Bagnell v. Walker

• Decision Date: 28 May 1898
• Citation: 46 S.W. 126,65 Ark. 325
• Parties: BAGNELL v. WALKER
• Court: Arkansas Supreme Court

46 S.W. 126

65 Ark. 325

BAGNELL v. WALKER

Supreme Court of Arkansas

May 28, 1898

Appeal from Sharp Circuit Court in Chancery, RICHARD H. POWELL Judge.

Decree reversed and cause remanded.

Sam H Davidson, for appellants.

A remittance of money by mail is at the risk of the party sending it, unless he was authorized by express direction or previous usage to so remit it. 17 Ark. 428. In the absence of other satisfactory proof of authority to receive payment possession of the note or security, by the alleged agent, is necessary to the protection of one paying to him. 19 Ill.App 17; 2 Sandf. Ch. 325; 68 N.Y. 130; 18 Iowa 500; 35 S.W. 997; 55 Ark. 347; 98 Ill. 156; 161 Mass. 101; ib. 96; ib. 164; 89 Mo. 553; Jones, Mortgages (4 Ed.) 964; 162 Mass. 72; 64 N.W. 414; 41 P. 1068; 63 N.W. 362. Payment of a negotiable note to the original payee, after the note has been assigned, is no defense to an action by the assignee against the maker. 29 Ark. 497; 21 Ark. 393; 13 Ark. 151; 31 Ark. 429; Jones, Mortgages (2 Ed.) § 840; 1 Jones, Mortg. (4 Ed.) §§ 956 and 847; 89 Mo. 553; 25 Kans. 625; 23 F. 165. The following authorities hold the same of non-negotiable instruments. 51 How. Pr. (N. Y.) 407; 14 Ill. 51; ib. 198. Even in cases where payment is made direct to the indorsee or payee of a draft or note who has not possession of it, but gives a receipt for it and agrees to surrender the paper, the maker or payor is not protected against a bona fide holder of the paper. 18 Am. & Eng. Enc. Law, 190, note 2, and cases; 64 Ga. 544; 54 Ga. 52; 23 Kans. 482; 20 Pick. 545; 71 Ia. 155; 45 Wis. 189; 85 Tenn. 737; 1 Dan. Neg. Inst. (3 Ed.) §§ 769 and 769a; 51 Cal. 227; 31 Ark. 20; 41 Ark. 242. Authority to collect interest on a mortgage does not authorize the agent to collect the principal also. 1 Jones, Mort. § 964; 2 Sandf. Ch. 325; 68 N.Y. 130; 103 N.Y. 556; 50 N.Y. 410; 15 Ia. 459; 46 Ia. 797; Mechem, Agency, § 379; 28 N.J.Eq. 13; 26 Ill.App. 433. The maker was not entitled to notice of the transfer of the paper. 6 Cold. (Tenn.) 467; 22 Mich. 360; 2 Cow. 246; 14 Am. Dec. 475. The assignee was subrogated to the mortgage security. 26 Ark. 151; 15 Am. & Eng. Enc. Law, 844, 855.

P. H. Crenshaw, for appellee.

Banks v. Flint, 54 Ark. 40, is conclusive of every point raised in this case. Appellant is estopped to deny the agency of those who so held themselves out, with his acquiescence. Payment to the agent is payment to the principal, whether the agent's authority is express or implied.

BUNN C. J. WOOD, J., dissenting.

OPINION

BUNN, C. J.

This a bill to enjoin appellant Davidson, as trustee in a certain deed of trust, from selling certain property therein contained, for the security of a debt alleged to have been paid. On final hearing, the temporary injunction was made perpetual, and Davidson, as also Bagnell, one of the parties defendant, appealed to this court.

The complaint set up that the note secured by the deed of trust was usurious, and furthermore that the note had been, in fact, paid.

The answer denied each of said allegations, and, with appropriate allegations, was made a cross-bill, praying the foreclosure of the deed of trust.

The chancellor held that there was no usury in the note or deed of trust, and that question is eliminated from the controversy here. The chancellor found, however, that the debt had been paid, and decreed accordingly for plaintiffs, dismissing defendant's cross-bill and making the injunction perpetual. The question therefore of the payment of the debt is all that is left for our consideration.

In May, 1890, Walker appointed, in writing sworn to by him, the Wilson & Toms Investment Company of St. Louis his agent to effect a loan for him of $ 1,000, drawing 7 per cent. interest per annum, due in five years, on certain real estate in Sharp county then owned by him, and which is the same as that involved in this litigation. The loan was effected. The note was executed, payable to one W. F. Leonard, for $ 1,000, bearing 7 per cent. interest from date, payable on the 1st of January and July of each year, and the note due and payable at the end of five years, after which time it bore interest at the rate of 10 per cent. The deed of trust was at the same time executed and acknowledged by Walker and wife, and delivered to George W. Toms, as trustee, and the money was paid by the company through the Bank of Mammoth Springs, Ark., whose cashier, H. G. King, had assisted Walker in borrowing the money. The note was assigned, for value, by Leonard to Bagnell some time in August, 1890; but of this Walker was not informed until some time in 1895, so far as the evidence discloses. The deed of trust was put on record soon after its execution.

Walker continued regularly to pay the semi-annual interest coupons, through the Mammoth Spring Bank and the Investment Company, until the latter went out of business in October, 1893, and was succeeded by the Central Trust Company of St. Louis. On the 10th of October, 1893, Walker sold the land in controversy to his co-plaintiff, G. P. Clay, gave him a warranty deed, and put him in possession at once; and on the following day sent, through Thomas H. Caleb, to the Mammoth Spring Bank, the sum of $ 1,036 (a sum sufficient to pay off the mortgage note and interest which would accrue thereon up to the 1st of January, 1894), and caused the same to be deposited in that bank for that purpose, and took his deposit receipt, in which was explicitly stated the object for which the fund was deposited. King, the cashier of the bank, presumably in obedience to instructions from Walker, addressed a letter to L. H. Hall (who, it appears, had become trustee in the deed of trust after the death of Toms, the original trustee named therein), in which Walker proposed to pay off the mortgage note and interest coupon, due 1st January, 1894, a year in advance of the maturity of the note, if the holder of the same would permit him to do so. This letter was turned over to Leonard, then the secretary of the Central Trust Company, and he communicated the proposition to Bagnell, and Bagnell agreed to it, but seems never to have heard anything more from it until more than a year afterwards, when, on demand, Walker refused to pay the coupons for July, 1894, and January, 1895, claiming that he had paid the note and interest to January, 1894, according to the proposition which had been accepted.

It appears that, after Bagnell (who was still unknown to Walker and to King also) had agreed to accept the proposition through Leonard, King, cashier of the Mammoth Spring Bank, forwarded $ 1,036 to the Central Trust...