161 Wis. 413 | Wis. | 1915
December 10, 1903, the defendant Margaret Anna Gregg executed and delivered to the Citizens Trust. Company her note for $4,500 payable in five years and secured by a mortgage on real estate executed by her and her husband, Walter F. Gregg. On December 10, 1908, the time of. payment of the note was extended five years by an agreement in writing entered into by the Citizens Trust Company as agent for the owner of the note and mortgage as party of the first part and Margaret Anna Gregg and Walter F. Gregg as parties of the second part. In this extension agreement the defendants agreed to pay the Citizens Trust Company as agent the sum of $4,500 in five years, together with interest at the rate of five per cent.' per annum payable semi-annually. This agreement was signed, sealed, witnessed, and acknowledged by the respective parties and was accompanied by eleven semi-annual interest coupons signed by both defendants. The defendants negotiated the loan through one H. J. Mabbett and paid their semi-annual interest to the Citizens Trust Company through him. On August 24, 1909, they paid directly to the Citizens Trust Company $1,000 of principal and it released a portion of
The trial court found that the Citizens Trust Company
Treating the Trust Company as having no greater general powers than an individual agent, as the trial court evidently did, he came to the conclusion that it had neither express nor implied authority to receive a part of the principal before due. The cases of Bartel v. Brown, 104 Wis. 493, 80 N. W. 801; Kohl v. Beach, 107 Wis. 409, 83 N. W. 657; Loizeaux v. Fremder, 123 Wis. 193, 101 N. W. 423; and Bautz v. Adams, 131 Wis. 152, 111 N. W. 69, tend to support such conclusion, though it is deemed that the undisputed facts bring the case within the doctrine of implied authority even if the agent were an individual instead of a trust company. McDermott v. Jackson, 97 Wis. 64, 72 N. W. 375; Freeman v. Dells P. & P. Co. 150 Wis. 93, 135 N. W. 540. In McDermott v. Jackson the rule is thus stated:
“If a principal so conducts his business, either through negligence or otherwise, as to lead the public to believe that his agent possesses authority to contract in the name of the principal, such principal is bound by the acts of such agent, within the scope of his apparent authority, in so contracting with any person who, upon the faith of such holding out, be*417 lieves, and bas reasonable ground to believe, tbat tbe agent bas snob authority, and in good faitb deals with, him, even though such agent have express secret instructions to the contrary. If the principal, by his conduct, imparts to his agent a particular character, he is legally responsible to innocent third persons for all responsibilities which would be incident to such character if it existed by express authority, and without regard to any secret instructions.” Pages 72, 73.
In the present case the principal, through the extension agreement, imparted to the Trust Company the apparent power to deal with the whole subject matter of the loan by making it payable to the Trust Company at its office and by failing to disclose his identity, thus making it impossible for the defendants to know who was the owner of the securities. Only a partial payment of principal was made, and there was no special occasion for the production of the note and mortgage, or a demand for them, as in case of a payment in full. There is nothing in the evidence to show that the defendants did not have a right to assume that the Trust Company at all times held possession of the note and mortgage. When paid in full, a failure to demand and receive them is deemed in law negligence on the part of the payor unless excused by special circumstances. Spence v. Pieper, 107 Wis. 453, 83 N. W. 660. But a want of possession of securities .does not determine the question of authority. In 2 Corp. Jur. 625, the rule is thus stated:
“The mere fact that the agent has not possession. of the notes or securities at the time of payment is not conclusive that he has no authority to collect the same, but is only a circumstance, to be considered in determining the question; and the facts and circumstances may be such that, notwithstanding the agent has not such possession, he has actual authority, expressed or implied, to make the collection.”
A large number of authorities are cited to sustain the rule stated.
In Central T. Co. v. Folsom, 167 N. Y. 285, 60 N. E.
“The reason of the rule that one who has made the loan as agent and taken the security is authorized to receive payment when he retains possession of the security is founded upon human experience that the payor knows that the agent has keen trusted by the payee about the same business, and he is thus given a credit with the payor.”
In Cheshire Prov. Inst. v. Vandergrift (Neb.) 95 N. W. 615, it appeared that an undisclosed principal directed his agent to make a loan and to take a note and coupons evidencing the loan and the mortgage securing the same in the name of the agent and that he permitted the agent to collect the interest. It was held that such facts tended strongly to show authority on the part of the agent to receive and receipt for the payment of the note and to enter a satisfaction of the mortgage.
But in determining the question of the powers of an agent trust companies do not stand on a parity with individuals. They are by law (secs. 2024 — 77i et seq. Stats. 1913) authorized to act “as agent or attorney for the transaction of business, the management of estates, the collection of rents, interests, dividends, mortgages, bonds, bills, notes, and other securities or moneys” (sub. (I), sec. 2024 — Hie), and under such authority it has become customary in the business world to do just what the plaintiff did in this case — leave it to the Trust Company to collect principal and interest on loans purchased from it, reinvest the moneys collected subject to his right to approve the security, look after the payment of taxes and insurance on mortgaged premises, and execute releases of mortgages when paid.
In the instant case the loan was negotiated by the Trust Company and made payable to it and at its office; interest was paid to it semi-annually for five years, and then it made an extension agreement with the defendants, signed and ac
Tested by these principles tbe case at bar is one where tbe plaintiff is bound by tbe acts of its agent, tbe Trust Com
On December 10, 1913, tbe defendants tendered plaintiff tbe sum of $1,546.16, the amount then due on tbe note. He refused to receive it, claiming $3,000 more with interest was due. Tbe defendants failed to pay tbe amount into court as required by Circuit Court Rule XV, and tbe court properly found that their tender was not kept good. Tbe cases of Kreutzer v. Lynch, 122 Wis. 474, 100 N. W. 887, and Inglis v. Fohey, 136 Wis. 28, 116 N. W. 857, relied upon by defendants to tbe effect that plaintiff waived tbe tender by refusing to accept tbe money, do not apply to a case like tbe one at bar where tbe dispute is as to tbe amount due. Tbe cases mentioned are where tbe party to whom tbe tender was made repudiated in toto tbe contract relied upon by tbe party making tbe tender. Tbe mortgage provides for a customary and reasonable sum of money as solicitor’s fee. Tbe court found, without any evidence so far as we can discover from tbe record, that $200 was a reasonable and customary fee. This amount should be reduced to $50.
By the Oourt. — Judgment reversed. Tbe trial court is directed to enter judgment of foreclosure against tbe premises not released from tbe lien of tbe mortgage in favor of plaintiff for tbe sum of $1,546.16, with interest thereon from December 10, 1913, at six per cent., $50 solicitor’s fee, and tbe costs of tbe action. Judgment for a deficiency, if any, to be entered against both defendants; Tbe defendants are entitled to their costs upon this appeal.