Cannon v. Gibson

• Decision Date: 09 January 1912
• Citation: 142 S.W. 730,162 Mo. App. 386
• Parties: CANNON v. GIBSON et al.
• Court: Missouri Court of Appeals

142 S.W. 730

162 Mo. App. 386

CANNON v. GIBSON et al.

St. Louis Court of Appeals. Missouri.

January 9, 1912.

1. PRINCIPAL AND AGENT (§ 105)—AUTHORITY OF AGENT.

An agent to receive payment of a note has no authority to receive anything but money in payment, and he may not sell or exchange the note, or accept the note of another in payment.

2. PRINCIPAL AND AGENT (§ 169)—UNAUTHORIZED ACTS OF AGENT—RATIFICATION.

A holder of a note secured by deed of trust placed the note, indorsed in blank by the payee, in the hands of an agent to receive payment. The agent accepted the note of another as payment, and a third person purchased the land covered by the deed of trust after the agent had represented that the deed of trust would be satisfied. The holder did not know of the transaction until later, and then she repudiated the transaction to the agent and directed him to procure the money, but she did not notify either the grantor in the deed of trust or the third person. Held not to show a ratification of the unauthorized act of the agent, and the holder could enforce the note and deed of trust.

3. ESTOPPEL (§ 95)—ACTS CONSTITUTING.

The holder was not estopped from enforcing the note and deed of trust because her silence did not lead any of the parties to change their position.

4. ESTOPPEL (§ 76)—ACTS CONSTITUTING.

Where the holder of a note indorsed in blank by the payee placed it in the hands of an agent to receive the money, and thereby gave him the appearance of being the owner, he was estopped from setting up his ownership against a third person who dealt with the agent on the faith of his being the true owner, but the third person must show that he was influenced by the false appearance.

Appeal from Circuit Court, Lincoln County; James D. Barnett, Judge.

Action by William A. Cannon against Paul H. Gibson and another. From a judgment for plaintiff, defendants appeal. Reversed and remanded.

This is an injunction proceeding to restrain the sale of certain lands under a deed of trust in the nature of a mortgage; plaintiff alleging that the note secured by the deed of trust had been paid off and discharged. Defendant Elizabeth Baskett is the owner, or claims to be the owner, of the note, and defendant Paul H. Gibson is the trustee named in the deed of trust. Upon final hearing the court overruled a motion to dissolve the temporary injunction theretofore issued, and made the injunction permanent. The defendants have appealed.

It appears from the evidence that on June 8, 1908, and prior thereto, John M. Gibson owned a tract of land in Lincoln county, which was subject to the lien of a deed of trust, given to secure the payment of a note for $785. The note was owned by Elizabeth Baskett, and was then past due and in the hands of her brother, Judge W. H. Baskett, of Elsberry, as her agent, for collection. He was not to press for the payment of the principal, she being content to keep her money out at interest as it was, but was to collect the interest as it became due, and to receive the principal if Gibson desired to pay it. This note had originally belonged to her brother as executor, and on its face was made payable to "W. H. Baskett, Exr.," and by him had been turned over to her in partial payment of a legacy due to her on final settlement. The note bore the indorsement in blank of the payee. At all the times we are concerned with Gibson had knowledge of the fact that the note belonged to Elizabeth Baskett, and that W. H. Baskett was holding it as her agent for collection. On June 8, 1908, Elizabeth Baskett was absent on a visit in California, and had been so since November, 1907. It was with affairs in this shape that on June 8, 1908, the plaintiff Cannon and John M. Gibson made an agreement of trade or exchange, whereby Gibson, by warranty deed, was to convey to Cannon the land covered by the deed of trust, and, in consideration therefor, Cannon was to transfer to Gibson certain unsecured notes of one Judge Reid for $2,700. Cannon lost no time in complying with his part of this agreement, but immediately on the same day, and without waiting for any deed to be made to him, turned over all of the Reid notes to Gibson. The latter had told him of the deed of trust incumbering the property, saying it was held by Judge Baskett, and had stated he would pay it off either in money or by having Judge Baskett accept some of the Reid paper for it. The next morning Gibson, Reid, and Baskett met in Gibson's office at Elsberry. Baskett was willing to take from Gibson part of the Reid notes at par in payment of his sister's note, but requested that Reid make a new note for the proper amount; the old note being disfigured with credits, etc. Therefore Gibson wrote out a new note payable to Elizabeth Baskett. Reid signed it, and Baskett received and accepted it. At Gibson's suggestion, the mortgage note was marked paid, but Baskett retained it, promising that in a short time he would go over to Troy and release it of record. Gibson then asked Baskett "to show Cannon his land is clear," and Baskett said he would. Baskett then went to Cannon's store and told him they had fixed up the papers, and he had taken the Reid note for the mortgage note, and was going to Troy in a few days to have the latter canceled. Cannon testified as to this: "I supposed they were his notes. He took them out of his pocket and says, `Here's these notes; been marked paid.' I never took them and looked at them. Said he would have the record satisfied." This was the first time Baskett and Cannon had said anything to each other about the matter. On cross-examination Cannon testified: "Of course, I bought the land, and he (Gibson) was to give me a warranty deed for it. That was the contract, and I was to give him some notes aggregating something like $2,700. * * * First I knew about Baskett Gibson says: `There's a mortgage on the place. I have got to satisfy that, of course. I give you a warranty deed.' I bought from Gibson. Baskett came by and told me what he was going to do. Showed me the notes. I never looked at them. Thought it would be all right. Had no dealings with Baskett except he voluntarily told me he had already taken these other notes, clean notes, from Judge Reid. The transaction had already been closed. * * * Gibson told me, `Baskett holds a mortgage,' and spoke about the paper; if he didn't take that paper, he would pay him the money, and, of course, he was to give a warranty deed, that was his business." It being suggested to Cannon on cross-examination that he had not relied on Baskett in the matter, but had relied on Gibson to clear the title, he said ...