Hallenbeck v. Regional Agricultural Credit Corporation of Salt Lake City, Utah, a Corp., Civil 3706
| Decision Date | 20 April 1936 |
| Docket Number | Civil 3706 |
| Parties | H. D. HALLENBECK and KATHERINE A. HALLENBECK, Husband and Wife, Appellants, v. REGIONAL AGRICULTURAL CREDIT CORPORATION OF SALT LAKE CITY, UTAH, a Corporation, Appellee |
| Court | Arizona Supreme Court |
APPEAL from a judgment of the Superior Court of the County of Yuma. Henry C. Kelly, Judge. Judgment affirmed.
Mr Fred L. Ingraham, for Appellants.
Mr William H. Westover, for Appellee.
The appellee, Regional Agricultural Credit Corporation of Salt Lake City, Utah, on October 4, 1933, loaned to appellants, H D. Hallenbeck and Katherine A. Hallenbeck, husband and wife the sum of $1750 and took their promissory note therefor, due three months after date, bearing interest at 6 1/2% per annum, and as security for its payment accepted two warehouse receipts issued by the Alfalfa Seed & Lumber Company of Yuma for 35,215 pounds of No. 1 alfalfa seed.
This action was filed December 3, 1934, and is for a balance of $497.70 and interest and an attorney's fee of $150.Defendants' answer denies that there is any balance owing plaintiff and alleges that on or about December 28, 1933, plaintiff appointed the Alfalfa Seed & Lumber Company (warehouseman) its agent to "disperse" the alfalfa seed and to collect six cents per pound therefor, and that said agent made collections in the sum of $2,112.90, sufficient to pay the note in full together with all interest.
The case was tried before the court without a jury and at its close judgment was rendered in favor of the plaintiff for the balance sued for, together with interest, and an attorney's fee of $50. Defendants have appealed.
The vital question is whether the plea of payment has been sustained by the defendants.
The complaint admits the defendants have paid on the principal of the note $1252.30, as follows:
March 1, 1934
$ 566.75
March 3, 1934
146.50
March 7, 1934
351.75
March 10, 1934
and that such payments were made by the Alfalfa Seed & Lumber Company. This admission is contained in a letter from the plaintiff to the defendants. The evidence also shows that the Alfalfa Seed & Lumber Company sold all of the pledged property but failed to remit to plaintiff any sum above $1,252.30.
The authority of the Alfalfa Seed & Lumber Company to sell the alfalfa seed is involved and, if it is settled that it had authority to sell, the next question is whose agent under the circumstances was it, and who should suffer for its defalcation. Bearing directly upon these questions is the following correspondence between plaintiff and defendants. The first of such letters was written by defendant H. D Hallenbeck to plaintiff and reads:
Plaintiff's response to the above was as follows:
Following these two letters plaintiff wrote several letters to defendants recognizing the agency of the Alfalfa Seed & Lumber Company to sell the pledged property and acknowledging remittances which it applied on note in part payment. The letters from plaintiff to defendants were signed by Frank McNichol as "Acting Manager," "Manager Arizona Division" and one of such letters was signed by him as "Assistant Manager." It was he through whom the loan was negotiated and the warehouse receipts pledged as security.
Much of the trial, too much indeed, was taken up in quibbling over the agency of McNichol and his power or right to appoint the Alfalfa Seed & Lumbe Company as agent to sell the pledged property and collect therefor, it being contended by plaintiff that proof of his agency and the extent thereof were necessary before any of the correspondence between plaintiff and defendants or from plaintiff to the Alfalfa Seed & lumber Company was competent. This contention and the rulings sustaining it were under the circumstances entirely wrond. Whether McNichol originally had authority to make the loan and accept pledge for its payment, or to arrange for the disposition of the pledged property, as he did, we think makes no difference whatever, since the plaintiff had clearly and fully ratified what he did. It advanced the money accepted the pledge and recognized the authority of the Alfalfa Seed & Lumber Company to sell the pledge by knowingly accepting from it receipts of such sale or sales, and is now in court seeking the enforcement of rights it acquired through the acts of McNichol. All of this took place with the full knowledge of the plaintiff. Together these things certainly would dispense with proof of McNichol's agency and right to act for plaintiff. Am. Law Institute's Restatement of the Law of Agency, § 97; 21 R.C.L. 927, § 106; 2 C.J. 470, § 83. Until the note was past due and unpaid the plaintiff had no right to apply the pledged property to the payment of the note. After default in payment plaintiff, under the law, could advertise...
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