Whalen v. Vallier

• Citation: 266 P. 1089,46 Idaho 181
• Decision Date: 28 April 1928
• Docket Number: 4845
• Parties: M. D. WHALEN, Respondent, v. E. E. VALLIER and ELIZABETH VALLIER, Husband and Wife, Appellants
• Court: Idaho Supreme Court

266 P. 1089

46 Idaho 181

M. D. WHALEN, Respondent, v. E. E. VALLIER and ELIZABETH VALLIER, Husband and Wife, Appellants

No. 4845

Supreme Court of Idaho

April 28, 1928

PRINCIPAL AND AGENT-AUTHORITY OF AGENT-RECEIVING PAYMENT-EVIDENCE-BURDEN OF PROOF.

1. In action to foreclose mortgage, in which mortgagors sought credit for part payment, admission of testimony of agreement between mortgagors and agent for giving of the mortgage sued on, offered to show that agent to whom payment was made was agent of mortgagors, if error, held not prejudicial, where evidence showed arrangements discussed were fully carried out.

2. In suit for foreclosure of mortgage, in which mortgagors sought credit for payment of principal made to agent, who failed to account to mortgagee, evidence of agent's receipt from third person of principal of another mortgage given plaintiff five months after defendants' payment on principal held inadmissible to show general agency to receive payments of principal as well as interest.

3. Evidence of third person's payment to agent of another mortgage executed after mortgagors' payment to him of part of principal of mortgage sued on held inadmissible to prove estoppel of mortgagee to deny general agency of person to whom payment was made to receive instalments of principal as well as interest, since mortgagors could have had no knowledge concerning subsequent transaction and could not have been misled.

4. Finding that mortgagee made no representations as to agency of person selected to collect interest on mortgage held conclusive on appeal, where finding was based on conflicting testimony.

5. Where there is any doubt on which side evidence preponderates, party having burden of proof fails on that issue.

6. In foreclosure suit in which mortgagors claimed part payment of principal to person authorized to collect interest, burden of proof was on mortgagors to show that such person had express implied or ostensible authority to accept payment of principal, or that mortgagee had so acted as to estop himself from denying agent's authority.

7. Person affirming existence of agency has burden of proving it, and also has burden to prove extent of agency, and that authority remained unrevoked at time of payment to alleged agent.

8. Fact that note and mortgage were not in hands of mortgagee's agent when agent collected principal, though not conclusive on question of agent's authority, was matter of evidence to be considered in determining whether payment was in legal effect made to mortgagee.

9. Agent's collection of interest on mortgage does not warrant finding of agency to collect principal or any part thereof before due, and any inference of agency is rebutted by mortgagee's retention of note and mortgage.

10. Provision in note that it should be paid at office of third party was for convenience of payors, and did not make third party agent of the holder of the note to collect it.

11. Agent's possession of paper in advance of due date unless it is delivered to him for purpose of receiving payment, does not permit discharge of debt by payment to him in absence of clear proof of his express authority.

12. Mortgagee's delivery of old mortgage to third party to be delivered to persons liable held not to constitute such third party mortgagee's agent for purpose of receiving partial payment of principal of new note and mortgage, especially where new note provided for payment of entire amount of principal on or before three years after date.

13. In action for foreclosure of mortgage, in which mortgagors sought credit for part payment of principal made to person authorized by mortgagee to collect interest authority of such person to receive collection of principal in mortgagee's behalf was not shown by mortgagee's statement, "I don't want any more of my business to go through their office."

14. In action to foreclose mortgage in which mortgagors sought credit for part payment of principal made to person authorized by mortgagee to receive interest payments mortgagors failed to sustain burden of proving agency or estoppel, where mortgagee retained possession of the mortgage, and the part payment on principal was made before due date, note not having provided for payment in instalments.

APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Clinton H. Hartson, Judge.

Action to foreclose mortgage on real estate. Judgment for plaintiff. Affirmed.

Judgment affirmed. Costs awarded to respondent.

Charles P. McCarthy, for Appellants.

Where the question of the authority of an agent is in issue, all evidence which tends in any way to show such authority is admissible. (Keene v. Pittsburg Lead Mining Co., 17 Idaho 179, 105 P. 60.)

Authority need not be expressed in writing or established by direct evidence. It may be established by circumstances showing its existence. (Bautz v. Adams, 131 Wis. 152, 120 Am. St. 1030, 111 N.W. 69; First National etc. Bank v. Hessell, 133 Wash. 643, 234 P. 662.)

Possession or want of possession of the note is not controlling on the issue of authority to collect. The authority to make collection is dependent upon all of the surrounding circumstances and the acts and statements of the parties and not alone upon the possession of the note by the alleged agent. (Union Trust Co. v. McKeon, 76 Conn. 508, 57 A. 109; Security Co. v. Richardson, 33 F. 16; Campbell v. Gowans, 35 Utah 268, 19 Ann. Cas. 660, 100 P. 397, 23 L. R. A., N. S., 414; Wolford v. Young, 105 Iowa 512, 75 N.W. 349; Harrison Bank v. Austin, 65 Neb. 632, 101 Am. St. 639, 91 N.W. 540, 59 L. R. A. 294; Quinn v. Dresbach, 75 Cal. 159, 7 Am. St. 138, 16 P. 762; Union Stock Yards Nat. Bank v. Haskell, 2 Neb. (Unof.) 839, 90 N.W. 233.)

Payment to an agent is binding on the principal if the agent has been represented by the principal as having authority to receive payment. (Kissinger v. Quirin, 200 N.Y.S. 599; Wolford v. Young, supra; Plummer v. Knight, 156 Mo.App. 321, 137 S.W. 1019; Grant v. Humerick, 123 Iowa 571, 94 N.W. 510; Harrison Bank v. Austin, supra; Johnston v. Milwaukee & W. Inv. Co., 46 Neb. 480, 64 N.W. 1100; Union Trust Co. v. McKeon, supra; Campbell v. Gowans, supra; Quinn v. Dresbach, supra; 2 C. J. 625, sec. 262, notes 99 and 1.)

Payment to an agent is binding on the principal if the maker was justified in believing that the agent had authority to receive payment from his knowledge of what the payee had permitted his agent to do, of statements made to the maker by the payee and of the general conduct of the business. (See authorities cited above.)

Even if payment of part of the principal before the due date be not expressly permitted by the terms of the note, the payee can accept such payment. Likewise his general agent represented by him to have authority to transact his business has power to accept such payment. (Verdine v. Olney, 77 Mich. 310, 43 N.W. 975; McIntosh v. Ransom, 106 Ill.App. 172; Harrison v. Legore, 109 Iowa 618, 80 N.W. 670; Weigell v. Gregg, 161 Wis. 413, 154 N.W. 645, L. R. A. 1916B, 856, Thornhill v. Masucci, 202 Mo.App. 357, 216 S.W. 819.)

Delana & Delana, for Respondent.

Where the debtor makes payment of a debt to a third person and claims such third person to be the agent of the payee, the burden of proof as to such agency rests upon the person claiming it, and must be established by clear and conclusive evidence. This is so elementary that it will probably not be questioned, and citation of authorities would be superfluous.

The law makes no presumption of agency, and the fact of its existence as well as its extent must be established by the party alleging it by a preponderance of the evidence. (Mechem on Agency, sec. 255; Bourland v. Mosier, 98 Okla. 262, 225 P. 348; Waken v. Davis, 112 Okla. 23, 239 P. 659.)

The burden of proving payment rests upon the one asserting it, and must be proven by a preponderance of the evidence. (8 C. J., p. 1011, sec. 1317, and cases cited thereunder; 30 Cyc., p. 1264, and cases cited thereunder; 2 R. C. L., p. 119, sec. 131, and cases cited thereunder.)

Where payment is made to a third party, the burden rests upon the payer to prove that such third party was authorized to receive payment, and by clear and conclusive proof. (30 Cyc., p. 1265, and note 30; 2 C. J., p. 923, sec. 662, note 13, p. 926, sec. 668, note 37.)

Where payment is made to a third party not having possession of the evidences of debt, the proof of such agency must be clear and specific in order to bind the principal. (Connell v. Kaukauna Gas Co., 164 Wis. 471, Ann. Cas. 1918A, 247, 159 N.W. 927, 160 N.W. 1035; Bartel v. Brown, 104 Wis. 493, 80 N.W. 801.)

Even where a third party is agent for the payee for the collection of interest, the payee's retention at all times of the note and mortgage rebuts any inference of agency generally in regard to the transaction. (Weisner v. Kosiedowski, 182 Wis. 521, 193 N.W. 374, 197 N.W. 208.)

Making a note and mortgage payable at a place office or bank does not make such party the agent of the payee without the possession of the note or mortgage. (1 Daniels on Negotiable Instruments, sec. 326; 2 C. J., p. 622, sec. 258; Ward v. Smith, 74 U.S. 447, 19 L.Ed. 207; Klindt v. Higgins, 95 Iowa 529, 64 N.W. 414; Ritter v. Plumb, 203 Iowa 1001, 213 N.W. 571; Huisman v. Althoff, 202 Iowa 70, 209 N.W. 525; Bromley v. Lathrop, 105 Mich. 492, 63 N.W. 510; Chesaning State Bank v. Branton, 234 Mich. 263, 207 N.W. 826; Trowbridge v. Ross, 105 Mich. 598, 63 N.W. 534; Hoffmaster v. Black, 78 Ohio 1, 125 Am. St. 679, 14 Ann. Cas. 877, 84 N.E. 423; Stansbury v. Embree, 128 Tenn. 103, 158 S.W. 991, 47 L. R. A., N. S., 980; Dwight v. Lenz, 75 Minn. 78, 77 N.W. 546; Kurcher v. Scott, 96 Wash. 317, 165 P. 82; Cheney v. Libby, ...