116 Kan. 580 | Kan. | 1924
Lead Opinion
The opinion of the court was delivered by
This case turns upon whether payments of interest and part of the principal of a negotiable note secured by a real-estate mortgage, made to a mortgagee after the execution and recording of an assignment, took place under such circumstances as to bind the assignee upon the theory that the mortgagee was his agent or that he had taken part in a course of dealing such as to preclude him from denying the agency.
On September 1, 1916, James A. Redinger executed to J. L. Pettyjohn & Co., of Olathe, a real-estate mortgage for $5,000, due in five years, bearing interest at six per cent per annum, payable semiannually. The principal and interest were made payable at the office of Pettyjohn & Co., or at such other place as the legal holder might from time to time designate. The makers were given the privilege of paying $100 or any multiple thereof upon the principal at any interest-paying time by giving thirty days’ notice. On September 6, 1916, the note and mortgage were sold to Edwin Walmer, of Merriam, in the same county, the assignment being duly recorded on that date. The note was indorsed in blank, the indorsement including a specific guaranty’ of payment of both principal and interest. The mortgagor paid the first three interest coupons to the Pettyjohn company, which remitted the amounts to Walmer, who returned the coupons to the company; and payments on the principal were made to the company of $1,000 on September 1, 1918, and $500 on September 1, 1919, which it retained. After these payments on the principal, payments of interest were made to the company, a corresponding reduction in the amount being made, and the
The statute authorizes payment of an assigned real-estate mortgage to be made to the mortgagee unless the assignment is recorded (R. S. 67-321), ánd the effect of the act is to charge the mortgagor with constructive notice of the change of ownership where such record is made. (Detwilder v. Heckenlaible, 63 Kan. 627, 66 Pac. 653.) The payments to the mortgagee, as such, were therefore without effect upon the rights of the assignee. The judgment is based upon a finding that the Pettyjohn company was the agent of the assignee to receive the payments, or at all events that the assignee was precluded from denying such agency by having participated in a course of dealing justifying a belief that it existed. The question presented is whether there was any substantial evidence to support this finding.
After the assignment the note was continuously in the possession of Walmer and was not at any time held by the Pettyjohn company. No other place of payment than the office of the company was ever designated and the note therefore was at all times payable there. This of course did not authorize a payment to be made at that place, without the production of the noté, to anyone except its owner or his agent, or apparent agent, whose agency the owner by his own conduct was estopped to deny. (Fowle v. Outcalt, 64 Kan. 352, 67 Pac. 889; 8 C. J. 601-2; 3 R. C. L. 1289.) That is the rule where the law does not require or provide for a record of the assignment (8 C. J. 601, 602), and it applies with equal or greater force where under the statute a record has been made which imparts constructive notice to the mortgagor of the change of ownership. The omission of the assignee to designate a new place of payment is therefore important only as it may tend to aid in interpreting the real or apparent intention of the assignee with respect to accrediting the company as his agent.
*583 “Although the fact that an instrument for the payment of money is made payable at some designated place is of some significance in determining the authority of a third person at the place designated to receive payment, yet, in and of itself, that it is made payable at a particular place is not sufficient to authorize its payment at that place to one other than the owner, unless the person receiving payment has possession of the instrument.” (21 L. R. A., n. s., 52, Note.)
Walmer, had at one time or another some six mortgages which he had purchased from the Pettyjohn company besides the one here involved. The company’s books contained an account with Walmer from 1912 to 1921, showing about forty debit items and a like number of credits, the entries consisting solely of amounts. It showed some half dozen items of over $1,000 in pairs, presumably indicating purchases of mortgages. It showed $5,000 credited on September 5, 1916, and debited eight days later, probably referring to the purchase of and payment for the Redinger mortgage. In a number of instances debits of amounts varying from $75 to $255 are followed with credits for the same amount within a few days, seemingly based upon collections and remittances of interest. It is not possible, however, to determine definitely which of these entries refer to the Redinger loan. An abstract of this loan shown in one of the company’s books gives its details — date, amount, security and like matters, and the two partial payments on the principal and the payment of the first three coupons. A former bookkeeper of the company testified that the company would-send to Walmer checks for the interest about two weeks before it was due and that Walmer usually brought the coupons in in person. ' An undated letter from Walmer to the company read: “Your draft for $150 in payment for the James A. Redinger interest was received, and enclosed please find coupon for same.” A letter from the company to Walmer, dated August 23, 1915, read: “Please find herein our draft No. 36,472, First National Bank, Kansas City, Mo., payable to your order, for $255, in payment of the following coupons due September 15, 1915: [three coupons described]. Please send us the coupons by return mail and oblige.” A large number of similar letters were shown, the money being almost invariably sent one or two weeks in advance of maturity. On November 9,1918, the company wrote Walmer saying two designated loans had been paid, asking him to send the papers, and inviting him to select other loans to replace them. On April 23, 1920, the company notified him by letter that another loan was due the first of the next month, asked him to send the papers, and men
The situation is somewhat analogous to that presented in Fowle v. Outcalt, 64 Kan. 352, 67 Pac. 889, where the assignee of a mortgage note was held bound by a payment made to the original payee by reason of having acquiesced in the payment of a number of coupons in the same manner. The case was decided after the enactment in 1897 and 1899 of the statute already referred to regarding the recording of assignments of mortgages, but the transactions out of which the litigation grew took place before that time, so that its provisions were not involved. The opinion laid considerable stress upon the fact that the mortgagor had no notice of the assignment, and some features tending to strengthen the debtor’s position are not present here. However, the case was decided upon the theory that the evidence was sufficient to support a finding of real or apparent agency, and upon this issue the decision is applicable. Where the statute controls, because of the assignment not being recorded,
In another case arising before the assignment-record statute was passed, payment of a mortgage note and its coupons to the mortgagee after an assignment was held not to bind the assignee, where at the time of such payments, which were made at a place other than that designated, the note and coupons bore indorsements in full to the assignee. (Walter v. Logan, 63 Kan. 193, 65 Pac. 225.) Stress was laid upon the circumstance that the indorsement on the coupons gave notice to the mortgagor of a change in ownership, but the facts were not sufficiently like those of the present case to make the result determinative here. A different conclusion was reached in Doe v. Callow, 67 Pac. 824, a Kansas case not officially reported, where the rights of the parties became fixed before the enactment of the statute relating to the record of assignments. There the mortgagee’ guaranteed the payment of the coupons at maturity and of the note within two years after it became due, and provision was made, in case of the mortgagor’s default, for the delivery of the note and mortgage to the mortgagee for foreclosure. The mortgagor paid the interest and principal to the mortgagee at maturity and had no notice of a change of ownership until fifteen months after payment was completed. These facts were held to justify a finding that the mortgagee was the agent of the assignee.
An agency to collect was held to be established by the dealings between the mortgagee and assignee in Hansford v. Meserve, 97 Kan. 450, 53 Pac. 835, decided in 1898. In the official report “aware” is printed for “unaware” in the sentence, “The plaintiff was unaware that the company had sold the mortgage securities, but supposed it to be still the owner.”
■ A payment of part of the principal of a mortgage debt, under a clause allowing part payments in multiples of $100 at the times when interest was due, has been held to be binding upon the mortgagee, although made to the broker who negotiated the loan, on the theory that the course of dealing and correspondence warranted a finding that the broker was the general agent of the mortgagee in the loan business. (Hamlin v. Nace, 99 Kan. 286, 161 Pac. 655.)
In the following cases the evidence was held not to show agency to receive payment: Bronson v. Ashlock, 2 Kan. App. 255, where
The preseut case differs in some respects from any of those cited. The fact that the assignment was recorded, under the statute making such record constructive notice to the mortgagor, is an important element here. However, if the assignment had not been recorded the question of agency, real or apparent, could not arise, for in that situation the payment to the mortgagee would discharge the debt regardless of that matter.
This court is of the opinion that the evidence justified a finding that the Pettyjohn company either was actually the agent of Walmer for the purpose of receiving payments of the interest and part payment of the principal of the note or by its course of dealing had given the company such apparent authority in the matter as to create an estoppel to deny the existence of such agency.
The judgment is affirmed.
Dissenting Opinion
(dissenting): My own view is that the evidence does not warrant a finding of agency or estoppel — a conclusion to which these considerations seem to me to give support: The owner of the note, having recorded the assignment to him, omitted no duty he owed to the maker. There was no occasion for his designating a new place of payment, if he was satisfied, as he appears to have been, to have the debt remain payable at the company’s office. To preserve his rights in their entirety it was necessary for him to have the coupons and note there on the date of their respective maturity in the hands of some one authorized to receive payment. His omission to do so might, by preventing a proper presentation for payment, release a party secondarily liable, but the effect as between the holder and the maker would merely be the same as a