Huismann v. Althoff
| Decision Date | 21 June 1926 |
| Docket Number | 36668 |
| Citation | 209 N.W. 525,202 Iowa 70 |
| Parties | WEERT HUISMANN, Appellee, v. GERTRUDE ALTHOFF et al., Appellants |
| Court | Iowa Supreme Court |
Appeal from Lyon District Court.--WILLIAM HUTCHINSON, Judge.
Action to cancel a mortgage upon real estate. There was a cross-petition, asking the foreclosure of the mortgage. The opinion states the facts. From a decree for plaintiff, the defendants appeal.
Reversed.
Fisher & Riter, for appellants.
Riniker & Thomas, for appellee.
VERMILION J. DE GRAFF, C. J., and STEVENS and FAVILLE, JJ., concur.
On March 1, 1915, the appellee, Weert Huismann, and his wife executed the mortgage in question, to secure a note for $ 13,500, due March 1, 1920, payable to the order of William Althoff, at the First National Bank of Ellsworth, Minnesota. The note represented a part of the purchase price of the mortgaged premises, a farm in Lyon County, Iowa, purchased from Althoff by Huismann. William Althoff, the payee of the note, died October 15, 1915, and the appellant Kate Althoff, his widow, and the beneficiary under his will, became the owner of the note and mortgage. Appellant and her husband moved from Ellsworth to Tintah, Minnesota, in 1914 or 1915.
The note bears indorsements showing the payment thereon of $ 5,000 on March 29, 1919, and $ 3,300 on November 11, 1919. There is no dispute over these payments, and it is conceded that the $ 3,300 credit represented Liberty bonds, accepted at par. There is also no dispute that the $ 5,000 was paid through one C. A. Bird, or the First National Bank of Ellsworth, and that the Liberty bonds were turned over to the bank or Bird by appellee, and later delivered to the son of appellant for her.
It is the contention of appellee that, at the time the $ 5,000 was paid and the Liberty bonds turned over to the bank, he also gave to Bird or the bank sufficient money to pay the remainder of the principal and the interest due on the note. There is no claim that the note was then in the possession of the bank or Bird. The exact date of this transaction is not certainly fixed by the testimony on behalf of appellee, further than that it was in 1919.
On December 14, 1921, appellee paid to appellant $ 922.30 interest on the mortgage debt. He claims that this was paid under a mistake, and, in addition to the cancellation of the mortgage, asked to recover the amount so paid. The full relief asked was granted.
C. A. Bird was, until sometime in January, 1919, cashier of the First National Bank of Ellsworth, and after that, occupied a room in the rear part of the bank building, and engaged in the real estate business. He had also been engaged in that business while cashier of the bank, and had acted for William Althoff in selling the farm in question to appellee. Much is said in the record and in argument about the relation of Bird to the bank. We regard the question as quite immaterial, in the view we take of the case.
The case turns upon whether appellee made the payment in question to either Bird or the bank as the agent, or purported agent, of appellant; and, if so, whether the one to whom such payment was so made was the agent of appellant to receive payment of the note, or whether appellant had, by her words, acts, or conduct, so clothed such alleged agent with apparent authority to receive payment as that appellee, as a reasonably prudent man, was justified in making the payment without the note's being in the hands of the alleged agent. Wolford v. Young, 105 Iowa 512, 75 N.W. 349; Bissell v. Spring, 179 Iowa 1005, 162 N.W. 245; McCullough v. Reynolds, 181 Iowa 1089, 165 N.W. 333; Sioux City C. L. Co. v. Lovrien, 198 Iowa 296, 197 N.W. 914.
I. Taking up first the question of agency, we think there is no proof of actual or apparent authority on the part of either Bird or the bank to receive payment of the note as the agent of appellant. Any agency of Bird for William Althoff, the payee of the note, growing out of the sale of the land or otherwise, terminated on the death of the latter. Darr v. Darr, 59 Iowa 81, 12 N.W. 765.
The note was payable at the bank, but that alone did not create an agency in the bank to receive payment of the note, especially in the absence of the note and before maturity. Bank of Montreal v. Ingerson, 105 Iowa 349, 75 N.W. 351; Keene Five Cents Sav. Bank v. Archer, 109 Iowa 419, 80 N.W. 505.
There is not a word of testimony tending to show that express authority was conferred upon Bird or the bank by appellant to receive payment of the note. Such authority could not be shown by the declarations of Bird, as testified to by appellee and his son Klaus. Lavelleur v. Nugent, 186 Iowa 234, 172 N.W. 197. Not only does Bird's testimony fail to establish any agency on the part of himself or the bank, but he expressly denies the existence of such relation.
The only transaction with the bank or Bird in which appellant is shown to have had any part, directly or indirectly, or through any person acting for her, prior to the payment in question, was the collection of interest coupons, which were paid by appellee at the bank. The authority of an agent to receive the interest on a note does not authorize one to pay him the principal. Security Company v. Graybeal, 85 Iowa 543, 52 N.W. 497; Klindt v. Higgins, 95 Iowa 529, 64 N.W. 414; Kucher v. Scott, 96 Wash. 317 (165 P. 82). Moreover, the evidence shows that the coupons were sent to the Ellsworth bank, not by the appellant, but by a bank at Tintah, to which they appear to have been given for collection. No direction by appellant that this should be done, or even knowledge on her part that it had been done, was shown.
The appellant received the $ 5,000 payment and the Liberty bonds. This amount was paid, and the bonds turned over to Bird or the bank, according to the claim of appellee, in the same transaction in which the payment in dispute was made. Aside from the testimony as to the declarations of Bird, there is no evidence of any conversation, correspondence, or transaction with, or on behalf of, appellant concerning this payment, prior to its being made. Tony Althoff, appellant's son, testified that, before they moved from Ellsworth, there was an understanding that appellee might pay any sum on the note at any time. This was before the death of the payee of the note. The most that can be said of the payment of the $ 5,000 is that appellant received it from Bird or the bank.
In this situation, the doctrine contended for by appellee, that a principal must ratify or reject in its entirety the act of one assuming to act as his agent, and cannot ratify the advantageous part and reject the other, has no application. In the absence of any knowledge to the contrary,--and none was shown,--appellant had certainly as much right to assume that the one sending the money was acting as the agent of the appellee, the debtor, as that he had assumed, without authority, to represent her in collecting it.
Furthermore, the appellant accepted only what was due her, in any event, and what appellee was, in any event, ultimately bound to pay, and had a right to then pay. The acceptance of this, although received from one who had, without authority, assumed to act for her, did not amount to a ratification of the unauthorized act of the one from whom it was received, in accepting a further sum, when she had not only no knowledge of the unauthorized act, but no knowledge of the assumed agency. Roberts v. Rumley, 58 Iowa 301, 12 N.W. 323; Groeltz v. Armstrong Real Estate Co., 115 Iowa 602, 89 N.W. 21; Bristol Sav. Bank v. Judd, 116 Iowa 26, 89 N.W. 93; McIntosh & Cathro v. Penney, 190 Iowa 194, 180 N.W. 177.
The evidence shows that the bonds were not accepted as of the date they were turned over to Bird or the bank, but on November 20, 1919, and then by appellant's son in person. Tony Althoff testified that, after the receipt of the $ 5,000, about March 29, 1919, they received some correspondence relative to an additional payment in government bonds, and after that, he came to Ellsworth, and, after some talk about the bonds, he accepted them. Bird testified:
"I had written to the Althoffs regarding these Liberty bonds, and they would not accept them at their face value, but, on coming down in person and talking with Mr. Huismann, they agreed to take them, and this deal was then made."
He testified that he wrote to the Althoffs at the request of the Huismanns. The testimony of appellee and his son is contradictory of this only in respect to the declarations of Bird, and that he wrote appellant at their request. The son testified that the bonds were delivered to Althoff in November, and it is undisputed that the amount for which they were taken was credited on the note as of the date of this delivery. There is not only no ratification here, but, on the contrary, a clear notice to appellee that Bird did not have such authority as appellee testified he claimed to have. There is no suggestion in the evidence that appellee then insisted that the bonds should be credited as of the date of their delivery to Bird,...
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