Ilgenfritz v. Mutual Ben. Life Ins. Co.

• Decision Date: 26 May 1897
• Citation: 81 F. 27
• Parties: ILGENFRITZ v. MUTUAL BENEFIT LIFE INS. CO. OF NEWARK, N.J.
• Court: U.S. District Court — Western District of Missouri

81 F. 27

ILGENFRITZ v. MUTUAL BENEFIT LIFE INS. CO. OF NEWARK, N.J.

United States Circuit Court, W.D. Missouri, Central Division.

May 26, 1897

G. W Barnett, for complainant.

Montgomery & Montgomery, for defendant.

PHILIPS District Judge.

In 1885 the complainant, through James C. Thompson, of Sedalia, Mo obtained from the defendant a loan of $25,000, secured by deed of trust upon real estate. On the maturity of the principal of this debt, she obtained, through said Thompson an extension of the loan for five more years. As the coupons of interest became due, they were forwarded by defendant company to the First National Bank of Sedalia, Mo., for collection, with appropriate indorsements thereon, authorizing the bank to collect the same. Thompson was the cashier of said bank. When these coupons were paid by complainant, the money was forwarded by Thompson to the defendant, at Newark, N.J. These payments of interest were made by checks given by complainant on said Sedalia bank, where she usually kept her deposits; or the money would be forwarded by the bank, and charged up to the account of the complainant, with her knowledge and consent. C. E. Ilgenfritz, the son of the complainant, seems to have had a general power of attorney from her for attending to her business affairs. On the 1st day of October, 1892, said C. E. Ilgenfritz called to see said Thompson, and made inquiry as to whether his mother would be permitted to make a payment on said note prior to maturity thereof, and upon the mere assurance of Thompson he gave a check, in the name of his mother, M. D. Ilgenfritz, on the First National Bank, payable to the said bank or order, for the sum of $7,000, with the understanding that it was to be applied as a payment on said note. Thompson neither then applied to the defendant to obtain permission to receive such payment, nor did he at any time inform the defendant of the payment of said sum of $7,000, or remit same to defendant. As the coupons of interest became due on the $25,000, the defendant, as heretofore, sent the coupons to said bank for collection. Thompson, the cashier, would collect from complainant the interest on the basis of the reduction of the principal of the debt by the $7,000 payment, but would account to the defendant as though no part of the principal debt had been paid. On the 3d day of October, 1893, said C. E. Ilgenfritz, for his mother, and in her name, drew a check on the Citizens' National Bank of Sedalia, payable to said First National Bank or order, for the sum of $5,540, which was intended by him to be an additional payment of $5,000 on the principal sum of said debt, and the other $540 was to pay the then accrued interest upon the debt reduced by the former payment of $7,000, and took therefor the following receipt:

'Sedalia, Mo., Oct. 3, 1893.

'Received of Mrs. M. D. Ilgenfritz five thousand dollars, part payment on loan held by Mut. Ben. Life Ins. Co.

J. C. Thompson, Cas.

'$5,000.00.'

On the 5th day of October, 1893, after the receipt of said $5,000, said Thompson wrote to the defendant, stating that complainant desired to make a payment on the principal of said debt, and asking permission, if she did, to reloan the money to some other person. He gave no intimation to the defendant of either of said prior payments having been made. On the 9th of October, 1893, the defendant replied as follows:

'We have your favor of the 5th inst., written over the matter of the probable payment about to be made by Mrs. Ilgenfritz on account of the principal of her mortgage. In reply, we would say we prefer, if payment is made by her, that the amount be sent to us. The company does not at present desire to make other loans in your section.' The complainant continued thereafter to pay interest as theretofore on the basis of said supposed reductions of the principal debt, Thompson accounting to the defendant on the basis of the existence of the whole debt of $25,000. On the 4th day of May, 1894, the said First National Bank of Sedalia failed, and went into the hands of a receiver. Thompson was insolvent, and fled the country. The first intimation that defendant had of the payment of said sums of money by complainant was conveyed to it on the date of the failure of said bank, by the following telegram from said C. E. Ilgenfritz:

'Sedalia, Mo., May 4, 1894.

'Mutual Benefit Life Insurance Company, Newark, N.J.: At what dates did you receive the two payments made in 1892 and 1893, aggregating $12,000.00, on the Malinda Ilgenfritz mortgage on her property in Sedalia? Answer at my expense.

'(Signed) C. E. Ilgenfritz.'

The defendant not having received said money so paid by complainant, and the principal of said debt becoming due and remaining unpaid, the complainant, Mrs. Ilgenfritz, filed her bill herein, alleging a payment to defendant of $12,000 on the principal of said debt, and making tender of the balance due thereon, praying to have said mortgage satisfied and the whole of the debt declared paid. The defendant has filed a cross bill asking for a foreclosure of the mortgage. The question to be decided by the court is simply whether or not the payments made to the First National Bank of Sedalia were in law, payments to the Mutual Benefit Life Insurance Company. The payments in question were made to the bank. The checks in the name of M. D. Ilgenfritz, the complainant, were written by her agent, C. E. Ilgenfritz. The one for $7,000 was drawn on the First National Bank, in favor of said bank. The second one, for $5,000, was drawn on the Citizens' National Bank of Sedalia, in favor of the First National Bank. Both sums went to the First National Bank, and, without the knowledge or consent of the defendant, were credited by the bank on its books to defendant, and were diverted by the bank to the credit of some other debtor of the bank, with the exception of $5,000 later credited back to the defendant. But the entire sum of $12,000 was absorbed by the bank in its business. The evidence not only fails to show that Thompson individually received or appropriated a dollar of the money but his direct testimony is or appropriated a dollar of the money, but his direct testimony is that he did not. The face of this transaction, therefore, is that the $12,000 were paid by complainant to the First National Bank of Sedalia. To entitle her to credit therefor, the burden rests upon her to prove that the bank had authority from defendant to receive it, in the absence of ratification by defendant. There is scarcely a pretense for such a contention. It is not claimed that the bank had...