Schafer v. Olson
| Decision Date | 15 March 1912 |
| Parties | SCHAFER v. OLSON |
| Court | North Dakota Supreme Court |
On rehearing February 13, 1913.
Appeal from the District Court for Nelson County; C. F. Templeton J.
From a judgment in favor of plaintiff, defendant appeals. Reversed.
Judgment reversed, and action dismissed.
H. A Libby, for appellant (Scott Rex, of counsel).
The People's State Bank of Lakota was the agent of Schafer and not the agent of Olson, in closing the land transaction. Rev. Codes, Sec. 5753; Welge v. Batty, 11 Ill.App. 461; McMullen v. People's Sav. & L. Asso. 57 Minn. 33, 58 N.W. 820; Waldman v. North British & M. Ins. Co. 91 Ala. 170, 24 Am. St. Rep. 883, 8 So. 666; McCarty v. Fremont, 23 Cal. 197; Sayre v. Nichols, 7 Cal. 535, 68 Am. Dec. 280; Ingraham v. Whitmore, 75 Ill. 24; Renwick v. Bancroft, 56 Iowa 527, 9 N.W. 367; Ruthven Bros. v. American F. Ins. Co. 92 Iowa 316, 60 N.W. 663; Appleton Bank v. McGilvray, 4 Gray, 518, 64 Am. Dec. 92; Underwood v. Birdsell, 6 Mont. 142, 9 P. 922; Furnas v. Frankman, 6 Neb. 429; Wright v. Boynton, 37 N.H. 9, 72 Am. Dec. 319; Daly v. Stetson, 22 Jones & S. 202, 10 N.Y. S. R. 453; Planters' Nat. Bank v. First Nat. Bank, 75 N.C. 534; McKinnon v. Vollmar, 75 Wis. 82, 6 L.R.A. 121, 17 Am. St. Rep. 178, 43 N.W. 800.
Even if Baird was Olson's agent, he could not delegate authority to banks to act as such agent. Lewis v. Ingersoll, 1 Keyes, 347; Stephens v. Badcock, 3 Barn. & Ad. 354, 1 L. J. K. B. N. S. 75; 23 Am. & Eng. Enc. Law, 93--and cases cited.
Agent's acts not ratified, unless all material facts and circumstances are made known to principal. 1 Am. & Eng. Enc. Law, 2d ed. 1189; Rust v. Eaton, 24 F. 830; Wheeler v. Northwestern Sleigh Co. 39 F. 347; Wheeler v. McGuire, 86 Ala. 398, 2 L.R.A. 808, 5 So. 190; Dean v. Bassett, 57 Cal. 640; Billings v. Morrow, 7 Cal. 171, 68 Am. Dec. 235; Hurley v. Watson, 68 Mich. 531, 36 N.W. 726; Colvin v. Peck, 62 Conn. 155, 25 A. 355; Stanley v. Chamberlain, 39 N.J.L. 565; Nichols v. Bruns, 5 Dak. 28, 37 N.W. 752; Combs v. Scott, 12 Allen, 493; Vincent v. Rather, 31 Tex. 77, 98 Am. Dec. 516.
An agent to collect, as a general rule, and in the absence of special instructions, has no authority to receive anything in payment, but money. But, where an agent bank for collection receives and accepts its depositor's check on open account in bank, as payment, and makes delivery of deed, draft and papers for which collection and payment were so made, such transaction constitutes payment. British & A. Mortg. Co. v. Tibballs, 63 Iowa 468, 19 N.W. 319; Welge v. Batty, 11 Ill.App. 461; Francis v. Evans, 69 Wis. 115, 33 N.W. 93; Bolles, Bkg. 557; Scott v. Gilkey, 153 Ill. 168, 39 N.E. 265; Pinkney v. Kanawha Valley Bank, 68 W.Va. 254, 32 L.R.A.(N.S.) 987, 69 S.E. 1112, Ann. Cas. 1912 B, 115; Winchester Mill Co. v. Bank of Winchester, 120 Tenn. 225, 18 L.R.A.(N.S.) 441, 111 S.W. 248; Holtan v. Beck, 20 N.D. 5, 125 N.W. 1048; Rev. Codes, § 7317, subdiv. 20; Morse, Banks & Bkg. 4th ed. § 248; Bolles, Bkg. 557; Sayles v. Cox, 95 Tenn. 579, 32 L.R.A. 715, 49 Am. St. Rep. 940, 32 S.W. 626; State ex rel. North Carolina Corp. Commission v. Merchants' & F. Bank, 137 N.C. 697, 50 S.E. 308, 2 Ann. Cas. 537; Smith Roofing & Contracting Co. v. Mitchell, 117 Ga. 772, 97 Am. St. Rep. 217, 45 S.E. 47; Harrison v. Legore, 109 Iowa 618, 80 N.W. 670; Hare v. Bailey, 73 Minn. 409, 76 N.W. 213; Oddie v. National City Bank, 45 N.Y. 735, 6 Am. Rep. 160; Howard v. Walker, 92 Tenn. 452, 21 S.W. 897; 1 Morse, Banks & Bkg. §§ 248-305; 3 Randolph, Com. Paper, §§ 1395-1456; Commercial Bank v. Union Bank, 11 N.Y. 213, 214; Briggs v. Central Nat. Bank, 89 N.Y. 182, 42 Am. Rep. 285; Pollak Bros. v. Nall-Herin Co. 35 L.R.A.(N.S.) 13, and cases cited in note, pp. 36 to 38; Board of Education v. Robinson, 81 Minn. 305, 83 Am. St. Rep. 374, 84 N.W. 105.
Frick & Kelly, for respondent.
The People's State Bank was Olson's agent. McCroskey v. Hamilton, 108 Ga. 640, 75 Am. St. Rep. 79, 34 S.E. 111; Breck v. Meeker, 68 Neb. 99, 93 N.W. 993; Rev. Codes, § 5794; McMullen v. People's Sav. & L. Asso. 57 Minn. 33, 58 N.W. 820; Fair v. Bowen, 127 Mich. 411, 86 N.W. 991; Dodge v. Tulleys, 144 U.S. 451, 36 L.Ed. 501, 12 S.Ct. 728; Kidd v. Cromwell, 17 Ala. 648.
There was no payment in this case. The delivery to and acceptance by the collecting agent bank, of depositor's check on open account in such bank, not a payment of claim in hands of such bank for collection. Moore v. Pollock, 50 Neb. 900, 70 N.W. 541; Ormsby v. Graham, 123 Iowa 202, 98 N.W. 724.
Agent cannot bind his principal by any arrangement short of an actual collection of the money. Cooney v. United States Wringer Co. 101 Ill.App. 468; Wilken v. Voss, 120 Iowa 500, 94 N.W. 1123; Everts v. Lawther, 165 Ill. 487, 46 N.E. 233; Holt v. Schneider, 57 Neb. 523, 77 N.W. 1086.
Agent not authorized to accept in payment of principal's claim, an indebtedness against himself. Plano Mfg. Co. v. Doyle, 17 N.D. 386, 17 L.R.A.(N.S.) 606, 116 N.W. 529; Union School Furniture Co. v. Mason, 3 S.D. 147, 52 N.W. 671; Deatherage v. Henderson, 43 Kan. 684, 23 P. 1082; Parker v. Leech, 76 Neb. 135, 107 N.W. 217; Western White Bronze Co. v. Portrey, 50 Neb. 801, 70 N.W. 383; Robinson v. Anderson, 106 Ind. 152, 6 N.E. 12; Smith v. James, 53 Ark. 135, 13 S.W. 701; St. John & M. Co. v. Cornwell, 52 Kan. 712, 35 P. 785; Talboys v. Boston, 46 Minn. 144, 48 N.W. 688; Lokken v. Miller, 9 N.D. 512, 84 N.W. 368.
Rule applies to bank receiving its own checks or certificates of deposit. Francis v. Evans, 69 Wis. 115, 33 N.W. 93; Bank of Montreal v. Ingerson, 105 Iowa 349, 75 N.W. 351; State Bank v. Byrne, 97 Mich. 178, 21 L.R.A. 753, 37 Am. St. Rep. 332, 56 N.W. 355; Re Johnson, 103 Mich. 109, 61 N.W. 352; Wallace v. Stone, 107 Mich. 190, 65 N.W. 113.
This is one of those unfortunate controversies wherein one of two innocent persons must suffer for the default of a third person, and the crucial question for decision is, Whose agent, in the transaction between the parties, was such third person, plaintiff's or defendant's?
The facts necessary to a correct understanding of the points involved are as follows:
On, and prior to December 18, 1909, plaintiff, a resident of Springfield, Illinois, being the owner in fee of the real property described in the complaint, a quarter section of land in Nelson county, this state, entered into an agreement to sell such land to the defendant Olson, for the sum of $ 4,500. Such contract was entered into through correspondence, the plaintiff having written to Olson a few days prior to December 18th, offering to sell the land to him at said price, the acceptance of which offer was communicated to plaintiff through a letter, Exhibit 1, written by one Thomas J. Baird to plaintiff, dated December 18th, as follows:
We are in receipt of your letter of the 13th inst. and herewith inclose you a check for $ 200, as part payment on the N.W. 1/4, 32-152-60. We also inclose you a warranty deed, which you can execute and have your Elkhart bank send to the People's State Bank of Lakota and we will take same up. If married you can fill in your wife's name.
We sold this land to Mr. Olson for $ 4,500, you to pay us a commission of $ 100, and Mr. Olson is to deliver your grain in the elevator free, which he will do as soon as possible. There will be $ 4,200 balance due you on this proposition less abstracting. Send us abstracts of title at once. We inclose you a receipt, which please sign and return to us.
Very respectfully,
Thomas J. Baird.
On receipt of the Baird letter, plaintiff delivered such letter to his local bank at Elkhart, Illinois, and also a duly executed warranty deed of this land running to Olson, and instructed such bank to forward such deed to the people's State Bank of Lakota, as suggested in Baird's letter.
On January 6, 1910, the Elkhart bank, through plaintiff's son as cashier, wrote the Thomas J. Baird Investment Company at Lakota as follows:
Gentlemen:--
I am this day forwarding by registered letter to the people's State Bank of your city warranty deed and abstract to the N.W. 1/4, 32-152-60, along with sight draft for $ 4,200 with exchange, advising them to deduct amount of abstracter's charge for recording the release of mortgage, which is the only item which does not appear on abstract, and otherwise there is nothing against the place whatever.
Inclosed herewith you will also find receipt for $ 200 for first payment on this land. This deed has been in my possession for several days, with instructions from my father to send it on, but I have been very busy and it has been neglected, which I regret.
And on said January 6th such Elkhart bank also wrote the People's State Bank of Lakota as follows:
Gentlemen:--
I am handing you herewith at the request of the Thos. J. Baird Inv. Co., warranty deed to the N.W. 1/4 32-152-60, along with the abstract of title thereto and sight draft for $ 4,200, with exchange.
There is a release of mortgage on record that is not shown on this abstract, the recording of which on this abstract may be deducted from the principal amount, but that is all, as there is nothing else against the place and hasn't been.
Upon the payment of the above amount, less the abstracting charge of that item, kindly turn the deed and abstract over to parties, and make remittance in New York or Chicago Exchange to me.
Thereafter defendant Olson, acting through Baird, procured a loan from defendant Lord for the sum of $ 4,000, giving a mortgage as security on this and another quarter of land and the proceeds of such loan were deposited by the Baird Investment Company in the...
To continue reading
Request your trial