Farmer v. Wallin

*384 BRADLEY, J. Plaintiff filed his bill in equity against J. P. Wallin and J. P. Aldridge praying for an injunction to enjoin the sale of certain land under a deed of trust. On trial the temporary writ was made perpetual, and defendants appealed. Defendant Aldridge was the sheriff and is not concerned except as acting trustee. The controversy is between plaintiff and defendant Wallin. When using the word defendant hereinafter we have reference to defendant Wallin, who resided at New Windsor, Illinois. In November, 1913, defendant placed $300' with the Citizens Bank of Pomona in Howell county for the purpose of loaning said money. On November 25, 1913, the bank, acting for defendant, loaned the three hundred dollars to plaintiff and his wife, taking their note payable to defendant, and due in five years, with interest at six per cent, payable annually at Citizens Bank of Pomona. The note was secured by a trust deed on plaintiff’s land. Plaintiff paid the interest annually at said bank, and the bank remitted to defendant. On October 18, 1920, plaintiff attempted to pay off this note. The transaction was with the Citizens Bank of Pomona, and the question is: For whom was the bank acting? One Lewis was cashier when the $300 was loaned for plaintiff, but later one A. L. Babb was cashier, and was such during the transactions of importance here. Annually plaintiff paid the interest on this note at the Citizens Bank, and these interest payments were cred *385 ited on the note. Plaintiff owed another note of about $600, mentioned in the record as the Woods note. Babb, it seems, represented plaitniff in borrowing $1000 from a Mrs. Bruner. Plaintiff purposed to pay the Wallin and Woods notes out of the proceeds of the Bruner loan. On September 27, 1920, Babb wrote defendant, as follows: “THE CITIZENS BANK OF POMONA Capital Stock $10,000 Pomona, Mo., Sept. 27, 1920. Mr. J. P. Wallin, New Windsor, 111. Dear Sir: Please "send the J. H. Farmer note and trust deed given to you to us, and the same will be paid, as he wishes to pay this off. Please send all papers connected therewith. Yours very truly, (Signed)- A. L. Babb, Cashier.” In reply defendant caused to be sent the note and trust deed to the Citizens Bank with the following letter: “BANK OF WINDSOR C. C. CRAIG, BANKER. New Windsor, 111. September 30, 1920. The Citizens Bank of Pomona, Pomona, Mo. Gentlemen: We are mailing you note executed by Jas. H. Farmer and Emma Farmer in favor of J. P. Wadin together with trust deed securing said note. Mr. Wallin states that it is by your instruction that he asks to have these papers mailed to you as payment of this note is to be made. When payment of this note is made to you, you may deliver trust deed to Mr. Farmer, and remit proceeds to us for Mr. Wallin. Please collect your charges in this matter from Mr. Farmer as it is to his convenience that these papers are mailed to you. Thanking you for your attention to this matter, we are, Yours truly, (Signed) H. G. Peterson, Cashier.” On October 15, 1920, the cashier of the Bank of New Windsor wrote again as follows: *386 “The Citizens Bank of Pomona,' Pomona, Mo. Gentlemen: On September 30, we mailed you for collection note and mortgage executed by Jas. H. Parmer and Emma Parmer in favor of J. P. Wallin. It was for the convenience of Mr. Parmer that these papers were sent to you as Mr. Wallin understood that same was to be paid at • once. Please advise fate of these papers and if unable to collect please return papers. Thanking your for your attention to this matter, we are, Yours truly, (Signed) H. G. Peterson, Cashier.” Babb returned this letter with pencil notation on bottom as follows: “Party arranging loan. As soon as complete will send money with interest in full. Had a hitch in his loan or would have had his money by this time. (Signed) Citizens Bank, A. L. Babb, Cashier.” The Bruner money being then available, plaintiff on October 18, 1920, paid to the Citizens Bank $921 to take up the Wallin and Woods notes, and received a deposit of $79, the balance of the $1000 from the Bruner loan. The Woods note and the Wallin trust deed were at the time turned over to plaintiff, and the Wallin note was marked “paid,” but Babb retained the Wallin note to satisfy the record. Babb did not remit nor report the collection to Wallin nor to the Bank of New Windsor. He made no record of the collection of the Wallin note. Not having heard from Babb the cashier of the Bank of New Windsor on December 27,1920, wrote as follows: “Bank of Pomona, Pomona, Mo. Gentlemen: Mr. J. P. Wallin called at our bank today and asked us to write in regard to the matter we mailed you some time ago. Mr. Wallin requests that you return all the papers sent you if cannot make the collection. We feel you have done all you can to get this deal through", but Mr. Wallin does not feel that he can let the matter stand as it is, and therefore asks that his papers be returned. Thanking you for your trouble, we are, Yours truly, (Signed) H. G. Peterson, Cashier.” *387 In April, 1921, Babb’s house came down upon him, and he fled the country, and the State Banking Department took charge of the bank. No one could or did find the Wallin note during Babb’s absence. He returned, however, and found the note in the bank. For whom was the Citizens Bank acting? The answer to this question solves the problem here. The learned chancellor below found that the bank was acting for and was the agent of the defendant. The court in its decree found the facts as follows: “The court doth find that on the 25th day of November, 1913, the Citizens Bank of Pomona, Missouri, by and through its then cashier, A. T. Lewis, was agent for defendant J. P. Wallin in loaning the sum of $300' for said defendant to the plaintiff, and on said date plaintiff Jas. H. Farmer and Emma Farmer, his wife, executed their promissory note for the said $300 to defendant Wallin, payable at said Citizens Bank of Pomona, together with their deed of trust to secure its payment upon the following described lands in Howell county, Missouri. (Here follows description.) That plaintiff delivered said note and deed of trust to said bank as agent for defendant Wallin upon execution of same. The court doth further find from the evidence that the plaintiff has fully paid off and discharged said note by payment of same at and to said bank, and that said note was then marked ‘paid,’ and afterwards returned to plaintiff; and that plaintiff is entitled to have said deed of trust can-celled and released of record.” We agree with the court below. We have reached the conclusion that from this record it clearly appears that defendant by his acts constituted the Citizens Bank, represented by Babb as its cashier, as his agent. Babb, as cashier, had no doubt in the past been acting as defendant’s agent in collecting the interest. Plaintiff did not direct Babb to write defendant to send the note and trust deed to the Citizens Bank. Babb knew, of course, for what purpose plaintiff was securing the Bruner loan. *388 When that money was about available Babb of his own accord, so far as appears, wrote defendant to send the note and trust deed. Such was the import of the letter of September 27, 1920'. In the reply to the letter of September 27th the cashier of the Bank of New Windsor, acting for defendant, advised the Citizens Bank to receive payment and “deliver trust deed to Mr. Parmer and remit proceeds to us for Mr. Wallin.” In this letter the cashier requested that the Citizens Bank collect its charges from Parmer because the papers were mailed for Parmer’s convenience. Defendant lays some stress on this fact, contending that the Citizens Bank, acting through Babb, was plaintiff’s agent. Also some importance is sought to be given to the fact that the note was not ordered to be delivered. We do not think that these two facts or circumstances are of much significance. The note and trust were sent to Babb as the cashier. Defendant, ignorant of Babb’s defalcations, was using the Citizens Bank of Pomona as an agency to collect his note. If the bank or Babb, as cashier, had authority to collect and did collect the Wallin note, then, of course, both the note and trust deed should have been delivered on payment of the note. There is no dispute that the trust deed was delivered and the note marked “paid.” Plaintiff gives a reasonable explanation as to why the note was not delivered. There is no significance in the fact that defendant wanted plaintiff to pay the charges, especially in view of the other facts and circumstances. Also it will be noted that the Citizens. Bank was not told that it would have to look to plaintiff for its charges. A request was merely made to collect the charges from plaintiff. Such is not unusual. The letters on October 15th and December 27th strengthen rather than weaken the contention that the Citizens Bank of Pomona, through Babb, was acting for defendant. Defendant makes the point that there is no evidence that plaintiff paid the amount of the note to Babb, as *389 cashier. There is evidence that plaintiff got a $1000 loan from Mrs. Bruner; that when the amount of the Woods note and defendant’s note was deducted there was a balance of $79, for Avhich plaintiff received a deposit. It was not shown, it is true, that plaintiff received a deposit entry for the $1000, and that he checked on it to pay the two notes. The transaction might, and perhaps should, have been shown by the bank records, and perhaps would have been had not Babb been at that time engaged in an effort to cover up his tracks. There were bits of evidence here and there when disconnected which lend support to defendant’s case, but irom the whole record we are convinced that defendant by his acts made the Citizens Bank of Pomona his agent for the collection of the note. It seems clear under the record here that on the theory of agency alone defendant could sue and recover from the bank the proceeds of this note. The bank Avas wrecked by Babb, and as between the two innocent persons, plaintiff and defendant, the evidence tends more strongly to support plaintiff’s case than that of defendant. The trial court found for plaintiff and while we are not bound in an equity case by the trial court’s finding of facts, yet we do give due deference thereto. Defendant cites Fair v. Bowen et al. (Mich.), 86 N. W. 991, as sustaining his contention that under the facts the bank was the. agent of plaintiff. The Farr Case is similar in some respects to the case at bar. There is, however, a vital distinction in the evidence relative to the question of agency. In that case John D. Bowen executed a mortgage on certain land to Fair, and then conveyed to Arthur D. Bowen. One Hale, at the special instance of the Bowens, wrote Fair’s agent to procure from Fair a release on eighty acres, and that he, Hale, could collect $400 and the interest on the $400 as Bowen had a chance to sell the eighty acres. After some correspondence Fair sent the release to Hale, who collected $500 and interest and delivered the release, *390 but embezzled the money. It further appears that after the Bowens knew that Hale had not remitted, and after receiving letters from Fair, .they continued to pay interest upon the full amount, and concealed Hale’s embezzlement, and that this was at the request of Hale, “who urged that if complainants were notified of the situation they would make him trouble.” We do not re.gard the F'air Case as an authority in support of defendant’s contention. Defendant says that McMullins v. Peoples Savings & Loan Ass’n (Minn.) 58 N. W. 820, is in point and supports his contention. The facts of that case distinguish it from the one at bar. Unquestionably the conclusion there reached was correct, but the facts are quite dissimilar to those here. We are of the opinion that the judgment below should be affirmed and it is so ordered. Cox, P. J., and Farrington, J., concur.