66 Mo. App. 8 | Mo. Ct. App. | 1896
Plaintiff is indorsee of the note sued on and defendant is the administrator of Edward Farrell, Sr., deceased. The latter had judgment in trial court and plaintiff appeals.
It appears that the C. D. Smith Drug Company was a mercantile corporation and that the deceased and his son were partners. That the drug company, through its president, C. D. Smith, sold a stock of drugs to Prentice, who obtained the firm name of “E. Farrell & Son” to be signed by the son to the note, as accommodation makers, without authority from deceased, in payment for the stock. That C. D. Smith knew this when he sold'the drugs and accepted the
In our opinion, the circuit court was right in holding that C. D. Smith’s knowledge was plaintiff’s knowledge. The true rule of law is that, where a dual agent, known to each principal to be such, is, himself, the sole actor in a transaction between the principals, his knowledge is to be taken as the knowledge of each, in so far as it affects either. It seems to me that this is necessarily so. Otherwise, there could be no full power of contract between persons acting through the same agent. If parties knowingly select the same agent to consummate a transaction, they are affected by his knowledge, the same as they would be bound by the knowledge of their separate agent, had they selected different representatives. There is no reason why this should not be the rule. No hardship can result from it; for there can be no such dual agency without the knowledge and consent of each principal. Mechem Agency, sees. 66-68, 79; 1 Morawetz Corp. 528-530. And so we have decided in DeSteiger v. Hollington, 17
But there is a rule of law, stated rather as an exception to the rule, that it is presumed an agent will disclose his knowledge to his principal. The qxception is this: • That if the agent is dealing for himself with his principal, then his knowledge will not be imputed to his principal. Bank v. Lovitt, 114 Mo. 519. As, if one negotiates a note to a bank (of which he is president) through other officers of the bank his knowledge of an infirmity in the note will not be imputed to the bank. In such case, he has laid aside his agency and is dealing on equal terms, at arm’s length, with the bank. And there is another exception, which is that where the conduct of the agent is such as to raise a clear presumption that he would not communicate his knowledge to the principal, as where the communication of such knowledge would necessarily prevent the consummation of a fraudulent scheme which the agent was engaged in perpetrating. Hickman v. Green, 123 Mo. 175, and authorities cited therein. It is on these exceptions to the rule that plaintiff seeks to base her claim that she is not chargeable with the knowledge of her agent. But there is no room for their application to the facts of this case. C. D. Smith, in selling the note to himself for the plaintiff, was not acting for himself. He was acting for the drug company.
But plaintiff contends that since C. D. Smith was a large stockholder in the drug company, it was to his personal and selfish interest to sell the note — to realize on the note, since the corporation itself could not successfully maintain an action on it; and that for this reason, under the second exception above stated, plaintiff would not be charged with his knowledge of the
In Bank of Milford v. Town of Milford, 36 Conn. 93, the treasurer of the town, who had frequently borrowed for the town, borrowed of himSelf, as cashier of the bank, a sum of money. He borrowed it, as in other instances, in the name of the town, though, in this instance, the money was for himself. Thus he acted in the dual capacity of agent for the town in borrowing, and agent for the bank in lending; and the court' held the bank chargeable with his knowledge of the fraud; and that the bank, by ratifying his contract by suing on it, must accept his knowledge and be bound by it. That case finds full application to the one before us.
We are cited to several cases by plaintiff in support of her position, but an examination of them shows
It follows from the foregoing views that the judgment should be affirmed.