Smersh v. Brown
Smersh v. Brown
Opinion of the Court
Appeal from an order allowing a claim of the Owatonna Medicine Cabinet Company against the Owatonna Drug Company, a corporation now in the hands of a receiver. The appellant is president and a stockholder of the drug company.
The claimants had furnished the drug company with a preparation known as Gentian Compound. The claim was based on a ledger account and a promissory note of $1,200, dated June 24, 1921, representing the balance due on the account. The account contains charges entered between September 8, 1920, and March 17, 1921, aggregating $1,356, and credits entered June 24, 1921, amounting to $156.
The evidénce showed the following method of doing business: When the drug company placed an order for the compound, sales slips would be made out in triplicate. When delivery was made, one of the slips was given to the drug company and two were retained by claimants, one for their own use and the other for the United States revenue officers, to whom reports of the sales had to be made.
Evidence was introduced showing that all sales prior to September 8 were for cash, payment being made on delivery. After that date cash was paid on delivery in some instances and in all other instances charges were entered in the ledger account, which was kept to show only the sales on credit.
To defeat the claim, eleven checks were introduced in evidence. They aggregate $1,904.37, were issued by Emil S. Kubat, as secretary of the drug company, and were made payable to the cabinet company. The first of these checks is dated October 4, 1920, and
There was evidence showing that when the note was given all sale slips which had not been paid were taken up and delivered to Kubat in exchange for the note, but neither party produced any slips issued at any time in the course of their dealings, and we are left to infer that they had been destroyed. Neither party could produce any record of any of the transactions between them except the ledger account and the note. Counsel for appellant contend that the evidence- fairly shows that the checks in evidence paid for all of the compound their client received during the period covered by the ledger account. They urge that it is unbelievable that, in addition to the large quantity of the compound charged for in the account, an even greater quantity was delivered during thé same period and paid for by these checks. Both parties were careless in keeping track of the sales, the deliveries and the payments, but one fact stands out prominently and is not directly disputed. When the note was given, Kubat, representing the drug company, went over the account with claimants to ascertain the amount of the indebtedness then existing, and after this was done he executed the note. That he would give a note for a debt which had been .paid or was fictitious is not believable under the showing made at the trial. Suspicion and the absence of more satisfactory evidence of the existence of an indebtedness do not take the place of affirmative evidence of misconduct on the part of an officer of a corporation whom it has placed in charge of its business affairs. It is conceded that Kubat had no authority to execute notes in behalf of the company, but the note was nevertheless competent evidence to establish a stated account. In that respect it must be given the same effect as a check issued but not delivered. Behrens v. Kruse, 132 Minn. 69, 155 N. W. 1065, 156 N. W. 1. See also 1 C. J. 690.
In this connection it is urged that, if the account is correct, the claim should have been allowed in full. It was allowed at $936. It
The order is therefore affirmed.
Reference
- Full Case Name
- IN RE OWATONNA DRUG COMPANY. F. M. SMERSH v. HARRY T. BROWN AND ANOTHER
- Status
- Published