Marshall v. Ferguson

• Decision Date: 15 April 1902
• Citation: 67 S.W. 935,94 Mo. App. 175
• Parties: MARSHALL v. FERGUSON.
• Court: Missouri Court of Appeals

67 S.W. 935

94 Mo. App. 175

MARSHALL v. FERGUSON.

Court of Appeals of St. Louis, Missouri.

April 15, 1902.

AGENTS — VIOLATION OF INSTRUCTIONS — LIABILITY TO PRINCIPAL — DEFENSES — BURDEN OF PROOF — INSTRUCTIONS — APPEAL.

1. Where on a former appeal the court ruled that the petition sufficiently stated a cause of action to let in evidence in its support, over defendant's oral objection made at the outset of the trial, and defendant neither demurred nor moved for more definite averments on the second trial, but merely urged the same objections, his assignment of error based on the alleged failure of the petition to state a cause of action will be disregarded.

2. If an agent directed to loan money to a third party, and to take as security a deed of trust, violates his instructions by including in the trust deed a note owed by the third party to himself, without his principal's knowledge or consent, the latter may entirely ignore the deed of trust, and look to the agent himself for the money loaned.

3. The burden is on the principal in such a case to show that the agent included the note in the deed without his knowledge or consent.

4. The fact that the agent acted without compensation was no defense.

Appeal from circuit court, Butler county; James T. Fort, Judge.

Action by John B. Marshall against Thomas D. Ferguson. Judgment for plaintiff, and defendant appeals. Reversed.

Phillips & Phillips and Dinning, Hamel & Dinning, for appellant. N. A. Mozley, A. D. Hight, and G. A. Spann, for respondent.

GOODE, J.

It was ruled by this court on a former appeal that the petition in the cause above entitled sufficiently stated a cause of action to let in evidence in support of its allegations over the oral objection of the defendant made at the outset of the trial; and as the defendant neither demurred nor moved for more definite averments, as he might have done, but merely urged the same objections on the second trial, we will disregard his assignment of error based on the alleged failure of the petition to state a cause of action. It would be unjust to permit the defendant to avail himself of that point now, when it was determined against him before, and he has since omitted to take measures to compel a more particular pleading. Marshall v. Ferguson, 78 Mo. App. 645. The action was brought to recover a sum of money advanced by Marshall to Ferguson, to be lent to M. L. Freeman, of Butler county, on the security of an undivided one-eighth interest in a parcel of land in Poplar Bluff, or near there, known as the "Fair Grounds." At the inception of the transaction, Marshall himself was the owner of that interest, and he and Freeman were considering a trade by which Marshall would exchange his said interest in the Fair Grounds for a sawmill owned by Freeman. Freeman needed to raise about $213 in cash to pay off a note to the Missouri Trust Company, secured by a mortgage on a farm of his, before the trade could be effected; and Marshall got Ferguson, who was the agent of said trust company, to make a loan to Freeman of the sum required; he (Marshall) furnishing the money, and directing Ferguson to take a deed of trust to secure it on the interest in the Fair Grounds property after it should be conveyed to Freeman. Ferguson himself held a mortgage on Freeman's farm, junior to the trust company's, to secure a note for $312.50; and, when he took the deed of trust to secure the money lent by Marshall (which loan was to be, and was, made in Ferguson's name, and the note afterwards assigned to Marshall), he included in said deed his own note against Freeman; so that, instead of the instrument being a lien on the one-eighth interest in the Fair Grounds for only $213 in favor of Marshall it was also a lien for $312 in favor of Ferguson. The issue of fact between the parties is whether Ferguson's act in further securing his own note was done without Marshall's knowledge, or by his authority, and there was a direct conflict in the evidence bearing on that issue. Marshall testified that he neither authorized the loading of his security with Ferguson's note, nor knew it had been done until Freeman had defaulted and he was about to foreclose, when he immediately taxed Ferguson with bad faith, and notified him he must pay the loan. Ferguson swore the Fair Grounds tract was worth enough to secure both notes well, and that Marshall authorized him to include his own note in the deed of trust. The jury settled the facts in respondent's favor, and we are only concerned with appellant's assignments of error, — chiefly, the rulings on the instructions requested.

The court charged the jury that if the appellant undertook to act as the agent of the respondent in making a loan to Freeman, and was directed to secure the loan by a deed of trust on an eighth interest in the Fair Grounds, but violated his instructions by including in the deed of trust the note to himself, without the respondent's knowledge or consent, the respondent had the right to entirely ignore the deed of trust as security, and look to the appellant for his money. Appellant's counsel contended, in opposition to the theory embodied in that charge, that, if respondent recovered at all, he should only recover the loss sustained by him after collecting as much of his debt as possible by enforcing the lien of the deed of trust, and submitted the following instruction setting out that view, which the court refused to give: "The court instructs the jury that, if you believe and find from the evidence that the one-eighth interest of the land described in plaintiff's petition was of value sufficient to secure the payment of both of the notes in the deed of trust described, then plaintiff cannot recover herein, and your verdict should be for the defendant." When a loss results...