Jolly v. Huebler

• Decision Date: 05 October 1908
• Citation: 112 S.W. 1013,132 Mo.App. 675
• Parties: SAMUEL T. JOLLY, Respondent, v. FRED E. HUEBLER et al., Appellants
• Court: Kansas Court of Appeals

112 S.W. 1013

132 Mo.App. 675

SAMUEL T. JOLLY, Respondent, v. FRED E. HUEBLER et al., Appellants

Court of Appeals of Missouri, Kansas City

October 5, 1908

Appeal from Callaway Circuit Court.--Hon. Alexander H. Waller Judge.

Judgment reversed.

David H. Harris for appellants.

(1) This being an equity case, the appellate court will review the whole evidence for the purpose of determining the case on its merits. Nichols v. Nichols, 39 Mo.App. 291; Drosten v. Mueller, 103 Mo. 634; State ex rel v Jarrott, 183 Mo. 204; Rumsey Mfg. Co. v. Kaime, 173 Mo. 551. (2) A general agent is one who is authorized to do all acts connected with a particular trade, business or employment. 1 A. & E. Ency. Law (2 Ed.), p. 985, and authorities there cited. When an agency is shown to exist the presumption would be that the agent's authority was general, rather than limited. Sharp v. Knox, 48 Mo.App. 169; Trainer v. Morrison, 78 Me. 160. Agency and extent thereof is to be gathered from all the facts and circumstances in evidence. Reynolds v. Railroad, 114 Mo.App. 674; Mitchum v. Dunlap, 98 Mo. 418; Nicholson v. Golden, 27 Mo.App. 132. (3) Authority to transact all the business of the principal confers power to sign and transfer negotiable paper. Bartley v. Rawley, 1 Swan (Tenn.) 295; Auldjo v. Dougall, 3 U. C. Q. B. (O. S.), 199. An endorsement on a promissory note may be made by the agent of the owner, even though his authority was conferred orally. And neither his agency nor his authority need appear on the instrument itself. Bank v. Bank, 90 Mo.App. 205; Dawson v. Wombles, 111 Mo.App. 541; Goodyear v. Williams (Kan.), 85 P. 300; Mechem on Agency, sec. 373; Webster v. Wray, 17 Neb. 579; Mill Co. v. Bank, 52 Minn. 224. (4) A debtor is authorized to infer that an agent employed to negotiate a loan is empowered to receive payments of both principal and interest, from his having possession of the securities. Whelan v. Reilly, 61 Mo. 568; 1 A. & E. Ency. Law (2 Ed.), p. 1026; Hatfield v. Reynolds, 34 Barb (N. Y.) 612; Crane v. Gruenewald, 120 N.Y. 274. (5) The principal is bound by the acts of his agent within the apparent authority which the principal himself knowingly permits the agent to assume, or which he holds the agent out to the public as possessing. Johnson v. Hurley, 115 Mo. 513; Kinealy v. Burd, 9 Mo.App. 359; 1 A. & E. Ency. Law (2 Ed.), p. 989; Griggs v. Selden, 58 Vt. 561; Walsh v. Insurance Co., 73 N.Y. 5; Dodge v. McDonnell, 14 Wis. 553; 1 A. & E. Ency. Law (2 Ed.), p. 959; Rice v. Groffman, 56 Mo. 434; Baker v. Railroad, 91 Mo. 152; Hoppe v. Saylor, 53 Mo.App. 4; Willison v. Smith, 52 Mo.App. 133; Mechem on Agency, secs. 194, 195; Wharton on Agency, secs. 31, 32; 7 Cyc. 1031; White v. Genobles, 12 Rich. (S. C.), 311; Vinson v. Vives, 24 Law Am. 336; Stevens v. Hill, 29 Me. 133; Greve v. Schweitzer, 36 Wis. 554; Johnson v. Jones, 4 Barb. 373; Perkins v. Insurance Co., 4 Comst. 645; Bank v. Morton, 1 Hill 501; Bank v. Aston, 11 Wend. 87; Howe Machine Co. v. Snow, 32 Iowa 433; Sumner v. Saunders, 51 Mo. 89; Story on Agency, secs. 137-127, n. 2; Ingalls v. Averitt, 34 Mo.App. 371; Bonner v. Lisenby, 86 Mo.App. 665; Franklin v. Insurance Co., 52 Mo. 465.

Robert McPheeters and N. D. Thurmond for respondent.

(1) It is immaterial whether Jolly held the genuine note or Penn retained the genuine and gave Jolly the forged note. The note which Huebler admits he gave Penn for Jolly was payable to the order of Jolly and Penn could not change the ownership by unlawfully indorsing Jolly's name. Hair v. Edwards, 104 Mo.App. 213. (2) The question of agency and the extent of the agency is one of fact. As a question of law the principal is liable for the acts of his agent when the agent's acts are within the scope of his agency. If respondent, Jolly, made Penn his agent for any specified purpose or led the appellant to believe he was his agent for such purpose, then respondent would be liable for the acts of Penn within the scope of his agency. (3) There is no evidence in the case that Jolly ever authorized Penn to collect this note. The whole evidence goes to show that Jolly did not want to collect it. He was doing all he could to keep his money at interest. Penn was making loans of his money to accommodate Penn's customers but not in the collecting business. (4) If Huebler had written to Jolly or directed Toedtmann to do so and requested him to send his note to this bank indorsed to Toedtmann, Penn would not have had the opportunity to defraud either of these parties. Ferneau v. Whitford, 39 Mo.App. 311; Cummins v. Hurd, 49 Mo.App. 139; Lee v. Clark, 89 Mo. 553. Note placed in hands of agent or attorney for collection does not authorize its sale. Quigley v. Bank, 80 Mo. 289. Authority to manage one's business such as buying and feeding stock does not authorize agent to sell. Newberry v. Durand, 87 Mo.App. 297.

OPINION

JOHNSON, J.

Action in equity to obtain the cancellation of a release of a deed of trust in the nature of a mortgage on the ground that the release was made and entered on the margin of the record without authority from plaintiff, the owner and holder of the instrument, and of the promissory note, the payment of which it secured. Personal judgment for the amount of the debt against the makers of the note, and foreclosure of the lien of the deed of trust are included in the relief prayed for in the petition. Plaintiff prevailed in the trial court and the cause is here on the appeal of defendants.

Material facts disclosed by the evidence are as follows: Plaintiff is a very old man living in Fulton, who invested his money in real estate loans. In 1892, he loaned twelve hundred dollars to a Mr. Smith, and received as security a deed of trust on eighty acres of land in Calloway county. When interest on this loan matured, it was paid by Smith to W. R. Penn, a real estate agent and loan broker in Fulton, and plaintiff received the proceeds of such payments from Penn. In September, 1897, Smith sold the farm to defendant Huebler for eighteen hundred and fifty dollars, with the understanding that Huebler should pay six hundred and fifty dollars in money and obtain a transfer of the loan in a way to release Smith from his obligation to plaintiff. Huebler was a stranger to plaintiff and Smith went with him to Fulton to assist in procuring a loan for him. They called on Penn at his office, stated their business and were informed by him that it was not necessary for them to see plaintiff as he (Penn) was plaintiff's agent. In answer to the suggestion made by Huebler's brother who was present, Penn said, "There is no use; I am his agent; I do all of his business, collect his interest and make his notes." Penn, acting for plaintiff, then agreed to loan Huebler twelve hundred dollars on the land, and prepared a negotiable promissory note for that amount dated September 10, 1897, due one year after date, payable to the order of plaintiff and bearing interest at the rate of eight per cent per annum payable annually. Huebler immediately signed the note and left it with Penn. A deed of trust was prepared by Penn and given to Huebler who took it to his home in another town for the signature of his wife, and after execution and acknowledgment by both him and his wife, delivered it to Penn at Fulton, who, in turn, delivered it to plaintiff. But plaintiff was not given the note executed by Huebler. Penn fraudulently kept that in his possession and to satisfy plaintiff, made a duplicate note to which he forged the names of Huebler and his wife, and gave it to plaintiff as the original note. Plaintiff filed the deed of trust with the recorder of deeds, but after it was recorded it fell into the hands of Penn in some manner not disclosed, and thereafter Penn had possession of both note and trust deed, and plaintiff had nothing but the forged note. Penn released the Smith deed of trust on the margin of the record. In March of the following year, Huebler agreed to sell the land to a Mr. Calicott, who, in order to make payment of the purchase price, tried to secure a loan of twelve hundred and fifty dollars. Huebler and Calicott applied to plaintiff personally for the loan. Huebler testified: "Mr. Calicott and I went to Mr. Jolly to see him about the loan, if Mr. Calicott could get this money that I had. Mr. Jolly told us that he could not do anything for us; that Mr. Penn was transacting his business and was his agent, and that he could not do anything for us; for us to go to Mr. Penn; that he would do the business, and whatever he did was satisfactory to him. Q. What else did he say with reference to Mr. Penn collecting the interest and note? A. He told us that when it came due to go to Mr. Penn. Q. That interest was to be paid to Mr. Penn? A. Yes, sir."

They went to Mr. Penn who refused the loan and the proposed sale was abandoned. Huebler paid interest on the note as it matured for three years, and then quit paying. All of the payments were made to Penn, the first one at his office, and the others by remittance. After the note became due, no demand was made for the principal, but Penn wrote some letters to Huebler of a severe tenor, threatening to foreclose if the interest were not paid. In 1902 Huebler made arrangements to have the loan carried by August Toedtmann of Hermann, and had his attorney write to Penn to forward the deed of trust and note to a bank at Hermann for collection. Penn endorsed on the back of the note "For value received, I hereby assign the within note to August Toedtmann without recourse," and signed plaintiff's name to the endorsement and forwarded the note and deed of trust to the Hermann bank. Toedtmann paid the full amount then due on the note to the bank and the proceeds were forwarded to Penn, who converted them to his own...