*1 §1 making tage election from place instead, submitting, to transfer He Baltimore. other than confinement has choice and freely exercised complaint. basis Court judgment of District
affirmed.
Affirmed. INSURANCE
AMERICAN NATIONAL GALVESTON, TEX- OF COMPANY Greer, Appellants, E. AS W.
v. Appellees. al.,
Leo E. MURRAY et
No. 23077. Appeals States Court of
United Fifth Circuit.
Sept. 1967.
Rehearing Denied 1967. Nov. *2 discharg-
the note had been satisfied and court, therefore, The ed. entered sum- mary judgments in of favor of all excepting only Rogers, defendants him- self, and on bank which the check had been drawn. We hold that the moving defendants entitled to judgment law, as a of matter because genuine there remained issues as to ma- 56(c), terial facts. Rule Fed.R.Civ.P. making American has been loans in Mississippi operated since 1928. It has through Rogers in agent, the State applications who solicited then and sub- mitted them to American’s offices for approval. instances, Rogers In some col- payments lected for American and re- mitted these less own commission to specific American. There was no oral agreement or written between American Jr., W. Goodman, Elizabeth F. Rogers’ and William and check of appellants, Miss., Jackson, Grayson, for books was ever made American. Tex., Galveston, Greer, Dibrell, & Dibrell On June a loan to Zurich Miss., Jackson, of Eager, Watkins & (hereafter Zurich) Inc. counsel. by American; Rogers made ap- took Dunn, Wells, S. Vardaman W. Erskine plication, but it to submitted American’s Young, Barksdale, Henry Leon James E. Galveston, Texas, office in where the Young & Miss., appellees, Jackson, approved. debt, transaction was evi- Wells, Lipscomb, Young, Wells, & Thomas note, denced a was secured a deed Clark, Cox, Steen, & Dunn & Barksdale realty of Jackson, trust on Zurich’s Jackson, Miss., of counsel. Mississippi, assignment and an of rents property. Although income from the RIVES, GOD- GEWIN Before payable monthly the note was install- Judges. BOLD, Circuit ments, typed provision, contained follows: Judge: RIVES, Circuit (a) privilege “Thе Makers reserve dispositive common issue paying, of in addition to the install- appellees- appellants-plaintiffs to the provided, ments above the sum or sums $68,- payment of defendants is whether equal original principal 20% Rogers and Com- to Richard C. 659.94 during any year, of this note calendar Rogers), (hereafter pany prior expiration years to the of three hereof, privilege from date which shall (hereafter Galveston, Ameri- Texas of noncumulative; (b) privilege binding upon not- can), paying of amounts in of excess 20% knowledge
withstanding of its lack provided premium paid on 2% Rogers em- fact that and the payments; priv- (c) such excess opin- money. Upon a letter bezzled the ilege making payments in addition answering the affirma- issue in ion regular installments ex- after Ameri- tive, held district court piration years of three from date here- promissory the deed note and can’s seсuring premium.” assignment without of rents trust trust, recorded, permitting prepayment deed provision which was or in 1. This assignment rents. not included indebtedness was pro- addition, paragraph a letter dated Zurich received another : vided signed 3,1959, indicat- K.” “G. principal and “All installments were to be * * * payable at the of- terest are Rogers. conferred Jackson, payee Mississip- fice *3 letter, Rogers, primarily consti- this pi, place the holder or at such other principal this case. issue of tutes writing.” may designate in hereof follows: The read as letter provided note it to be con- according strued to the laws of Missis-
sippi. CO.
“AMERICAN NATIONAL INSURANCE Moody Market at Street Avenue
Galveston, Texas
August 3, 1959 Inc.
“Zurich Rogers Company C. Richard
c/o P. O. Box 1653 5, Mississippi
Jackson, 12462
Loan No. assigned loan, your with the caption to has “The been number being monthly payments as follows: the due date and amount of Payment Due Date Amount of 1,1959 monthly August thereafter. and
$664.00 “The will serviced loan Rogers &
Richard C. 1653
P. BoxO. 5, Mississippi
Jackson company, payments you are notified this “Unless otherwise pay- representative, and such should be made to the above-named payment ment American National will constitute Company. cooperative you times, and will find them at all “We are confident satisfactory. mutually relationship
we trust will be truly yours, “Very G.K. /s/ Mortgage Department.” Loan very receiving August and handle loan in a this let- satis- before On factory monthly 1962 ter, manner.” October First the first Zurich had sent Savings Federal and Loan Association in Galvеs- office to American’s (hereafter Federal), First in order check Zurich’s ton. American returned permit prop- August it to a new loan on the di- make dated 11 which with letter erty, attempted prepay the entire bal- all remittances to “send rected Zurich Rogers concerning ob- correspondence ance. It first wrote and this loan giving Company. I tained a letter balance due am to Richard C. you cooperative the loan. A number of documents find them most will sure 84 including Federal, American, over to First not contain turned the seal of refinancing accompanied was not letter. resolution of attorney, who Federal’s American’s
handled First Board of at- Directors. torney and did did relied on the not check the record himself, Federal’s cancellation had see the letter. another dividual, attorney $68,659.94 attorney, is- had a check an it. The check Murray jointly Rich- note and “Leo E. deed of trust undisturb- sued remain Agent Company, custody. C. ard American’s of Gal- Insurance Co. American National During period, most of this Murray veston, endorsed Texas.” significant money had a amount of in his it personally check and delivered bank received accounts. Had American acknowledg- Rogers. Rogers wrote loan, notice of *4 receipt letter to of the check likely that or all some the embezzled attorney, Federal’s as follows: money could have been from recovered Rogers. acknowledge receipt of “This will 19539, your amount No. in the check 1963, In American noticed 1, $68,659.94 dated October and that Zurich was three installments be- acknowledge re- 1962. This will also payments. however, Rogers, in its hind form, ‘Authority ceipt of to Cancel’ an Murray had called and told him that properly executed which we will have accounting snag there was in the ma- you weeks. and rеturned within two to worry chines not and about de- payment might note mand for arrive. forward cancelled “We will Murray directly Mur- if Mr. left town and instructed that and deed of trust ray arrived, that a letter from American for his records. done, Rogers. be delivered to This was you anything from need further “If Rogers paid and American amount matter, us in with this connection delinquent of the installments. please let us know. 1963, sent late American December “Sincerely yours, asking a letter to Zurich for confirma- Rogers Richard C. /s/ tion of the balance shown on its books. Rogers” C. Richard Moore, Zurich, one of said the owners that the letter Not was never received. Rogers “Es- deposited in an the check February until did learn in the First crow Account” prepayment Rogers in made to of the Bank, Jackson, Mississippi. The check 1962.2 October “Agent Ameri- not as was endorsed Company.” cancelled I. returned, inquiry was but no check was holding The distriсt court erred concerning made endorsement. fact, genuine no issue there was “Authority never re- to Cancel” form was validly to an made was attorney nor turned to First Federal’s authority agent of American who had of trust were the note and deed cancelled entire amount receive Murray Rogers’ forwarded remaining indebtedness. promised. De- had Between October and Among a lack other evidence attorney several сember made authority Amer- an affidavit of such was quiries of “anxious.” and became Rogers’ au- officer ican’s executive not, however, di- He did contact American submitting appli- thority limited to was rectly. approved disap- for loans to be cations ap- proved On some but American. On March cancellation loans, Rogers original approved acted though peared of such record,” all “of monthly servicing by collecting evidence. has not introduced been transmitting them forgery, and This, clear, did it is was a now company than from defendants. rather insurance came from title That information 2. usually affidavits at- has read the “Affiant does American. Defend- the Motion of these tached to privileges. Its form grant prepayment Summary Judgment de- provi- ants for no such promissory contains note practices re- nies that the custom and instance, privilege was In this sion. аny general (sic) ferred to therein The affidavit typed note. into the form practice where borrowers custom continued: prepaying loan out of a new are loans Inc. was Zurich “The loan to practice exceptional and that Rogers or C. Richard one loan where strictly where: limited to instances Richard C. C. Richard d/b/a agent actually (1) servicing authorized to was & payee note loan and in the was monthly installments and collect (2) Trust, as- and Deed of He had Plaintiff. the same to signor remit of the and Deed of Trust note responsibility from Ameri- no whatsoever had substantial financial any prepayment large corporate knowl- can National to collect assets to the lender, edge principal. Plaintiff In fact while new borrower or (3) assignor operating states time in 35 the note and at that correspondent state au- Deed of Trust had an actual сontract or its it to collect with the holder of the and Deed of thorized note *5 principal authorizing prepayments prepay- of of Trust own name it to collect why large patent principal reasons of loan. There are ment of a amounts making company not and loans would a which said contract could be and was agent servicing a not authorize exhibited to borrowers or their attor- could neys upon request sub- in his or its own name the to collect existence prepayments the of of balance of stantial which contract known to and was by principal of The authorization on due. relied borrowers or their attor- monthly neys. present installments was collection of None of these facts are relatively by payments in that such collections If safe here. are made bor- relatively by small amount of a rowers or lenders check made involved new only agent money, payable servicing of the installment the due date to a with- company delivery and there- out known to the immediate of the note and was Trust, remittance due fore the date the cancellation of of the Deed by servicing agent company the borrower or lender is himself re- the new company lying entirely to the and if the was known on the credit and finan- immediately standing servicing agent not received cial same were agent. quiry check could be made and his own and/or pay- or if the the loan either foreclosed “That a as matter fact there is agent ments had been knowledge and was not to of Plain- agent could be im- remitted the any general tiff custom of consummat- by legal mediately required, process, if ing prepayment of loans in manner necessary, to make remittance. On set out referred to. affidavits hand, in the casе of an the other op- # * *» might prepay company tion to have supporting There knowledge were other affida- or notice of desire no negatived option pay- vits. These affidavits are said and the to exercise Rogers’ the written au- evidences of in a substantial amount ments would be thority, August that beyond is the letter of the amounts with which the 3, 1959, supplemented by willing company the letter of to trust be a would August 11,1959. payments servicing The to which and unless informed specifically the letters company referred iden- would were have the borrower given by tified both notice, amount and due the serv- date. save that no They monthly payments any, attempted were icing agent, if of such True, August opportunity prepayment letter $664.00. 3 (sic). stated that “The loan will be serviced or thereasto check thereon “servicing” Rogers. termined on its merits. That is whether includ- by” Whether Rogers’ conduct and omissions subsе- the en- acceptance prepayment of of a quent $68,- subject receipt to his of the check for loan was tire balance of a 659.94, also, facts and circumstances disputing True and the affidavits. knowledge “you which came to the or notice that 11 directed letter attorneys of the or their defendants cor- send all remittances should put concerning such as to them on notice respondence Rich- this loan tо prepay- had not ment, Rogers Company.” American of the advised word C. ard they and whether then can under con- letter must be as used in that “all” duty specific so American and lia- advise are with the in connection strued resulting proximately ble loss to the in the reference perform duty. from a failure monthly In that of $664.00. light, as a matter of be said cannot governing un law such an that “all” referred law usual situation seems to be uncertain. privilege other than the or included general is rule that the fact that one regular monthly payments. realizes or should realize that on action by the tes- Under the facts disclosed part necessary his protection another’s aid agent, timony paying First Fed- of the impose upon not of itself does admitting attorney, candidly re- eral’s duty him a to take such action. Restate August 3, 1959, on liance the letter ment are, Torts 2d 314.3 There § how that he had not seen and lettеr, ever, times and occasions when the rela summary judg- clear it is tionship parties particular or the any theory upheld on cannot ments may impose upon circumstances party authority. apparent or ostensible Under speak rather than to si remain testimony, attorney’s there no re- respect lent in of facts within his knowl authority any apparent liance Rogers edge party ign and of which another grant- in excess of the *6 оrant.4 August Steen 3. See the letter of duty It person is the of a 694, Andrews, 1955, 223 Miss. 78 So. V. person, make to another to whom he holds (Second) 883; 881, 2d ALI Restatement fiduciary a trust or relationship, a full c; Agency 8, Am.Jur.2d, Comment 3 § disclosure of and all material facts Agency 75.§ knowledge, within his and of which he genuine knows issues or We conclude per should know that the other ignorant.5 son fact gen remained as whether There are some authority, apparent, expressions erаl involving actual or in Mississippi had either decisions receipt pre bind to payment different factual situations that relationship “The mortgagee amount of the re mortgagor for the entire between maining summary indebtedness. is such that neither shall do anything judgments respects be property must therefore reversed. the trust impair rights will the of the other II. or embarrass the enforcement of those rights.” po- Meyers appears Co., to take a furthеr v. American Oil 1941, 180, 218, that there is another issue be de- 220. sition 192 So.2d Miss. 5 morally outrageous 3. The remarks: commentator extreme cases of has been a series “The result of the rule will arise indefensible conduct there upon of older to the effect that one inroads decisions will be further the older being, seeing p. 314, fellow man in dire human rule.” Torts 2d § Restatement obligation peril, legal is under to aid 117. may him, dock, smoke his but sit on the Am.Jur., §§ 4. Fraud and See 23 Deceit cigar, other and watch drown. Such the 78-81; Fraud 16. § 37 C.J.S. by legal decisions have been condemned 81; Am.Jur., sense, revolting 5. 23 Fraud and Deceit § See moral writers ap- they 16d. § 37 C.J.S. Fraud the law. It thus far remain later, pears that, inevitable sooner
87 (dissenting): Collom, GEWIN, Judge Circuit Bank v. Land also Federal See 127. 1946, 201 Miss. 28 So.2d majority agree de- I not with the payment of Nonetheless, respect to with cision that the district court erred may relationship mortgage their debt summary judgment granting First for fiduciary advеrsary than of rather be Savings and Loan Association Federal Mortgages 59 C.J.S. character. See questions of fact remain material because ordinary any event, (b). rule § I As record to be resolved. view mortgage payment debt is that extinguishes case, function of the district this sole mortgage re- the lien of the law, construe, matter as a court was to entry gardless of satisfac- formal from American the letter of 3rd Mortgages Thus 470b. tion. § C.J.S. to Zurich any fiduciary relationship between court held Inc. district may parties have been terminated clearly, unequivocally, and that the letter may payment; re- or it be that there unambiguously authority upon conferred phase of the mained existence some all on the receive parties relationship because between note, including pre-payment First the transaction between Federal’s by I First Federal. believe decision attorney beyond extended unquestionably correct, and therefore full, of the indebtedness I must dissent. note included surrender of cancelled summary judgment for The motion cancellation or and deed of trust and usual First Federal was filed trust; record of the deed of satisfaction of summary judg- barebones motion entirely never and that transaction was had before ment. The district court completed. affidavits, depositions, and numerous parties deаl at arms Where relating documentary evidence length, duty is no of disclosure there Rogers’ authority. question of It con- equally the facts are within the where knowledge cluded that none of this evidence altered parties; but if the both meaning of the or varied the clear knowledge peculiarly facts are within August 11th, 3rd letter. The letter of party, may of one there of dis upon attorney while relied particular closure under circumstancеs. Federal, is but further evidence 16b; Am.Jur., C.J.S., See 37 Fraud § that the 3rd letter conferred Deceit, Fraud and 80.§ necessary authority Rogers to receive *7 manifestly prepayment. It the indicates good part judicial It is of adminis- in Au- that meant its American National us, appeal, under- tration for on this to gust 3rd district court letter what the definitively principles to take state the did, First Federal concluded and what it applied respect of law to to be with addition, it letter believed clearly did. the acts or omissions of the defendants sub- that First Federal acted indicates delivery sequent $68,- to of the check reasonably prudently interpreting in vary principles 659.94. Those with earlier as it The affidavit the quoted letter did. particular facts and circumstances majority opinion in does not may developed on trial on the mer- a question fact to of raise material as foregoing its. The discussion intend- is meaning It 3rd of the letter. merely to indicate the breadth of conclusory and amounts to in nature developed issues statement, to be and which the dis- after little more than a fact, necessary may usual- trict court find to deter- to National as what American ly in intended to do did cases and other mine on on a trial merits. respect question. At in with to the note judgments are and the reversed layman’s interpre- best, therefore, it is a proceedings causе remanded for further meaning 3rd tation of the opinion. not inconsistent this with Regardless Na- American letter. what may its Reversed and remanded. tional intended have August 3rd, legal it is bound con- nearly good and who was not in as sequences language position in that used a to such discover misconduct as National, letter. The district found it place court that American is to the shoe apparent authority wrong created an in on the foot. note, to collect all in- Essentially, simple this is a case. The cluding First Fed- court, review, district this Court on in eral settlement the loan. That con- only required clear, are equivocal, a examine un- struction is buttressed the letter of unambiguous direct, and in- August 11th. There factual is no contro- meaning. strument to ascertain its here; versy holding the district court’s evidence introduced on the motion for upheld. correct and it should be summary judgment was sufficient to my case, Although, it is view of the question raise or doubt as to the unnecessary question to reach meaning obvious and common sense obligated whether Federal was ambiguity 3 letter. No was possible ir- raised, warn American National of and no factual conflict to ma- regularities Agent Rogers, part on the terial issue was established. The district agree I can not the conclusion of only with question court resolved the before majority open it, legal is also an one, there concise, direct, in a forth- right, factual issue as to First Federal agree whether I correct manner. with obligated prod American National say least, it decision. To is an into an its examination of the books of ominous decision to conclude otherwise agent. moving own short answer is that complex in the fast modern day its marketplace American National chose people, where of neces- аgent, duty sity, rely upon and it was its to maintain must the assertions of the proper relationship protect principal him to respect with with they its agents own interests from his misconduct. have vested their own Indeed, choosing. American National oweda par- deliberate fact This is of dealing through Rogers importance those with it ticular in this where case persons protect Mississippi agent from the misconduct had been the agent. Rog- many years, of its chosen had selected It for so National forcefully plainly designated ers and had held and whose one of office agent. public him out to Per- as its the documents in office evidence as the dealing sons with him told Amer- Jackson, were of American sippi. Missis- dealing they ican National that with any fiduciary it. The existence rela- When all is said and district done the tionship National and between American again required court will be to dо what surely obligates First Federal already done, is, has meaning to determine the diligence National to due exercise unambiguous, simple, clear, of a sure that First Federal suffer would unequivocal writing. expression in With- no harm to the misconduct of due Ameri- reservation, hesitancy, restraint, out agent. suggest To National’s the ex- *8 summary judgment I would affirm the Na- istence to warn American against the district court Na- possible wrongdoing by tional one of tional. agents long standing chosen on the its Rehearing denied; GEWIN, part unsuspecting of an member of the Circuit Judge, dissenting. public, part choosing who had no