Stockhausen v. Johnson
| Decision Date | 12 January 1916 |
| Citation | 155 N.W. 823,173 Iowa 413 |
| Parties | C. GEORGE STOCKHAUSEN, Appellee, v. ANDREW JOHNSON, Appellant |
| Court | Iowa Supreme Court |
Appeal from Webster District Court.--C. G. LEE, Judge.
THIS is an action at law upon a promissory note. At the close of all the testimony, there was a directed verdict for the plaintiff. The defendant appeals.
Affirmed.
Robert Healy, for appellant.
M. M Joyce and Kenyon, Kelleher, O'Connor & Price, for appellee.
Plaintiff 's action grows out of a certain loan made by the plaintiff in 1904 to the firm of Johnson & Waterbury, livestock dealers, and renewals of the loan by Waterbury in the name of the firm, but at a time when, as the defendant alleges, the firm had been dissolved. There was an attempted dissolution as between the partners after the execution of the note for the loan in question, but no notice of dissolution was given, and the plaintiff had no knowledge thereof. The firm consisted of the defendant, Johnson, and C. D. Waterbury. Plaintiff had sent considerable sums of money to C. D. Waterbury for investment in Iowa, and an important question in the case was whether the relations of plaintiff and Waterbury were those of principal and agent. But, as stated, the loan in question, for which the note sued upon was given, was made by the firm to the plaintiff, and the money was used in the firm. The defendant claims that an agency existed, by virtue of which Waterbury had authority to accept land and personalty in payment of the firm indebtedness to the plaintiff and to release the defendant from all liability to the plaintiff; also, that such an emergency presented itself to the agent Waterbury of the defendant's insolvency that the acts of the agent in accepting land and personalty were binding on the plaintiff. Plaintiff admits that C. D. Waterbury was his agent in a sense and so far as making loans and reinvesting were concerned, but contends that Waterbury's agency did not, either expressly or impliedly, authorize Waterbury to accept payment of the indebtedness in lands or personalty and thus bind him. As stated, the trial court directed a verdict for the plaintiff, and defendant contends that this action was erroneous, and that there was sufficient evidence to warrant a finding of such an agency as is contended for by defendant.
The original petition alleged that in January, 1911, a promissory note was made and executed by C. D. Waterbury in the name of Johnson & Waterbury; that, at the time said note was executed, there existed a partnership between the last named parties. The petition, as amended, alleged that, in January, 1904, the defendant was a member of the firm of Johnson & Waterbury; that at that time, the plaintiff loaned the said firm $ 1,500, and that the individual members thereof made and executed their promissory note to the plaintiff for said sum, which note matured in January, 1907; that in January, 1907, the note was renewed by a note payable in two years, which note was signed by C. D. Waterbury as follows: "Johnson & Waterbury, By C. D. Waterbury"; that the note was again renewed in 1909 for a year, in 1910 for another year, and again renewed in 1911 for a year. The defenses set up by the defendant raised issues of payment, agency, estoppel, statute of limitations and surety; but the grounds relied upon for reversal are that the court erred in directing a verdict, because, as defendant claims, there was sufficient evidence to submit the case to the jury on the theory that C. D. Waterbury was the plaintiff's agent, with authority to receive payment in property, and that defendant did so pay said Waterbury.
There is no claim that plaintiff was ever paid anything on the note or debt by any person. Defendant became insolvent a short time after the loan was made. C. D. Waterbury died in 1912, and at that time he was insolvent. There is no controversy in the evidence in the case. Plaintiff resided at all times in Philadelphia. C. D. Waterbury was cashier of the First National Bank of Dayton, Iowa. The defendant was a farmer in the vicinity of Dayton and engaged in the stock business. In 1902, Waterbury and defendant engaged in the partnership business of buying, feeding and selling stock under the firm name of Johnson & Waterbury. Prior to 1903, a cousin of C. D. Waterbury, one C. A. Waterbury, had visited Iowa and knew of the general condition here. C. A. was a brother-in-law of plaintiff. He had informed plaintiff that Iowa was a good place in which to invest money, and that C. D. Waterbury was in the banking business and could use some of plaintiff's spare money. Plaintiff sent to C. D. Waterbury different sums of money prior to 1903, at the request of C. D. Waterbury and for the purpose of supplying customers of C. D. Waterbury, who collected the interest and principal on these loans and accounted to plaintiff therefor. Some time in 1903, C. A. Waterbury told plaintiff of the partnership of Johnson & Waterbury; that the business was successful; and that Johnson was an extensive farmer. In December, 1903, plaintiff wrote C. D. Waterbury that C. A. Waterbury had advised him of the partnership of Johnson & Waterbury, and that the firm needed funds to carry on the business, and offered to loan the partnership money. A few days thereafter, in reply to this communication, C. D. Waterbury wrote a letter to plaintiff that he could place from $ 1,000 to $ 3,000 at 7 per cent. elsewhere, or that the firm could use the money. Thereafter, plaintiff sent $ 1,500 to Waterbury to be used in the firm, and with the expectation of loaning it to the firm. It is shown, without dispute, that this money was used by the firm in the firm business. It is admitted by the defendant, and also admitted in a deed executed June 27, 1904, by the defendant and his wife to C. D. Waterbury. This deed conveys certain real estate to Waterbury, and the deed recites that Waterbury assumes a mortgage on the property and certain other indebtedness, including the original note given to plaintiff. In February, 1912, C. D. Waterbury became ill, from which illness he died in July, 1912. He at that time (February, 1912) owed C. A. Waterbury a personal loan, and also a personal loan to the plaintiff. Thereafter, C. A. Waterbury came to Dayton, with power of attorney from plaintiff to collect these claims and the note in litigation in this case. At that time, he made a personal demand on two different occasions on the defendant for the payment of this note. Eight days after this, defendant went to Waterbury's house, where they had a further talk with reference to the partnership of Johnson & Waterbury, concerning the unfinished business of the partnership, at which time the defendant, with knowledge that the note to plaintiff had not been paid, with knowledge that demand had been made upon him for the payment of the note, with knowledge of the fact that C. D. Waterbury had not paid the note to plaintiff as he agreed to do in the deed before referred to, signed and executed, as did also C. D. Waterbury, the following paper:
At the same time, defendant executed two promissory notes to Waterbury. It appears from the evidence, without dispute, that in 1904, defendant became financially involved. At that time, the partnership owed certain promissory notes and other indebtedness. Plaintiff never heard of any dissolution of the firm of Johnson & Waterbury from the time he first heard of the firm until the year 1912, nor did he have any knowledge or information as to any change in the financial condition of the firm. He did not know until 1912 about the execution of the deed before referred to. As before stated, there was never any publication of notice of dissolution of the firm. Defendant admits that he never sent plaintiff any notice of his business relations with Waterbury. After the so-called dissolution of the firm in 1904, C. D. Waterbury, in order to keep his various businesses separate, continued to use the firm name in the transaction of the business and used the firm name in his own personal accounts, and continued the bank account in the bank of which he was cashier, in the name of Johnson & Waterbury. October 7, 1909, a notice was published in a Dayton paper of a public sale under the firm name of Johnson & Waterbury. It is claimed by defendant that C. A. Waterbury and others knew of the so-called dissolution prior to 1907. But C. A. Waterbury was not the agent of plaintiff until he appeared upon the scene with a power of attorney in 1912, and then for the purpose of collecting these claims. Some of the merchants in Dayton with whom the firm of Johnson & Waterbury transacted business did not learn of the dissolution until 1907. We have set out the statement of facts somewhat in detail, and therefrom it is apparent that defendant is liable in this case unless C. D. Waterbury was acting as the agent of plaintiff at the time he accepted from defendant the consideration for the deed, and had authority to bind plaintiff in that respect.
The evidence relied upon by the appellant to show the authority of C. D. Waterbury to act as plaintiff's agent is that of the plaintiff himself, to a large extent, together with some of the other...
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