The Rock Springs National Bank v. Luman
| Decision Date | 06 December 1895 |
| Citation | 6 Wyo. 123,42 P. 874 |
| Parties | THE ROCK SPRINGS NATIONAL BANK v. LUMAN |
| Court | Wyoming Supreme Court |
Second rehearing denied February 1, 1896, Reported at: 6 Wyo. 123 at 167.
On rehearing--For former opinion, see 5 Wyo. 159.
ERROR to District Court of Sweetwater County, HON. JESSE KNIGHT Judge.
The facts are sufficiently stated in the case as heretofore reported (5 Wyo. 159), and in the opinions which follow. After the previous decision (Dec. 28, 1894), a rehearing was granted. The case was again argued and submitted.
Judgment affirmed.
E. E Enterline, R. W. Breckons, and A. C. Campbell, for plaintiff in error.
Statements of an agent are inadmissible to affect the principal, unless they are made in respect to a transaction in which the agent is authorized to appear for the principal, and the agent has no authority to bind his principal by statements made by him as to bygone transactions. A pre-existing debt is a valid consideration for the transfer of negotiable paper. (Reed v. Brown, 56 N.W. 661; Swift v Tyson, 16 Pet., 1.) Pfeiffer, in remitting the draft to the bank, acted for himself, and his knowledge did not constitute knowledge of, or notice to, the bank, and it was error to admit evidence as to his declarations made after he had resumed his duties at the bank. (Hummel v. Bank, 37 N.W. 954; Corcoran v. Snow Cattle Co., 23 N.E. 727; Mayor v. Bank, 18 N.E. 618; Tunerarity v. Bank, 1 N.E. 281; Manhattan Brass Co. v. Webster G. & R. Co., 37 Mo. App., 145; State Sav. Asso. v. Nixon, etc., 25 id., 642; Hyde v. Larkin, 35 Mo. 365; Allen v. South Boston Co., 22 N.E. 917; Koehler v. Doge, 47 N.W. 913; Com'l. Bank v. Burgoyne, 110 N.C. 267; Mathis v. Pridham, 20 S.W. 1015; Bank v. Lovitt, 21 S.W. 825; Bank v. Babbidge, 36 N.E. 462; Bank v. Clark, 34 id., 908; In re Bank, 58 N.W. 784; Willard v. Denise, 26 A. 29; Mechem on Agency, 729; Morse on Banks, 125; Bank v. Newell, 71 Wis. 314; Bank v. Davis, 2 Hill, 451; Cragie v. Hadley, 99 N.Y. 131; Bank v. Neass, 5 Denio, 329; Barnes v. Gaslight Co., 27 N.J. Eq. 33; Finley v. Cowles, 61 N.W. 998; Bank v. Thompson, 57 F. 20; Frenkel v. Hudson, 82 Ala. 158; Wicksham v. C. Z. Co., 18 Kan. 481; Reid v. Bank, 70 Ala. 199.) Where a person seeks to establish a trust fund, the identical proceeds must be traced, and the identical property identified (Bank v. Dowd, 2 L. R. A., 480; Burnett v. Gustafson, 54 Iowa 86). The lien of a chattel mortgage does not follow the proceeds into the hands of a third party. (Waters v. Cass Co. Bank, 65 Iowa 234; Smith v. Crawford Co. etc. Bank (Ia.), 61 N.W. 378.) Where a depositor is indebted to a bank, and sends either a draft, check, or money for deposit, the bank has a right to apply the same on his overdraft or on past due paper. (Bank v. Meyer (Ark.), 20 S.W. 406; Bank v. Kendrick, 21 S.W. 1070; Boettcher v. Bank, 24 P. 582; Bank v. Brew. Co., 33 N.E. 1054; Bank v. Gregg, 37 Ill.App. 42; Hayden v. Bank, 29 Ill.App. 458.) The case was tried on a false theory, and the plaintiff in error was prejudiced thereby. The admission of improper testimony, over objection, is reversible error, unless it appears beyond doubt that the rights of the complaining party have not been prejudiced thereby. (Mexia v. Oliver, 13 S. C., 454; 148 U.S. 664; Yankton Co. v. Rosstenstcher, 1 Dak., 125; State v. Nolan, 48 Kan. 723.) Same principle applies to erroneous rejection of testimony. (Craven v. Bennett, 30 P. 61.) One who claims error to be non-prejudicial must affirmatively show it to be so. (McCormick H. M. Co. v. Jacobson, 35 N.W. 627; Wendt v. Ry. Co., 4 S. D., 476; State v. Bank, 2 S. D., 538; Swanson v. Frence (Ia.), 61 N.W. 407.) The admission of improper testimony which tends to sustain plaintiff's theory must be held prejudicial. (Bolds v. Woods, 9 Ind. App., 657; Root v. Borst, 142 N.Y. 62; Peck v. Pierce, 63 Conn. 310; Smith v. Satterlee, 130 N.Y. 677.)
C. C. Hamlin, for defendant in error.
As cashier of plaintiff in error, Pfeiffer was its general business agent in conducting its pecuniary operations and managing its concerns. (Wade on notice 683 b.; Bank v. Bank, 77 U.S. 1020; Bank v. State, 10 Ala. 915; 36 Am. Dec., 189, and cases cited in note.) The declarations of the cashier were admissible . A chattel mortgage vests the legal title in the mortgagee especially after default. (Cone v. Ivinson, 4 Wyo., 203.) The legal title to the proceeds of the sale of the sheep was in Luman, the mortgagee. Pfeiffer held them in a fiduciary capacity (Pomeroy's Eq. Jur., 1047); and the bank merely stands in the place of the original trustee. (Perry on Trusts, 211-828-842; Pomeroy, 1048, 1044.)
A principal can not take the benefits and reject the burdens of the acts of an agent. (Mechem's Agency, 148 and 730; Story's Agency, 445; Morse on Banks, 110; Fishkill v. Bank, 19 Hun, 345; A. Mills v. I. O. Mills, 147 Mass. 274; Holden v. Bank, 72 N.Y. 286; Bank v. Ry. Co., 30 Conn. 270; Pomeroy 909.) The knowledge of an agent within the scope of his authority is the knowledge of the principal. (Mechem's Agency, 718; Wade on Notice, 672; The Distilled Spirits, 11 Wall, 346; Kuhn v. Ins. Co., 34 P. 1069; Le Neve v. Le Neve, 3 Atk., 646; Morse, 109; Cragie v. Hadley, 99 N.Y. 131.) The knowledge of an officer of a bank is the knowledge of the bank. (66 Mass. 375; 76 id., 547; 2 Hill, 461; 96 U.S. 647; 32 F. 762; 36 Conn. 93.)
Not only was the bank bound by the knowledge of Pfeiffer, but it had notice of the rights of Luman through Goble its vice-president. See Wade on Notice, 11. If the ultimate result was reached, then notwithstanding there may have been some error committed in receiving evidence the same is cured. (Kleiman v. Geiselmann, 45 Mo. App., 497; Whitworth v. Ballard, 56 Ind. 279; 20 P. 310.) Error in the admission of evidence is not, in itself, ground for reversal. No case should be reversed, if after excluding that erroneously admitted there is sufficient to sustain the findings, especially where the case is tried by the court without a jury. (Hooker v. Village, etc., 43 N.W. 741; Price v. Brown, 20 N.E. 381; Silvan v. Hansen, 20 P. 136; Fisk v. Reigelman, 43 N.W. 1117; Tex. L. & C. Co. v. Blalock, 13 S.W. 12; Wood and Parlin, 46 N.W. 529; Min. Co. v. Taylor, 100 U.S. 37; Austin v. Ingalls, 20 P. 637; Andrews v. Hayden's Admr's, 11 S.W. 428.) Nor will error in the exclusion of evidence, in itself, be ground for reversal where the evidence, had it been admitted, could not have affected the result. (Lewis v. Simon 10 S.W. 554; Bank v. Spinney, 47 Hun, 293.) The preexisting debt of Pfeiffer to the bank did not constitute such consideration as will divest Luman of his property in the fund. (3 How., 764; 36 Mo. 599; 17 Mo. App., 245; 6 Conn. 521; 30 Md. 392; 79 Pa. 384; 41 id., 251; 114 id., 328; 2 Pars. on Cont., 104; Burnett v. Bank, 38 Mich. 630.) The following were also cited in support of the proposition that the bank was not a bona fide purchaser for value. (29 N.Y. 598; 66 Wis. 401; 57 Iowa 573; 15 Mass. 156.)
This cause was decided at the October, 1894, term of this court and the judgment of the district court of Sweetwater County was reversed. 38 P. 678. (5 Wyo. 159.) A rehearing was granted, and the cause was fully argued thereon. The former decision did not go to the merits of the cause, and it is first necessary to review the former opinion of this court to see whether it can be upheld.
1. It was held in the former decision of this court, that the district court erred in the admission of certain conversations between Luman, the plaintiff below, and one Pfeiffer. The facts are fully stated in the former opinion, but they will be reviewed as a matter of convenience. Pfeiffer had mortgaged certain sheep to Luman as security for the payment of $ 24,100, evidenced by certain promissory notes, of which there was due at the time of the transactions detailed in the evidence, $ 19,100, under the terms of the instrument making the whole debt due at the option of the mortgagee upon failure to pay any installment when due; and there was a note for $ 5,000 and interest from April 9; 1893, due at that time. Under express provisions of our statute the mortgage contained a provision permitting the mortgagor to sell and dispose of the mortgaged sheep or any portion thereof in the due course of business or to preserve and care for the same, and to replace such property sold with other property of like kind and character, which shall be subject to the operation and effect of the mortgage, with a proviso that the proceeds of such sale or sales shall be applied as and toward the payment of the debt secured by the mortgage. The mortgage was filed in the office of the county clerk of Sweetwater County, in which the bank, plaintiff in error, was doing business, on the 18th of April, 1893, one week after it was executed.
The law in force at the time of the filing of the mortgage, and yet in existence, is as follows: ...
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