137 S.E. 204 | S.C. | 1927
Lead Opinion
March 18, 1927. The opinion of the Court was delivered by
It is further ordered that the petition for a rehearing in his case be, and the same is hereby, dismissed.
R.C. WATTS, C.J. EUGENE S. BLEASE, A.J. JOHN G. STABLER, A.J. C.J. RAMAGE, A.A.J.
I dissent: T.P. COTHRAN, A.J.
Dissenting Opinion
On account of the fact that the opinion first filed in this case has been withdrawn, the dissenting opinion heretofore filed by me is also withdrawn, and this opinion is to be taken as a dissenting opinion to the opinion last submitted and to the order dismissing the petition for a rehearing.
The opinion last submitted is a formal one, affirming the decree of his Honor, Judge Memminger, which confirmed the Master's report in favor of the defendant, in "short form"; hence attention must be directed to the Master's report. The undisputed facts are as follows:
On December 20, 1920, the defendant, Archie Gadsden, borrowed from the plaintiff, Adeline J. Miles, then Doscher, $1,000, and executed to her his bond therefor, payable December 20, 1923, with interest at 8 per cent. per annum, *59 payable quarterly, secured by a mortgage upon the premises described in the complaint, which included the usual clauses for the payment of taxes, insurance, and attorney's fees. The loan was obtained through an attorney, A.A. Kroeg, since deceased, who represented Gadsden in obtaining the loan, and Mrs. Miles in the examination of the title and execution of the papers. The bond and mortgage, made payable to Mrs. Miles, were delivered by Kroeg to her after the mortgage had been recorded, and continuously thereafter remained in the possession of Mrs. Miles. Her quarterly payments of interest due up to and including December 20, 1921 (four in all), were regularly paid by Gadsden to Kroeg and by him remitted to Mrs. Miles. Kroeg died on February 6, 1922. Thereafter the quarterly payments of interest were made by Gadsden directly to Mrs. Miles up to and including March, 1924. Prior thereto, on June 27, 1921, two and one-half years before the maturity of the bond (December 20, 1923), Gadsden paid to Kroeg $200 on account of the principal of the bond, which Kroeg never remitted to Mrs. Miles. The contest between the parties is with reference to this payment; Gadsden claiming, and Mrs. Miles denying, that he is entitled to credit on the bond therefor.
The Master found, and the Circuit Judge confirmed his report to that effect, that —
"There was no testimony to show that Kroeg was the authorized attorney for the plaintiff to receive and receipt for payments on account of the principal."
He found, however, that Mrs. Miles had ratified the authority of Kroeg to receive the $200 payment of June 27, 1921, made by Gadsden to Kroeg on account of the principal of the bond, and that, therefore, Gadsden was entitled to credit for it. The admitted fact, and the only fact upon which this conclusion was reached, is that, after the death of Kroeg, a creditors' bill having been instituted by Jagar and others against the administrators of Kroeg for *60 a settlement of his estate and creditors called in, Mrs. Miles filed her claim against the estate of Kroeg for the $200 received by him from Gadsden for her. The correctness of that conclusion, a matter of law from admitted facts, is the only issue in this appeal, for otherwise there is presented a case of a payment upon principal before maturity, upon a bond and mortgage in the possession of the mortgagee, to a person conceded to have been without authority to receive it, and without question as to his authority.
I may say, in passing, that there are so many points of difference between the case at bar and that of Cogswell v.Cannady,
In the transaction of receiving the $200, Kroeg must have been the agent of some one. Certainly not of Mrs. Miles, for it has been distinctly adjudicated that he had no authority from her. By exclusion, then, he must have been the agent of the mortgagor, and, as such, accountable to him for the $200 collected. The mortgagor has so recognized the relation by filing a claim against the estate of Kroeg for the amount.
At the same time, if Gadsden paid the money to Kroeg for Mrs. Miles, Kroeg by his receipt of it became the trustee of an express trust; Mrs. Miles being the beneficiary. *61
Not only this, but it is a familiar principal that, when an act is done, or an engagement undertaken, for the benefit of a third person, such third person, even if he had been unaware of the circumstances, has a valid cause of action upon such act or engagement. Butler v. Western Union Tel.Co.,
Ratification of the unauthorized act of an agent or of a stranger is largely a matter of intention; and while certain conduct will be held to have constituted a ratification, where such is the legal effect, notwithstanding the fact that the person may not have so intended it, the law should not so construe it where there is another reasonable ground to sustain the intention that there should be no such ratification.
Does any one suppose that Mrs. Miles, in pursuing a remedy which she unquestionably had, intended to assume responsibility for the payment which Gadsden voluntarily made to Kroeg? And if there be a reasonable explanation of her purpose, sufficient to prevent the legal conclusion of ratification, it should be adopted. I do not think, however, *62 that this is at all a question of ratification, but rather of the right of a creditor to pursue his remedy against either or both of two debtors.
Of course, a principal may ratify the unauthorized act of his agent, and one may ratify the unauthorized act of a stranger who has assumed to act as his agent. But in the latter case the stranger must have assumed to act as agent and the ratification must be of the stranger's act as agent. If the one sought to be charged with ratification has a cause of action against the stranger independent of any relation of principal and agent, his act which is claimed to have been a ratification of the agency, is referable to the independent cause of action and not to an assumed agency.
In the case at bar it is adjudicated that Kroeg was not the agent of Mrs. Miles to receive the payment upon the principal. There is no evidence that in doing so he assumed to act as her agent. The evidence shows that he received the money as the agent of Gadsden, with direction to pay it to Mrs. Miles either express or by implication.
"Ratification means adoption of that which has been done for and in the name of another; hence the contract at its inception must purport to be the contract of the principal. There can be no ratification where it appears that the person who made the contract was not at the time, and did not profess to be, acting on behalf of the alleged principal." 21 R.C.L., 923.
Kroeg took advantage of the credulity of Gadsden to receive the payment, and, as subsequent events developed, with intent to appropriate it to his own use. Gadsden does not contend that he paid the money to Kroeg as the agent of Mrs. Miles. He says, referring to a conversation with Mrs. Miles, after the death of Kroeg (he never knew or even saw her before):
"I tell her had I know I been dealing with her through Mr. Kroeg, I would come and ask her for information," etc. *63
In all the cases of ratification of the unauthorized act of an agent or of a stranger, the party sought to be charged with ratification has proceeded upon the theory of recognition of the agency or assumed agency. The plaintiff in the case at bar has not proceeded upon such theory, but upon the ground that Kroeg received money intended for her, repudiating any idea that he received it assuming to be her agent.
If a man should steal my horse and sell it to another, I would have a remedy against him for damages, and also a remedy against the purchaser for the possession of the stolen property. Could it be contended that, by pursuing my remedy against the thief, I had ratified the theft and the sale to the third person? I do not think so. The point is that, independently of the supposed contract, I would have a cause of action against the thief, in no sense owing its validity to the contract.
In Crute v. Burch,
"And it is further contended that plaintiff, by entering into negotiations with [agent] for collection of the price of the mule, he ratified the contract of sale. This position is equally as untenable as the first. He did not agree to take [the agent] as paymaster for the price of the mule, but was willing that he should pay for it. Surely it cannot be said this can be construed as an affirmance of the theft of the mule. Had he accepted from [the agent] the price *64 of the mule, or had he agreed to look to him for its payment, that would have been an affirmance of the sale."
In Barnsdall v. O'Day (C.C.A.), 134 F., 828, it was held, quoting syllabus:
"The bringing of an action by a principal against his agent in the purchase of lands for the amount of a commission secretly paid him by the vendor does not operate to ratify the contract, so as to discharge the vendor from liability in damages for fraud and deceit, by which, with the assistance of the agent, the sale was induced."
In 31 Cyc., 1282, it is said:
"A suit against the agent for moneys wrongfully received is not necessarily a ratification, as to third persons, of the agent's unauthorized contract."
In Bank of St. Mary's v. Calder, 3 Strob., 403, it was held that, where money has been wrongfully lent by the agent without taking sufficient security, an action in assumpsit by the principal against the borrower to recover the money lent is not an approval of the security taken, and will not relieve the agent from liability.
In Brown v. Foster,
"Where an agent makes an unauthorized sale and delivery of property, amounting to a conversion, the owner may, without ratifying the sale as made, waive the tort and sue the agent on the common counts in assumpsit to recover the value of the property."
The distinction which I am endeavoring to draw is illustrated by an Alabama case (Newman v. Morgan,
In the Cannady case, after the death of Kroeg, Cannady, the mortgagor, filed a claim against the estate for the payments which Cannady had made to Kroeg, and which he had failed to remit to Cogswell. Touching the contention that Cannady had ratified the conduct of Kroeg as his agent, the Circuit Judge held (affirmed by this Court):
"The fact that Cannady filed a claim against the estate of Kroeg is not inconsistent with his contention that agency existed between Kroeg and Cogswell; for one can make a demand on the agent without waiving any rights against the principal, and Cannady was merely trying to aid Cogswell in collecting his money by filing a claim."
If this be true why can it not be said with equal propriety:
"The fact that Mrs. Miles filed claim against the estate of Kroeg is not inconsistent with her contention that agency existed between Kroeg and Gadsden; for one can make a demand on the agent without waiving any rights against the principal, and Mrs. Miles was merely trying to aid Gadsden in collecting his money by filing a claim."
I think for the same reason that Mrs. Miles did a very proper thing, in filing her claim against the estate of Kroeg, for her own benefit, as well as for that of Gadsden. She was not at all responsible for the unfortunate situation in which Gadsden had placed himself, and certainly should not by that act, which not only did not alter Gadsden's situation to his prejudice, but was positively in his interest, be held to have waived any of her rights against him. It appears that Gadsden, too, filed his claim against the estate of Kroeg for the money paid by him on the principal. It seems unfair to prejudice Mrs. Miles' interests by reason of the same act which is made quite innocent in Gadsden. *66
The authorities cited by the writer in his dissenting opinion in the case of Land v. Reese,
I think, therefore, that the judgment of the Circuit Court should be reversed. Being of that opinion, I dissent from the order dismissing the petition for a rehearing.
Let this opinion stand as a dissent to the revised opinion of Mr. Justice Blease, and as a dissent to the order dismissing the petition for a rehearing; my former dissenting opinion being withdrawn.
Addendum
This Court is entirely satisfied with the report of F.K. Myers, Esq., Master for Charleston County, in the above-entitled cause, which was confirmed by the decree of the late Hon. R.W. Memminger, Circuit Judge. Let the report of the Master be reported.
It is, therefore, ordered that the decree of the Circuit Judge be affirmed.
MR. CHIEF JUSTICE WATTS, and MR. JUSTICE STABLER and MR. ACTING ASSOCIATE JUSTICE C.J. RAMAGE concur.
