the realty. R. S. 1899, sec. 7969; Trask v. Ins. Co., 53 Mo. App. 625.

      E. B. WoolfoVk and W. A. Dudley for respondent.
    (1) Defendant’s agent Pace had the lawful right under' the terras of his commission to bind the defendant in the parol contract for insurance. King v. Ins. Co., 101 Mo. App. 163; Richards on Insurance, see. 140; Ostrander on Insurance, secs. 13 and 14; I Joyce on Insurance, sec. 525; 1 May on Insurance, sec. 23 d; Lingfelter v. Ins. Co., 19 Mo. App. 252; Vining v. Ins. Co., :89 Mo. App. 311; Channey v. Ins. Co., 62 Mo. App. 45; Duff v. Ins. Co., 56 Mo. App. 355; Eames v. Ins. Co., 94 U. S. 621; Philadelphia Fire Ass’n v. Smith, 59 111. App. 655; Brown v. Ins. Co., 165 Mass. 565; Post v. Ins. Co., 43 Barb. 351; Angelí v. Ins. Co., 59 N. Y. 171; Home Ins. Co. v. Adler, 71 Ala. 516; Ellis v. Ins. Co., •50 N. Y. 402; Bailie v. Ins. Co., 73 Mo. 371; Relief Fire Ins. Co. v. Shaw, 94 H. S. 574; Newark Machine Co. v. Ins. Co., 22 L. R. A. 770. It was impossible to affix internal revenue stamps to a policy that never was written because of the failure and neglect of defendant’s agent to issue the policy in conformity to the terms of its parol contract with plaintiff for the insurance on his building. If the internal revenue stamps "had been omitted from the written and executed policy, Fad defendant complied with its parol contract to issue •the policy, the effect of such omission would in nowise impair the validity of the policy; generally, the provisions of the United States internal revenue laws (including the recent stamp act) have to do with the administration of the law in' Federal or United States courts, and do not apply to the State courts. Knox v. Rossi, 48 L. R. A. 305; Carpenter v. Snelling, 97 Mass. -452; Griffin v. Ranney, 35 Conn. 239; Craig v. Dimock, 47 111. 308; Express Co. v. Haines, 48 111. 248; Twitchell v. Pennsylvania, 7 Wall. 321; Livingston v. Moore, 7 Pet. 482. In the absence of fraudulent intent to evade the provisions of the law, failure to stamp an instrument requiring a stamp does not render it invalid, or inadmissible as evidence in any jurisdiction. Hooper v. Whitaker, 130 Ala. 324; Latham v. Smith, 45 111. 29; Smith v. Nelson, 18 Yt. 511; Wilson v. Carey, 40 Yt. 179; Garland v. Gaines, 73 Conn. 662; Small v. Slocum, 112 Ga. 279 ; Wade v. Fuss, 96 Me. 230; Spoon v. Frumback, 83 Minn. 301. The failure of defendant to issue the policy of insurance against fire and.lighting to plaintiff, with the internal revenue stamps affixed thereto, as the Federal statute provided at the time, will not operate to impair the obligations' of the parol contract made by defendant through its duly authorized agent; with plaintiff, insuring the risk in question,. Small v. Slocum, 112 Ga. 279, 53 L. R. A. 130; Clemens v. Conrad, 19 Mich. 179; Sammons v. Halloway, 21 Mich. 162. The exercise by a court of its legitimate powers-of trying cases and construing contracts in issue before it, is not a matter within the provisions of section 10 of article .1, United States Constitution, prohibiting the “passing of a law” impairing the obligations of contracts. Storrie v. Cortes (Tex.), 38 S. W. 154; Railroad v. McClure, 10 Wall. 511; New Orleans Water Works v. Sugar Refining Co., 125 U. S. 18. (2) All the instructions complained of met the approval of the Court of Appeals in this case (101 Mo. App. 163), and are correct. The whole loss fell on plaintiff. Haynes v. Baptist Church, 88 Mo. 285; Stottlemeyer v. Bobb, 7 Mo. App. 578; 9 Cyc. 627, par. 5, note 67. Plaintiff’s interest was properly declared. Key v. Ins. Co., 101 Mo. App. 344; 1 May on Ins. (3 Ed.), sec. 95-. (3) Oral testimony is primary evidence of agency in these cases, and is as competent as written evidence, when the statute does not expressly require written evidence. R. S. 1899, see. 974; Lungstrass v. Ins. Co., 57 Mo. 107; Brickenridge v. Ins. Co., 87 Mo. 62; Burdick v. Ins. Co., 77 Mo. App. 629; Rosenbaum v. Gilliam, 101 Mo. App. 134; Green v. Worman, 83 Mo. App. 568; Franklin v. Ins. Co., 52 Mo. 461; McGinniss v. Mitchell, 21 Mo. App. 493; Mosby v. Commission Co., 91 Mo. App. 500; Murphy v. Ins. Co., 83 Mo. App. 481; Mechem on Agency, sec. 301. Plaintiff was a stranger to the contract between defendant and its agent and not bound by it under the evidence. Mechem on Agency, sec. 282.
   MARSHALL, J.

— This is an action to recover $750 for the loss of a frame building in Elsberry, Lincoln county, Missouri, that was in process of construction, or reconstruction, for church purposes. The plaintiff recovered a judgment for $748, and after proper steps, the defendant appealed. This is the second judgment in favor of the plaintiff, and the second appeal by the defendant. The former appeal was to the St. Louis Court of Appeals. [King v. Insurance Co., 101 Mo. App. 163.]

The petition, after alleging the character of the defendant, states that on the 7th of February, 1901, John W. Pace was the defendant’s local agent at Elsberry, and was duly authorized and empowered as such agent, “to receive applications, to take risks and insure and make out and deliver policies of insurance on property, for defendant, against loss or damage by fire, and to collect and receive premiums therefor; that on the 7th day of February, 1901, plaintiff applied to said John "W. Pace, agent for defendant, for insurance against loss or damage by fire, upon a one-story frame, shingle-roof building and its foundations, to he occupied as a church when completed, and situated in survey 1724, township 50, range 2 east, in Lincoln county, Missouri, then and until the happening of the loss hereafter mentioned, the property of the plaintiff; that said defendant, on said date, by its agent, agreed and contracted to insure said property for a term of ten days from said date, in the amount of $750, at a premium of two dollars, to he thereafter paid to defendant by plaintiff in a reasonable time, which' sum the plaintiff then and there agreed and became liable to pay defendant, and it was then and there agreed in pursuance to said contract of insurance so made and entered into, and in consideration of the liability so assumed, by plaintiff, to pay tbe premium aforesaid, that defendant would issue and deliver to plaintiff an insurance policy binding said defendant to pay plaintiff all such, loss or damages, as plaintiff might sustain by reason of injuries to or tbe destruction of tbe property above described, by fire, within said term of ten days, to tbe amount of $750.” . •

Tbe petition then alleges tbe destruction of tbe building by fire, on tbe 9th of February, 1901; tbe attempt to make proof of loss and tbe tender of tbe premium on tbe 12th of February, 1901, together with an averment that tbe plaintiff bad performed all of tbe conditions of tbe contract, on bis part to be performed. Tbe answer is a general denial.

Tbe case made is this:

Tbe plaintiff is a contractor and was engaged in tbe construction or reconstruction of ..a building for church purposes, under a contract and specifications, which required him to build and complete a church building in accordance with tbe plans and specifications, and subject to tbe approval and acceptance of tbe church committee; and in consideration therefor be was to receive tbe materials in tbe old building on tbe premises, valued at four hundred to four hundred 'and eighty dollars, and six hundred and seventy-five dollars cash. Tbe plaintiff bad given a bond for $1,000 for tbe performance of bis contract. While so engaged in tbe work, tbe plaintiff, on tbe 9th of February, applied for and received from tbe defendant a policy of insurance on the-building, for $750, for a term of sixty days from its date, to-wit, until tbe 7th of January, 1901. On tbe 7th of January, 1901, and before tbe expiration of tbe policy, tbe plaintiff procured from defendant another policy for like amount, insuring the building for a further term of thirty days from tbe 7th of January, and to expire at noon on tbe 7th of February, 1901. This policy contained the following provision: “$750 on the one-story, frame, shingle-roof building and its foundation to be occupied as a church when completed (builder’s risk) and situated in survey 1724, township 51, range 2 east, Lincoln county, Missouri.”

• The plaintiff paid the premiums required by the defendant for said policies, to-wit, $4.50- for the first policy, and $3 for the second. All of the plaintiff’s dealings were had with John W. Pace, the defendant’s agent at Elsberry. Pace was acting under a written commission or appointment as agent of the defendant, which recited the appointment of Pace, as agent, “with full power to receive proposals for insurance against loss and damage by fire, in Elsberry, Missouri, and vicinity, to fix rates of premiums, to receive moneys, and to countersign, issue, renew and consent to the transfer of policies of insurance signed by the president and the secretary of the said Phoenix -Insurance Company, subject to the rules and regulations of the said company, and to such instructions as may from time to time be given by its officers. ” No rules or regulations or instructions were-introduced in evidence in this case. On February 7th, before 12 o’clock noon, and before the expiration of the second policy, the plaintiff notified Pace that he had been unable to complete the building at that time, and applied to him for insurance on the building for a like amount, and on the same terms as the last policy. Pace asked him how long he wanted the insurance to run. The plaintiff replied that he would like to have it for five or six days, and asked Pace what limit of time he could write a policy for, saying that he did not care to carry the policy any further than was necessary for him to complete the building. Pace replied that he could write a policy for as short a time as five days. The plaintiff replied that he could not get the building done in five days. Thereupon Pace said he would write a policy for ten days and charge $2.25 •premium therefor. Plaintiff objected to the rate of premium, with the result that Pace agreed to charge-only $2 premium. The plaintiff accepted the proposition and said to Pace, “Don’t fail to have this policy at 12 o’clock.” Pace replied that when he told a man anything he could depend on it. Nothing was said, about the payment of the $2 premium. Prior to that time plaintiff had not been required to pay the preium on the two other policies at the- time he applied!, for them, or when they were issued, hut had paid them thereafter, Pace saying that it did not make any difference about paying the money at the time, but that it could be paid at 1 ‘ any time in the run of the policy,, so I can make my report, will do. ” On this understanding the plaintiff left and heard nothing more about the-matter until after the 9th of February, when the fire occurred. The second policy, which expired on the 7th of February, had never been delivered to the plaintiff but had remained in Pace’s hands.

The defendant objected to all the testimony relating to the insurance for ten days last aforesaid, on the-ground, first, that the stamp act of the United States, then in force, required a United States revenue stamp to be fixed on all policies of insurance, and that under article 6 of the Federal Constitution the effect of the Constitution and revenue laws of the United' States is to require every fire insurance risk and contract to be expressed in the form of policies and in writing; second, because insurance contracts,, under the laws of Missouri, must be in writing; third, because, under the terms of the commission of appointment, Pace had no power to make any oral contract of insurance, and that it would impair the obligation of said contract between Pace and the defendant if the-courts of Missouri should bind defendant by the oral contract, and that such a declaration of law by the courts of Missouri would violate article 1, section 10, of the Federal Constitution, which prohibits any State to pass any law impairing the obligation of contracts-The court overruled the objection, ■ and defendant now assigns that ruling as the principal error in the case.

The defendant also offered testimony tending to prove that the amount of the plaintiff’s interest in the building at the time the fire occurred was only $108. On the objection of the plaintiff the court excluded the -evidence, and this is assigned as error. Error is also assigned as to certain instructions given for the plaintiff, which will be noticed in the course of the opinion.

I.

■The first question that is presented for adjudication in this case is whether or not an oral contract of insurance is valid.

This question first came before this court in Henning v. Insurance Co., 47 Mo. 425. Wagner, J., delivering the opinion of the court, held that “at common law there is nothing absolutely requiring that the contract should be in writing.” After stating that there was much disagreement in the books as to the power of insurance companies to make contracts of insurance by parol, and after reviewing a number of cases bearing on the subject, and saying that the court would be strongly inclined to follow the rule laid down in most ■of the cases cited which held that a parol contract of insurance was good, the learned judge then quoted from the act incorporating the defendant company, which declared that “all the conditions of policies issued by said company shall be printed or written on the face thereof,” and that authority had been given the company to make by-laws, one of which required the president to sign all policies or contracts by which the company was to be bound, and another required every proposal for insurance to be by written application, signed by the applicant or his agent, and concluded, that, by virtue of the act of incorporation, and the by-laws referred to, “there could be no original and binding contract by parol,” as to the defendant company.

The question came again before this court in Baile v. Insurance Co., 73 Mo. 371. That was a suit in equity to enforce a verbal agreement to issue a policy of insurance. The defense was that the defendant could only be liable for a written or printed policy, signed by the president and attested by the secretary, and that no verbal contract of insurance was binding on the defendant under its charter, and the laws of this State. The court said:

‘ ‘ The validity of the contract is the first point demanding attention. The charter of the defendant company is that furnished by the general laws. [Chap. 67, Gen. St. 1865, p. 353.] The concluding words of section 1 of that chapter require that the ‘conditions of all policies issued by such company shall be written or printed on the face thereof; ’ and section 8 of the same chapter provides that ‘ all policies and contracts of insurance and instruments of guaranty, made by said company, shall be subscribed by the president, or president pro tempore, and attested by the secretary/ Similar language to that just quoted was passed upon by this court in Henning v. U. S. Ins. Co., 47 Mo. 425, and it was held that with such a charter and by-laws, the company could make no original and binding oral contract of insurance. In that case, however, section 6 of chapter 62, General Statutes 1865-, was overlooked. That section, which has been on the statute books for over thirty-five years (Stat. 1845, p. 232, sec. 8) provides that: ‘Parol contracts may be binding on aggregate corporations, if made by an agent, duly authorized by a corporate vote, or under the general regulations of the corporation, and contracts may be implied on the part of such corporations, from their corporate acts, or those of an agent whose powers are of a general character.'[That section is now sec. 974, R. S. 1899.] Passing upon the effect of this section it was held in the circuit court of the United States for the Eastern District of Missouri,, in an action between the forementioned parties, that, construed in the light of the general law, the charter of the insurance company did not disable it from making a binding contract of insurance without writing. [Henning v. U. S. Ins. Co., 2 Dillon C. C. 26,]
‘ ‘ This view is certainly the better one, even where there is no such general provision as that above quoted, making oral contracts of aggregate corporations valid. It must now be considered as the well-settled doctrine by the nearly universal concurrence of the authorities that oral agreements of insurance are enforcible, although the charter of the company contains similar provisions to those contained in chapter 67, supra. The principle underlying these doctrines is this: That the right to make contracts of insurance, like any other right of contracting, exists as at common law, unless prohibited by statute; that the contract of insurance having its origin in mercantile law and usage, the distinction which denies the power to enter into such a contract, except in particular mode's and forms, is without foundation and repugnant to, and inconsistent with, that general capacity of contracting which the common law concedes to every person ordinarily competent to enter into binding engagements; that the provisions of a charter of a company that they shall have the right to make contracts of insurance by the signature of a president, etc., are regarded by the courts as merely enabling and not restrictive of the general power to effect contracts in any other mode not unlawful, dictated by convenience; and that ‘the distinction between a contract to insure or to issue a policy of insurance, and the policy itself, is obvious and constantly recognized by the courts. ’ [May on Ins., secs. 14, 22, 23, 128; Kelly v. Commonwealth Ins. Co., 10 Bosw. 82; Sanborn v. Firemen’s Ins. Co., 16 Gray 448; Trustees v. Brooklyn Fire Ins. Co., 19 N. Y. 305; Relief Fire Ins. Co. v. Shaw, 94 U. S. 574; New England, etc., v. Robinson, 25 Ind. 536; 56 Mo. 371; Henning v. Ins. Co., supra.]
“In view, however, of the broad statutory provisions heretofore cited, relating to the power of aggregate corporations to contract orally, all difficulty as to the power to make, in the present circumstances, an oral contract of insurance, vanishes. Besides this, section 8, supra, requiring the signature of the president, etc., uses no prohibitory words; relates not to agreements to insure, but only to policies when completed and ready for official signature. It is unnecessary to the proper determination of this case' that the one already cited from our own reports, and greatly relied on by defendant, be overruled; but it is not unworthy of remark, that the utterances in that case were, for the most part, almost, if not altogether, obiter, since therein it is distinctly asserted that the contract in that instance was ‘ nothing but a naked verbal agreement . sued upon. This is denied, and there is no proof of it.’ So that that case could have been very briefly disposed of, as having no evidential foundation requiring either judicial discussion or determination. Be that as it may, the doctrine announced in that case does not dominate this one, for the reason that that case was a suit at law on an alleged oral and completed agreement; this is a proceeding in equity to compel that to be done which already upon sufficient consideration had been agreed should be done. And the case under discussion expressly recognizes the principle announced in Commercial Ins. Co. v. Union Mutual Ins. Co., 19 How. 319, as well as in numerous other cases cited by plaintiffs, that equity will specifically enforce 1 agreements to make insurance.’ ”

Baile v. Ins. Co., supra, has since been cited and approved, and the doctrine announced that, unless prohibited by statute, a corporation has all the rights of contracting, under the common law, that an individual has. [Liebke v. Knapp, 79 Mo. l. c. 24; Railroad v. Railroad, 135 Mo. l. c. 200; State ex inf. v. Lincoln Trust Co., 144 Mo. l. c. 592.] In the case last cited it was said: “Corporations, when they are not restrained in any particular manner by their charters, may adopt all reasonable means in the execution of their business which a natural person may adopt in the exercise of similar powers.”

The same doctrine was taken as settled law in this State in Duff v. Fire Assn., 129 Mo. 460.

Thus it will appear that the rule laid down in the Henning case, supra, has not been followed in this State since, but that, as pointed out in the Baile case, the statutes of this State (now sec. 974, R. S. 1899) ■expressly provide that parol contracts may be binding upon aggregate corporations if made by an agent authorized to contract, and contracts may be implied on the part of such corporations from their corporate acts, or those of an agent whose powers are of a general ■character. In fact while the Henning case was not expressly overruled in the Baile case, because it was not ■essential to the decision of that case that it should be overruled, nevertheless, it was distinctly pointed out in the Baile case that the learned judge who delivered "the opinion in the Henning case had overlooked the-express statute of the State, and it was further pointed out that the correct doctrine announced by the great weight of authority is that parol contracts of insurance are valid, unless expressly prohibited by statute. The rule thus announced in this State is in harmony with and amply supported by the great weight of modern ¡authority. In 16 Am. and Eng. Ency. Law (2 Ed.), 852, it is said: ‘ ‘ The contract is sometimes evidenced by a binding slip signed by the insurer’s agent, or by a memorandum in his record book, but neither the Statute of Frauds nor public policy requires it to be in writing, and it is equally valid if made orally. ’ ’ Decisions from the Supreme Court of the Hnited States, and from the Supreme Courts of Alabama, Illinois, Indiana, Iowa, Nansas, Maine, Massachusetts, Minnesota, Missouri, Nebraska, New York, Ohio, Oregon, Pennsylvania, South Carolina and Wisconsin are cited in the note to the text sustaining that doctrine.

The same rule is announced by the text-writers. Joyce on Insurance, vol. 1, sec. 525, says: “As we have stated in a preceding chapter, the company may be bound by an oral contract of insurance, or an oral agreement to insure; so an agent entrusted with blank policies, signed by the president and secretary, with authority to negotiate, fill up, and issue the same, may bind the company by a parol contract to insure, and an agent authorized to make the necessary surveys, and negotiate and conclude all the terms of the contract, and to fill up and countersign the policy, may bind the company by a parol contract to issue a policy..... And a local agent of a foreign company, with similar authority, may bind the company by parol to contracts of original or renewal insurance.”

’ Richards on Insurance, sec. 41, lays down the rule as follows: “An oral contract of insurance or an oral contract to issue a policy is valid, unless prohibited by' statute, as by the civil code of Georgia, or sometimes by stamp laws, and will be binding from the time the oral contract is completed, although the loss occur before the policy is issued. The Statute of Frauds is not applicable; and, although the charter of a company provides that the contract of insurance must be in writing, this requirement is, by most courts, held to be a direction to the company, and not binding upon an innocent party, who has parted with value to the company in good faith under an oral contract.”

May on Insurance (4 Ed.), vol. 1, sec. 23d, says: ‘ ‘ On principle it would seem that at common law there could be no objection to an oral contract to make an insurance in future; or to issue a policy at a time named, or within a reasonable time, holding the applicant insured meanwhile (this is the usual agreement); or to insure now, making the full contract by parol, without any expectation of a policy. So far the law is clear when the contracting parties are natural persons, and', there is no statute in the way. But when a corporation-makes the contract, or a statute enters the question, the-problem is not so simple. Unless prevented by the charter a company may make valid oral insurance policies.” Citing Henning v. Insurance Co., 47 Mo. 425, which, as above shown, is no longer the law in Missouri. But the rule is that, unless prevented by statute, a corporation has the same right to contract that an in-dividuál has, under the common law, and that, under the statute of this State, parol contracts of corporations are binding on the corporation if made by the corporation, or by an authorized agent, and that such contracts may be implied from the corporate acts, or those of the agent whose powers are of a general character; and that the provisions of the charter or by-laws, requiring the signature of the president to all policies of insurance, and using no prohibitory words, do not prevent the making of oral contracts.

There was, therefore, no error in the ruling of the trial court in admitting the evidence tending to prove an oral contract of insurance.

II.

It is contended, however, that such a construction of the law impairs the obligation of the contract between the company and its agent, in that, under the written appointment of the agent, he had no power to enter into an oral contract of insurance, and that, therefore, the rights of the defendant, guaranteed by section 10 of article 1 of the Federal Constitution, would be denied the defendant.

This contention is untenable. The modern rule is that “in order to come within the provisions of the Constitution of the United States, which declares that no State shall pass any law impairing the obligation of contracts, not only must the obligation of the contract be impaired, but it must have been impaired by some act of the legislative power of the State, and not by a decision of its judicial department only.” [Sedalia to use v. Donohue, 190 Mo. l. c. 417, and cases cited.]

III.

It is next contended that at the time this contract was entered into, the Federal stamp act required all contracts of insurance to have an internal revenue stamp fixed thereto. [30 U. S. Stat. at Large, p. 448, et seq.] And it is argued that as the stamp cannot be fixed to an oral contract, it would enable parties to evade the stamp act and defraud the Government, by permitting oral contracts of insurance to be made, and therefore the oral contract relied on in this case was invalid.

Section 7 of the stamp act provides as follows:

“That if any person or persons shall make, sign or issue, or cause to be made, signed or issued, any instrument, document, or paper of any kind or description whatsoever, without the same being duly stamped for denoting the tax hereby imposed thereon, or without having thereupon an adhesive stamp to denote such tax, such person or persons shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not more than one hundred dollars, at the discretion of the court, and such instrument, document, or paper, as aforesaid, shall not be competent evidence in any court.”

It is a sufficient answer to the contention to say that the literal wording of that statute is that the failure to stamp such instrument document or paper is made a misdemeanor and the document is inadmissible as evidence, but in this case there was no such instrument made, and none such is offered in evidence, and the statute does not prohibit the making of oral contracts, such as, under the common law, every person and every corporation has the right to make, under the laws of this State, and under the laws of the United States.

In addition thereto it has been held that under the act the instrument may be received in evidence, unless it be shown that the omission to stamp it was with the intent to evade payment of the revenue, and that in the absence of such showing the instrument or contract is not void. [Hooper v. Whitaker, 130 Ala. 324; Small v. Slocumb, 112 Ga. 279.] In the case last cited it was held that while Congress had the power to require revenue stamps to be placed on written instruments, and to prescribe a punishment for the failure or refusal to comply with that requirement, and to require that such instruments, unless stamped, should not be. admissible as evidence in the Federal courts, it had no power to prescribe rules of evidence for the State courts, and, therefore, the act which declared that such instruments should not be received in evidence in any court until stamped, is to be understood as applicable to the Federal courts only. To the same effect are Wade v. Foss, 96 Maine 230; Clemens v. Conrad, 19 Mich. 170; Sammons v. Halloway, 21 Mich. 162; Wilson v. Carey, 40 Vt. 179; Garland v. Gaines, 73 Conn. 662; Latham v. Smith, 45 Ill. 29.

IY.

It is contended that Pace had no authority, under his written appointment, to make an oral contract, but that his power was limited, “to fix rates of premium, to - receive moneys, and to countersign, issue, renew and consent to the transfer of policies of insurance, signed by the president or the secretary” of the defendant.

As hereinbefore pointed out, where an agent is entrusted with blank policies signed by the president and secretary of the company, with authority to negotiate, fill up and issue the same, he may bind the company by an oral contract to insure. [1 Joyce on Ins., sec. 525.] But even under the strictest construction of his appointment, the act of Pace, in this instance, may he regarded, under the facts in judgment, as a mere renewal of the contract that was to expire on the 7th of February at noon, and there are no rules, regulations or instructions of the company in this regard, tending to show that the agent had no power to renew a policy of insurance by a verbal agreement, and for consideration.

Y.

The St. Louis Court of Appeals reversed the former judgment in this case, because, after the plaintiff had introduced the deposition of Pace denying that he had authority to make a contract of insurance for ten days, the plaintiff introduced evidence of statements made by Pace, after the loss, tending to show that he had such authority and it was held by the St. Louis Oourt of Appeals that such statements were inadmissible, because they were not a part of the res gestae of the business Pace was transacting, and also because they tended to contradict the testimony of Pace, who was plaintiff’s witness.

It is now insisted that on the trial anew, the plaintiff fell into “the same old error.” The record discloses, however, that on this trial the plaintiff did not introduce the deposition of Pace, nor did he call Pace as a witness. It is true the plaintiff had formerly taken Pace’s deposition, but he did not introduce it in this case. The record shows that in rebuttal, the plaintiff was called and asked whether or not Pace, the agent, or anybody else, had told him at any time that a policy could not be made for less than ten days. This was objected to on the ground, among others, that the plaintiff was thereby seeking to contradict Pace’s testimony, and that the plaintiff could not do so because the plaintiff had taken Pace’s deposition, although the plaintiff had not used it, and it had not, up to that time, been introduced in evidence by either'party. The objection was overruled, and the witness answered that he had no such knowledge. Thereupon, on cross-examination, it was proved that the plaintiff had called Pace as a witness on the former trial, and over the objection of the plaintiff the defendant introduced the bill of exceptions preserving the testimony of Pace on the former trial, and also introduced the deposition of Pace, which had been previously taken by the plaintiff.

It is plain, therefore, that in this case the plaintiff was not guilty of the error for which the St. Louis Court of Appeals reversed the former judgment. Here the plaintiff did not call Pace at all, and, therefore, the evidence admitted did not tend to contradict anything Pace had said, for up to that time Pace had not spoken either in person or by deposition, on this trial. Neither did the plaintiff, on this trial, introduce testimony as to statements made by Pace after the fire occurred.

VI.

The first instruction is claimed to be erroneous, because it speaks of the building insured as “the property of the plaintiff.” And it is argued that it was not the property of the plaintiff, because he had only $108 interest in it. The policy was a builder’s policy. The contract required the plaintiff to take down the old building, and to furnish the church a complete building in consideration of the materials that came out of the old building, and $675 cash. The fact, if it be a fact, that the plaintiff had received all but $108 on the contract price, would not deprive him of an insurable interest in the building, for if the building was destroyed the plaintiff would have to rebuild it, and he would not be entitled to any further payments than were provided by the original contract. The plaintiff, therefore, had an insurable interest in the building; and the building was a part of the realty, and hence the plaintiff had, at least, a qualified interest in the realty. [16 Am. and Eng. Ency. Law (2 Ed.), 846.]

VII.

The second instruction for plaintiff is claimed to-be erroneous because it gave the plaintiff the benefit of the valued policy law of Missouri. [Sec. 7969, R. S-1899.] That instruction told the jury that although they might believe from the evidence that the building in question did not stand on premises owned by the-plaintiff, yet if they believed that the plaintiff had contracted with the agent or building committee of the owners of the • property to build a complete church building upon the premises, and turn the same over to the owners when completed and accepted by them, and that, at the time of the fire, said building had not been accepted by and turned over to them, then the plaintiff had such ownership or interest in said building as entitled him to insure the same and collect the insurance under the conditions mentioned in instruction 1 given for the plaintiff in this case.

It is claimed that the instruction is erroneous because the interest the plaintiff had was simply an interest in personalty, and that the valued policy law does not apply to personalty, but only to realty. This objection is more technical than real. The interest the plaintiff had was a builder’s interest. That interest was in the building that was attached to the land, and was therefore a part of the land. True the building might be destroyed by fire, while the land could not; hence the necessity for insuring against loss by fire during the construction of the building. But the building was none the less a part of the realty because it might be destroyed by fire, like personalty may be destroyed by fire. The same argument might be applied to insurance on a building taken out by the owner of' the land on which the building stood. Yet the valued policy law applies to the buildings on the land and not to the land itself, and no good reason is perceived, or has been suggested, why there should he any difference in the application of the valued policy law to a policy taken out by the owner of the land and where the policy is taken out by the builder. The building is as much personalty to the one as it is to the other.

For the foregoing reasons the judgment of the circuit court is affirmed.

All concur.