Jenkins v. Shinn

• Decision Date: 23 January 1892
• Citation: Jenkins v. Shinn, 18 S.W. 240, 55 Ark. 347 (Ark. 1892)
• Parties: JENKINS v. SHINN
• Court: Arkansas Supreme Court

18 S.W. 240

55 Ark. 347

JENKINS v. SHINN

Supreme Court of Arkansas

January 23, 1892

APPEAL from Pope Circuit Court, JORDAN E. CRAVENS, Judge.

Jenkins sued Shinn and two others upon their note for $ 230, executed to the American Desk and Stool Co. and indorsed to himself. Defendants answered that they had paid the note to one Dickerman, who was authorized by plaintiff to collect it. From the evidence it appeared that Dickerman, who constituted the so-called American Desk and Stool Co., had unconditionally transferred to plaintiff, by indorsement, two notes, executed by defendants, as collateral security for the payment of a note executed by him to plaintiff, and took a receipt therefor as follows:

"CHICAGO October 16, 1886.

"Received of American Desk and Stool Co., Chicago, two notes of following descriptions, both dated July 10, 1886: No. 1 for two hundred and twenty-five dollars, and No. 2 for two hundred and thirty dollars; No. 1 maturing June 1, 1887, and No. 2 maturing June 1, 1888; both payable at First National Bank, Little Rock, Ark. and bearing interest at 8 per cent per annum from June 1, 1886, signed J. L. Shinn, L. M. Smith and J. W. Pruitt. These notes are held by me as collateral security for the payment of a note of American Desk and Stool Co., of this date, for four hundred and fifty dollars ($ 450) in my favor, due four months from date at Oakland Bank Chicago, with 8 per cent. per annum interest.

"S P. JENKINS."

The first note was paid to Jenkins through the bank designated. Before the second note fell due Dickerman wrote to Shinn and proposed to discount it at $ 240. Thereupon Shinn, not knowing that the note had been negotiated, sent him a draft for the amount named, and requested the return of the note. The money collected was not paid to the plaintiff, nor was the balance due on the note, for the payment of which defendants' notes were placed as collateral security ever paid to plaintiff who still retained defendants' second note. The testimony is in conflict whether Dickerman was authorized to discount the note as agent for plaintiff. Over plaintiff's objection defendants were permitted to prove by Dickerman that when plaintiff executed to Dickerman the receipt before mentioned, it was distinctly understood that Jenkins was simply to hold the Shinn notes as collateral security and not to collect the same, and to say nothing to Shinn about holding the notes. Dickerman testified: "In pursuance of the understanding and agreement that I had with Mr. Jenkins that he was not to collect the collateral notes but that I was to collect the same, I opened up correspondence with Jenkins in the summer of 1887 for the purpose of getting the Shinn note that fell due June 1, 1888, and expecting Jenkins would send me the note as he had agreed to do. I negotiated with Mr. Shinn and finally discounted the note."

Among other instructions, the court charged the jury as follows:

"The law of estoppel is founded in reason and fact, and if you find from the evidence that the plaintiff, by his consent and acquiescence, permitted Dickerman to collect the money from the defendants, when it was his duty under all the circumstances and in the custom of fair dealing to have advised the defendants not to pay to him except at their own risk, and he failed to so advise them, and the payment was made to Dickerman in good faith by the defendants, the plaintiff is not entitled to recover."

"A promissory note, payable to order, is negotiable and payable to the legal holder thereof if indorsed and transferred before maturity, and a payment by the maker to the original payee after the transfer of the note will not ordinarily protect the maker from a suit by the legal holder, but a person can legally permit another to do that which he can himself do. And if the jury believe from the testimony that the plaintiff authorized, or knowingly permitted, the American Desk and Stool Co., or F. W. Dickerman, its manager, to either collect or negotiate a discount of the note in suit, and such collection or discount was effected, then the plaintiff is bound by the action of said company or F. W. Dickerman, its manager, and they will find for the defendant."

There was a verdict for the defendants.

Judgment reversed and cause remanded.

S. R. Allen and C. C. Waters for appellant.

1. Parol evidence was inadmissible to alter, vary, add to, take from, or materially affect the terms of a written contract, or to show an understanding or intent different from that expressed. 13 Ark. 593; ib., 449; 15 id., 543; 21 id., 69; 24 id., 210.

2. There is no question of estoppel in the case. The issue is, did Jenkins make Dickerman his agent to collect the note? There is no evidence to that effect. The burden was on appellee to show this authority.

3. The instructions on the subject of estoppel were not founded on any evidence whatever; the others complained of were misleading, confusing and prejudicial.

Dan B. Granger and G. W. Shinn for appellees.

1. The rule in 15 Ark. 543, as to parol testimony, applies only to parties to the contract; certainly not to parties to a suit where the contract may come collaterally in question. 1 Gr. Ev., 13th ed., sec. 279.

2. The answer presents a question of estoppel in pais, as well as of agency, or rather a mixed question of both, which was a good defense. 1 Gr. Ev., sec. 207; 17 N.W. 345.

G. W. Shinn and Dan B. Granger also for appellees.

1. There is proof that Jenkins held Dickerman out as his agent, and authorized him to discount the note. The jury believed it, and so found by their verdict, and this court will not reverse on the mere preponderance of the evidence. 51 Ark. 475; 40 id., 168, and many others.

2. Where a party fails to make his rights known when fairness and good conscience require he should do so, he is estopped, if another is injured by his failure. Herm. on Estoppel, secs. 787, 765 to 770, 774-6-7-9, 811.

3. The note was only indorsed as collateral and Dickerman had a right to collect it. 29 Ark. 501.

4. The acts of an agent bind his undisclosed principal. Mechem on Ag., secs. 695-6. He is estopped to deny the agency. Ib., secs. 83-4. One who knowingly permits another to make a collection for him is bound by payments made to such person. Mech. on Ag., sec. 86; 69 Iowa 760; 16 P. 762.

5. The judgment is right on the whole record, and should not be reversed on account of incompetent evidence, or instructions based thereon, which could not have prejudiced appellant. 44 Ark. 556; Mech. on...