Farmer v. Wallin
| Decision Date | 06 December 1922 |
| Parties | JAMES H. FARMER, Respondent, v. J. P. WALLIN, et al., Appellants |
| Court | Missouri Court of Appeals |
Appeal from Circuit Court of Howell County.--Hon. E. P. Dorris Judge.
AFFIRMED.
Judgment affirmed.
Humphries Burroughs & Van Wormer for appellant.
(1) If the debtor or the payer leaves money in the bank to pay his obligation, or being a depositor specially directs the bank to pay such obligations, the bank becomes his agent and is responsible to him for the safe keeping and proper application of the money. 7 C. J. 606; U. S. Ward v Smith, 7 Wall. 447, 19 L.Ed. 207; Scott v. Gilkey, 153 Ill. 168, 39 N.E. 265; Wheeling Exchange Bk. v. Sutton Bank, 78 Md. 577, 28 A. 563; St. Paul Nat'l Bank v. Cannon, 46 Minn. 99, 48 N.W. 526; Adams v. Hackensack Impr. Comm., 44 N. J. L. 638; Arriall v. Bingham, 55 Hun, 553, 9 N.Y.S. 68; Baldwin's Bank v. Smith, 136 N.Y.S. 349; Fayles v. Cox, 95 Tenn. 579, 32 S.W. 626. (2) A bank which is directed by the makers to pay a note has been held to be the agent of the makers rather than the agent of the owners for collection. 7 C. J. 599; Baldwin's Bk. v. Smith, 136 N.Y.S. 349, Aff. 155 A.D. 139 N.Y.S. 1115 Mem. (3) It is elementary doctrine that an agent authorized merely to collect a demand or to receive payment of a debt cannot bind his principal by any agreement short of an actual collection and receipt of the money. Wood v. Evans, 2 Ld. Raym. 928; Ward v. Smith, 7 Wall. 451; Pitkin v. Harris, 69 Mich. 133, 37 N.W. 61; Hurley v. Watson, 68 Mich. 531, 36 N.W. 726; State Bank v. Byrne, 56 N.W. 355; Midland Nat'l Bank v. Brightwell, 148 Mo. 358; Bank v. Bank, 151 Mo. 320; Peoples' Bank v. Presnell, 236 S.W. 401, 5 Cyc. 506; Sutton v. Libby, 201 S.W. 615; Armstrong v. First Nat'l Bank, 195 S.W. 562; Peoples Bank v. Stewart, 136 Mo.App. 24 l. c. 34, 117 S.W. 99; Same case, 152 Mo.App. 314, l. c. 329 & 330, 133 S.W. 70; Reinhart Grocery Co. v. Knuckles, 172 Mo.App. 627, 155 S.W. 1105; Burkwalter v. Crane, 55 Mo. 71; Wheeler v. Gian, 65 Mo. 89; Rinehart Gro. Co. v. Powell, 158 Mo.App. 458, 18 S.W. 909, 31 Cyc. 1375; Miller v. Peoples' Savings Bank, 193 Mo.App. , 186 S.W. 547; Kelly v. Gay, 55 Mo.App. 42. (4) An agent authorized merely to collect an account has no implied authority to accept in payment a note or anything other than cash, and his principal will not be bound by such an act, unless the latter, with full knowledge of the facts ratifies it. Reinhart Gro. Co. v. Knuckles, 172 Mo.App. 627, 155 S.W. 1105; Buckwalter v. Craig, 55 Mo. 71; Wheeler v. Gwan, 65 Mo. 89; Rinehart Gro. Co. v. Powell, 158 Mo.App. 458, 138 S.W. 909, 31 Cyc. 1375; Miller v. Peoples' Savings Bank, 193 Mo.App. 186, S.W. 347; Kelly v. Gay, Mo.App. 42. (5) A plea of payment is held in law to mean payment in money and if payment is other than by money, or if it rests on an independent agreement, the substantive facts of the agreement must be pleaded and cannot be shown under a general denial or a simple plea of payment. Peoples' Bank v. Stewart, 136 Mo.App. 24, l. c. 329, 330, 133 S.W. 70; First Nat'l Bank v. Hahan, 197 Mo.App. 600; Armstrong v. First Nat'l Bank, 195 S.W. 562. (6) The burden of proving payment is on the party alleging it. Berrell v. Kern, 121 S.W. 774, 141 Mo.App. 5; Stiltemeier v. Barrett, 122 S.W. 1095, 145 Mo.App. 54; Union Biscuit Co. v. Springfield Grocer Co., 126 S.W. 996, 143 Mo.App. 300; West Pub. Co. v. Corbit, 145 S.W. 868, 165 Mo.App. 7; Harrison v. Doyle, 147 S.W. 504, 163 Mo.App. 602; Loken v. Miller, 9 N.D. 512, 84 N.W. 368.
M. E. Morrow for respondent.
(1) Direct evidence is not required to prove an agency. It may be established by circumstances and conduct of parties, and relations previously existing between them. Hull v. Jones, 69 Mo. 587; Mitchum v. Dunlay, 98 Mo. 418; Werth v. Ollis, 61 Mo.App. 401; New Albany W. Mills v. Meyer, 43 Mo.App. 124. (2) A note payable at a particular bank that negotiated the loan and has the note in its possession at maturity and receives payment from maker, the latter is discharged, even tho the bank afterwards fails and does not remit proceeds to holder. Baldwin Bank v. Smith, 109 N.E. 138; Nineteenth Ward Bank v. Bank, 67 N.E. 670; Jolly v. Huebler, 132 Mo.App. 675. (3) The rights of third parties dealing with an agent are controlled by the agent's apparent authority, and not simply by his actual authority expressly given him by his principal. Sharp v. Knox, 48 Mo. App., 169; McLachlin v. Barker, 64 Mo.App. 511; McNichols v. Nelson, 45 Mo.App. 446; Bank v. Mutual Benefit Life Insurance Co., 145 Mo. 127. (4) The rule is settled that a debtor is authorized to infer that an agent employed to negotiate a loan is empowered to receive both principal and interest from his having possession of the securities, especially if allowed to collect interest, he will be presumed to be authorized to collect the principal. Jolly v. Huebler, 132 Mo.App. 675; Whelan v. Reilly, 61 Mo. 565; Dawson v. Wombles, 111 Mo.App. 532; Johnson v. Hurley, 115 Mo. 513; Bank v. Mutual Benefit Life Insurance Co., 145 Mo. 138; Mechem on Agency, sec. 84; Meyer v. Hebner, 96 Ill. 400; Baker v. Elstner, 24 La. Ann. 464; Doyle v. Corey, 170 Mass. 337, 49 N.E. 651; Donaldson v. Wilson, 44 N.W. 429; McMahon v. Bank, 111 Minn. 313; Berkley v. Stewart, 143 N.W. 920; Lawson v. Carson, 50 N.J.Eq. 370; Central Trust Co. v. Folsom, 60 N.E. 599; Corbett v. Waller, 67 P. 567. (5) Payment to a third party with consent of the holder of a note is sufficient payment; especially if same has been placed with such third party for collection. Groves v. Brown, 11 Mass. 334; Cooper v. King, 64 S.E. 288. (6) Payment to proper officer of a bank at which the note is made payable, when such officer has possession of the note is binding on the holder and discharges the maker. Ward v. Smith, 7 Wall. 447; Scott v. Gilkey, 39 N.E. 265; Lozier v. Horan, 55 Iowa 75; Ingalls v. Fiske, 34 Me. 232; Osborne v. Baird, 45 Wis. 189.
Plaintiff filed his bill in equity against J. P. Wallin and J. P. Aldridge praying for an injunction to enjoin the sale of certain land under a deed of trust. On trial the temporary writ was made perpetual, and defendants appealed.
Defendant Aldridge was the sheriff and is not concerned except as acting trustee. The controversy is between plaintiff and defendant Wallin. When using the word defendant hereinafter we have reference to defendant Wallin, who resided at New Windsor, Illinois. In November, 1913, defendant placed $ 300 with the Citizens Bank of Pomona in Howell county for the purpose of loaning said money. On November 25, 1913, the bank, acting for defendant, loaned the three hundred dollars to plaintiff and his wife, taking their note payable to defendant, and due in five years, with interest at six per cent. payable annually at Citizens Bank of Pomona. The note was secured by a trust deed on plaintiff's land. Plaintiff paid the interest annually at said bank, and the bank remitted to defendant. On October 18, 1920, plaintiff attempted to pay off this note. The transaction was with the Citizens Bank of Pomona, and the question is: For whom was the bank acting?
One Lewis was cashier when the $ 300 was loaned for plaintiff, but later one A. L. Babb was cashier, and was such during the transactions of importance here. Annually plaintiff paid the interest on this note at the Citizens Bank, and these interest payments were credited on the note. Plaintiff owed another note of about $ 600, mentioned in the record as the Woods note. Babb, it seems, represented plaintiff in borrowing $ 1000 from a Mrs. Bruner. Plaintiff purposed to pay the Wallin and Woods notes out of the proceeds of the Bruner loan. On September 27, 1920, Babb wrote defendant as follows:
"THE CITIZENS BANK OF POMONA
Capital Stock $ 10,000
Pomona, Mo., Sept. 27, 1920.
Mr. J. P. Wallin,
New Windsor, Ill.
Dear Sir: Please send the J. H. Farmer note and trust deed given to you to us, and the same will be paid, as he wishes to pay this off. Please send all papers connected therewith. Yours very truly, (Signed) A. L. Babb, Cashier."
In reply defendant caused to be sent the note and trust deed to the Citizens Bank with the following letter:
"BANK OF WINDSOR
C. C. CRAIG, BANKER.
New Windsor, Ill. September 30, 1920.
The Citizens Bank of Pomona,
Pomona, Mo.
Gentlemen: We are mailing you note executed by Jas. H. Farmer and Emma Farmer in favor of J. P. Wallin together with trust deed securing said note. Mr. Wallin states that it is by your instruction that he asks to have these papers mailed to you as payment of this note is to be made. When payment of this note is made to you, you may deliver trust deed to Mr. Farmer, and remit proceeds to us for Mr. Wallin. Please collect your charges in this matter from Mr. Farmer as it is to his convenience that these papers are mailed to you. Thanking you for your attention to this matter, we are, Yours truly, (Signed) H. G. Peterson, Cashier."
On October 15, 1920, the cashier of the Bank of New Windsor wrote again as follows:
"The Citizens Bank of Pomona,
Pomona, Mo.
Gentlemen: On September 30, we mailed you for collection note and mortgage executed by Jas. H. Farmer and Emma Farmer in favor of J. P. Wallin. It was for the convenience of Mr. Farmer that these papers were sent to you as Mr. Wallin understood that same was to be paid at once. Please advise fate of these papers and if unable to collect please return papers. Thanking your for your attention to this matter, we are, Yours truly, (Signed) H. G. Peterson, Cashier."
Babb returned this letter with pencil notation on bottom as follows: ...
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