87 Mo. App. 316 | Mo. Ct. App. | 1901
This is a proceeding in equity whereby plaintiff asks the court to cancel a deed of trust and a negotiable promissory note which the trust deed secured. The decree in the trial court was for plaintiff.
The Sexton Security Company (managed by two Sexton brothers) was engaged in the loan brokerage business in Kansas City, Missouri. Plaintiff, having noticed their advertisement, called at their office and made application for a loan of $650 for one year, to be secured by a deed of trust on certain property in the city. After some slight difficulty in correcting the title to the property, the loan was made and the note, with two semiannual interest coupon notes, and deed of trust were executed, the note and interest made payable to the company and at the company’s office. Afterwards, plaintiff paid to the company the first interest coupon due in six months and took its receipt for the same, the note and coupons having been transferred by the company to defendant Boteler who had possession ; the coupon was not delivered to plaintiff for a day or two when it was mailed to him by the company. Afterwards, a while before the note became due, plaintiff called at the company’s office and asked one of the Sextons if he could grant an extension of time on the note. Sexton answered that he thought he could do so, but for him to call again in a day or two and he would let him know. Plaintiff called and was told by Sexton that if he would pay the remaining half year’s interest coupon, then about due, and $500 on the principal, that "the party who owned the note would extend the balance. Plaintiff thereupon paid the interest and $500 on the principal to the company, taking its receipt for the same. This payment of interest was paid to defendant Boteler by the company, but the $500 paid on the principal was not paid, to him. The company, shortly thereafter, became insolvent and defendant, claiming that no payment of principal had been made on the
One who pays money on a negotiable security to another ■as agent for the holder, when such agent has not the paper in possession, does so at the peril and risk of being able to show •that the party to whom *he paid was the expressly authorized agent to collect; or else that the holder had, by a course of conduct, led the payor to believe he was so authorized. Cummings v. Hurd, 49 Mo. App. 139, and cases hereinafter cited. We have no hesitation in stating that there is not sufficient evidence to warrant a finding that defendant, by his condfict, held the security company out as his agent to collect the sum paid by this plaintiff on the principal.
That our position as to the rights of these parties may be better understood we will concede (without deciding) that the loan to plaintiff was made by the company for defendant and that defendant’s money was paid over to plaintiff hy the company when the loan was consummated. In the same way we we will concede that the defendant hy his conduct held out the company as authorized to collect the two interest coupons. Neither of these facts make plaintiff’s case. The fact that a broker negotiates a loan to a borrower for a lender does not show that such broker has authority to collect either principal or interest. .And this is true even though the sum loaned is made payable at the broker’s office. Nor does the -fact that the bi'oker is authorized to collect interest for the lender show that he has authority to collect the principal. Englert v. White, 92 Iowa 97; Cooley v. Willard, 34 Ill. 68; Stiger v. Bent, 111 Ill. 328, 338; Smith v. Kidd, 68 N. Y. 130; Biggerstaff v. Marston; 161 Mass. 101; Security Co. v. Graybeal, 85 Iowa 543; Klindt v. Higgins, 95 Iowa 529; Bank v. Bur
The principle npon which an agency is established by conduct is estoppel. That is to say, the principal’s conduct must be such as to mislead the debtor. His conduct must be such as to make it appear to the debtor that a certain party is acting as his agent; and though not true in point of fact, yet justice requires that he should not be allowed to dispute it in a contest with the party whom he has, by his conduct, misled. It must follow that in order to avail himself of this the debtor should have known of the principal’s conduct. Otherwise, he could not have been misled or deceived by appearances. It has therefore been held in cases in all substantial respects like this, that when the payor does not know of the holder’s ownership of the note there can be no estoppel against the holder to deny the agency of a third party, for the reason that in such case the payor could not be misled by the holder. Joy v. Vance, 104 Mich. 97; Biggerstaff v. Marston, 161 Mass. 101. And so it is stated in one of the principal cases cited for plaintiff (to which we shall presently again refer) that the authority of such an agent will be conclusively presumed' “so far as may be necessary to protect the rights of third persons who have relied thereon in good faith, and in the exercise of reasonable prudence. Bank v. Ins. Co., 145 Mo. 127, 138. Now, in this ease there is not a particle of evidence that plaintiff knew of any transactions between the defendant and the Sextons or the company. Indeed, plaintiff admits that he did not know defendant and never saw him until after the payment in controversy and after the company closed its doors. He therefore could not have been even influenced, much less misled, by defendant’s transactions with the company. He knew that some one owned the note, but he knew the party would not
But actual agency may be established by proof of circumstances — by circumstantial evidence — bearing upon the question. Wharton on Agents, sec. 44; Norton v. Bull, 43 Mo. 113. Thus “where it appears that the alleged agent has repeatedly performed acts like the one in question, which the principal has ratified and adopted, his authority for the performance of the disputed act may be inferred. Mechem on Agency, sec. 86; Sharp v. Knox, 48 Mo. App. 169. This mode of proof of agency does not rest on estoppel. It is proof of a fact by deduction or inference from other facts. It has therefore been correctly held that the acts need not be shown to have been known by the party claiming that he dealt with an agent. Sharp v. Knox, supra; Gibson v. Zeibig, 24 Mo. App. 65.
The acts and conduct between defendant and the Sexton Security Company, by which it is sought to infer actual agency, consisted in the latter collecting interest on the greater part of other notes which it had transferred to him. This was done by the company notifying the borrowers, some days before interest was due, to come in and pay. They generally responded to such notice and upon paying would receive a receipt from the company with the statement that the coupon would be mailed to them when obtained from the holder. There was also evidence of two collections of principal (besides the one in controversy) on two separate loans. The evidence to show that these were collected by the company is uncertain and indefinite. They were known as the Fezler and Moore loans. Evidence as to the Eezler loan is found in several parts of the abstract. Taking it altogether, it becomes clear that defendant
The evidence of actual agency is too vague and unsubstantial to support a finding that such agency existed. And when it is considered that defendant kept the notes in his own possession; that they were never surrendered except on payment and that this plaintiff knew that the note against him had been sold by the company and that it did not at any time after-wards have possession of it or of the interest coupons, it becomes quite evident that the relation of principal and agent did not exist between defendant and the company. Indeed, we believe a fair interpretation of the whole evidence will result in the conclusion that defendant had as much (or even more) ground to suppose the security company was acting as plaintiff’s agent as plaintiff had to infer that it was his agent.
But plaintiff, in submitting his brief herein, has ignored the force and authority of the citations we have made, many of which are substantially the counterpart of the present case, and places his yeliance upon adjudications in the Supreme and Appellate Courts of this State. The principal of these are Bank v. Ins. Co., 145 Mo. 127, May v. Trust Co., 138 Mo. 275, and Sharp v. Knox, 48 Mo. App. 169. Each of those cases involved a question of like kind to the one we are considering, and in each of them it was held that an agency to receive payment existed. But á consideration of the facts in each of them will disclose, by comparison, how littje there is in this case to establish an agency. In the first of those cases it was shown that the principal, living in a distant State, made loans through an agent in Missouri amounting in the aggregate to $2,350,000. 'That the agent had charge of the collection of the interest and principals as they matured on all of these loans. That the agent collected $700,000 of principals and $500,000 of interest on five hundred different loans, in thirty-five counties in the State of Missouri. All matters pertaining to the loans, their protection and security, were left to the agent. The agent saw that taxes were paid on the mortgaged lands,
The last of the foregoing cases was decided in this court. Knox, a resident of Indiana, was the lender and holder of the
We consider that the decree should be reversed and it is so ordered.