Farmers Savings Bank v. Planters Terminal Elevator Co.

Albert, J. The Planters Terminal Elevator Company was a corporation.organized under the Iowa law. It had a contract with the defendant Parrott to sell its stock at a fixed fee. One Burdette was engaged in selling the stock of the company, and sold to one E. Paul. Jenks $10,000 worth of said stock, for which Jenks made his *436 two “myself” notes for $7,000 and $3,000, respectively. It is the latter note Avhich is involved in this controversy. Burdette was selling this line of stock Avith some other lines of stock in Clarke County about the time in controversy, and Avas staying at a hotel in Osceola in Clarke County, Avhich is the same county in Avhich the toAA'n of Murray is located', and AAdiich is the home county of the plaintiff bank. When this suit Avas instituted, the defendants filed a motion and affidaAÚt to transfer to Polk County, which is the residence of both of the defendants. Counter affidavits AA^ere filed, and the matter Ayas heard by the court and determined adversely to the defendants. This ruling is the first error assigned. Section 3500 of the Code of 1897 reads as follows: “When a corporation, company or individual has an office or agency in any county for the transaction of business, any actions growing out of or connected AA'ith the business of that office or agency may be brought in the county Avhere such office or agency is located. ’ It is claimed under this section that the defendants had no office or agency in Clarke County, and that an action on the purchase of this note did not groAV out of or Avas not connected with the business of, such office or agency. That the buying of this note by the plaintiff' bank from Burdette occurred in Clarke County, is undisputed. It is equally true that there is. no dispute over the proposition that the defendants were both residents of Polk County at all times involved herein. While someAvhat. hazy, the affidavits tend to show that, at and about the .time plaintiff bank bought this note from Burdette, Burdette Avas staying at a hotel in Osceola, and'was engaged in selling stock in. the defendant elevator company. The first question, therefore, is whether or not, under the ab„ove quoted section of the statute, there Avas an office or agency of the defendant in Clarke County; and secondly, if so, whether or not this transaction Avith the bank grew out of or Ayas connected Avith the business of that office or agency. Under the holdings of this court heretofore made, that such office or agency existed is not Avithin the field of dispute. Burke v. Dunlap, 185 Iowa 949; Milligan v. Davis, 49 Iowa 126; Wickens v. Goldstone, *437 97 Iowa 646; Wood v. Rice & Fogarty, 118 Iowa 104; Mitchell v. Lang & Co. (Iowa), 112 N. W. 87 (not officially reported); Gilbert v. McCullough, 140 Iowa 362. The affidavits herein filed by the defendants in general terms deny that defendants maintained an office or agency in Clarke County; whereas, the plaintiff’s counter affidavits show that Burdette was an agent of the Planters Terminal Elevator Company and Parrott in the sale of this stock, and was authorized to take notes therefor and to sell said notes. The allegations in these affidavits filed on behalf of the plaintiff are nowhere denied by the defendants in the showing made by them. If Ihese matters so alleged are true, then it is equally undisputablo that the sale of this note to the plaintiff’ bank grew out of and was connected with the business and office or agency of defendants in Clarke County. We are compelled to hold that, at this stage of the proceedings, under the showing made to the court, there was no error in refusing to transfer the ease to Polk County. The plaintiff brings this action against the defendants for damages, alleging fraiid and deceit on the part of Burdette, who, it alleges, was the defendants’ agent in this transaction with the bank. It claims further that the said note proved to be worthless, and asks judgment against the defendants for $3,754, with 6 per cent interest thereon from the 21st day of July, 1922. The plaintiff alleges that the promissory note in evidence here was procured in the first instance from the maker, on November 19, 1919, through false and fraudulent representations, stated in ten different grounds in the petition, and further says that the note was without consideration, and, being payable to the maker, that the indorsement of. his name on the back of the note was forgery; that, therefore, said note Avas Avorthless. The plaintiff alleges that fraud was committed by said agent in the sale of the promissory note to plaintiff, in the following grounds: That Burdette represented to'the plaintiff (a) that said note Avas given and obtained by the Planters Terminal EleArator Company in a legitimate transaction; (b) that the signature of said note and the signature indorsed thereon Avere valid; (c) that there was no defense to said note. Defendants’ answer is a general denial. The issue thus made Avas tried to a jury, *438 with the result above indicated. In the progress of the trial, several witnesses were permitted to testify as to what Burdette said about whom he was selling the note for, and what the extent of his authority was; also, defendant Parrott’s statement of Burdette’s relation with the defendant company and Parrott’s relation to the defendant company. The admission of this testimony-is assigned as error. In the first place, it is not available because no objection was made to.any of this testimony; but, it being assumed that it was objected to, the argument raises the question that it was not admissible because there is no showing in the record that Burdette was the agent of the defendant. Counsel are mistaken in respect to this situation, because Downs, who was vice president of the plaintiff bank at the time, testifies that he discussed the matter of buying this note w'ith Oxford, one of the officers of the Murray bank, before it was bought; and that he called Parrott over the telephone, told him that they were contemplating the purchase of said note, and asked if it was all right to buy the note from Burdette and make’settlement; and that Parrott answered that it was. He described to Parrott the identical note in controversy, and Parrott told him that Burdette was the agent of Parrott and the Planters Terminal Elevator Company, and that he cai’ried a letter to that effect. He told Parrott the amount of the note and what Burdette said it was given for, and Parrott said that it wras all satisfactory. Most of the errors about which complaint is made, turn around this claim on the part of the defendants, that there was no showing that Burdette was the agent of the defendants. As said, the above testimony from Downs is the connecting link, and tends to show this agency. Whether it was true or not was a question for the jury. It is too well settled to require authority that the agency of Burdette for the defendants could not be proved by witnesses who testify to declarations of such agency made by Burdette; but this rule has no application here by reason of the matters above referred to. The defendants, at the close of the testimony of plaintiff, moved for a directed verdict. Matters contained in the motion, without being specifically pointed out, will be disposed of in the course of this opinion. *439 The defendants complain of Instruction 5, which is too lengthy to set out herein, but which sums up the things which the plaintiff must prove in order to establish a casé. The objection to it is that it does not require plaintiff to establish the agency of Burdette, in order to bind the defendants. This attack on the instruction is unwarranted, because one of the requirements of the instruction is that the plaintiff prove that the defendants, “by their duly authorized agent,” falsely or fraudulently stated and represented to the plaintiff that said note was obtained, etc. This covers the objection made by the defendants. Defendants’ objections to Instructions 6, 9, and 11 have already been covered by what is heretofore said. Objection is made to Instruction 9y2 of the charge of the court, because it submits issues to the jury which are not in the case. The latter division of No. 9y2 says to the jury, in substance, that, if the defendants received and x'etained proceeds of the sale of the note knowing that it was received from the sale of said note, then the defendants would be estopped to deny that said Burdette had authority to sell or negotiate said note, and his acts in relation to said sale- would be as binding upon said defendants as though he had been given express authority to negotiate the sale of said note. It is urged first that this instruction submits an issue to the jury that was not pleaded in the case. While it is true that the pleadings do not raise such an issue, yet issue was raised" and met by both sides in the trial of the case; hence the issue was a voluntary one, met by the evidence, and therefore was properly instructed upon. Secondly, it is urged that the instruction is erroneous in that the company never received any of the proceeds from the sale of said note. It is an issue in the evidence whether or not Burdette was the agent of the company, which was for the jury to determine. If he was, then receipt of the proceeds of the note by him would be a receipt by the company. There was evidence on this question, and it was for the jury to determine. *440 Lastly, it is urged that, even though the company may have received the benefits of this transaction, it was received without knowledge. It is admitted in the record that Parrott ivas the fiscal agent of the company, in charge of the sale of the stock and the settlements therefor. Downs testifies that, before lie authorized the cashier of plaintiff bank to purchase, said note, he called Parrott over the telephone, giving him a description of the .note; and that he was advised by'Parrott that Burdette had authority to sell said note, and in substance was told that it would be all right for the bank to buy the note, Downs having given him a full description of the note and the signer thereof.Parrott thus being agent of the company, what he did and said was at least apparently within the scope of his authority; and knowledge on his part would be knowledge on the part of the company. The defendants object to Instruction 13, which reads as follows: “If you find the plaintiff entitled to recover in this action against either one or both of the defendants, then the amount of recovery you should allow against each defendant or defendants as you find a verdict against, should be the amount of money you find said plaintiff paid for the note in controversy, together with 6 per cent interest per annum from the 21st day of November, 1919, to this date.” It is insisted that this instruction does not state the proper measure of damages. To understand the force of this objection, it will be necessary to state some additional facts from the reeord. The undisputed testimony is that the plaintiff, before the bringing of this action, sued Jenks on this note. Jenks made defense, and succeeded in defeating plaintiff’s recovery thereon. It therefore follows that, as against the maker of this note, plaintiff bank can realize nothing. Under the evidence as it stood before the jury, they could reach no other conclusion than that it was worthless. While it is the general rule, in actions of this kind, that the measure of damages is the difference between what the *441 property was actually worth and wbat it would have been worth had it been as represented, yet, as applied to the facts in this case, had that measure of damages been given to the jury in place of the one that was given, the jury could have reached no other verdict than the one it did. Therefore, the giving of this instruction was error without prejudice. This disposes of all material questions raised in the case,, and we are unable to find auy prejudicial error to the defend ants. — Affirmed. Favidle, C. J., and Evans and Arthur, JJ., concur.