Travelers' Insurance v. Jones

Mr. Justice Hayt delivered the opinion of the court. Three objections are urged in this court against the decree of the district court. These objections will be considered in the order presented by the counsel: 1. Insufficiency of the evidence to support the finding [520] that the Loan & Trust Company in making the loan was the agent of the Travelers’ Insurance Company. The trial below was had to the court without a jury. That court having had the advantage of observing the witnesses upon the stand, by a familiar rule this court is precluded from examining the evidence merely for the purpose of substituting its judgment upon its weight for the conclusion of the trial court. A resort to the rule is not necessary. however, in this case. Th'e evidence points so strongly to the agency of the Loan & Trust Company, as found by the district court, as to leave no room for an opposite conclusion. It is shown that the principal business of the Loan & Trust Company was to negotiate loans for eastern parties. It was its habit, upon receiving an application for a loan, to forward the same to some one of its correspondents in the east for approval and acceptance. The Travelers’ Insurance Company was one of such correspondents, in fact it may be said that it was the one with which the Loan & Trust Company principally transacted such business. In pursuance of this custom, when the application of Jones was received it was forwarded to the Travelers’ Insurance Company for its approval. The abstract of title at this time had not been prepared. Appellant approved the Jones loan and forwarded the amount ($10,000) to its correspondent in New York and had it placed to the credit of the Colorado Company. If Jones’ title to the land given as security had been perfect, the loan would, without doubt, have been consummated and the money paid without delay, but it was found that his title was not good, and for this reason the money vras withheld by the Loan Company. A pertinent inquiry in this connection is, For whose benefit and protection was the payment of this money refused? There can be but one answer to this question under the evidence: It was withheld for the protection of the Insurance Company. And certainly in so doing the Colorado [521] Company was still acting as the agent of the Insurance Company. Had it been acting as the agent of Jones it would have paid the money to him, or if it had refused, payment could have been compelled by Jones. It certainly cannot be claimed, in view of the failure of the title, that Jones could have compelled the payment of this money to him. This strongly tends to show that the Colorado .Company was at that time not acting as the agent of Jones. It is claimed by appellant, and numerous authorities are cited in support of the claim, that the Colorado Company acted as broker in the transaction, and, as Jones first employed it to procure the'money for him, that in law it must be considered as his agent for the entire transaction so far as any agency resulted therefrom. It is a sufficient answer to this contention to say that the Colorado Company was the agent of the Travelers’ Insurance Company for the purpose of making loans long prior to the time of the Jones application. It was not only negotiating loans for the Travelers’ Insurance Company, but it was collecting interest upon such loans, as the same fell due from time to time, and forwarding the same to the company’s principal office, at Hartford, Conn. It was doing this at the request of the Insurance Company and as its agent. It is further shown by the testimony of Barrows, an employee of the Insurance Company, and its witness, that the Colorado Company was authorized to, and did, collect interest upon this very claim; and that it was some time after trouble had arisen between the Insurance Company and the Colorado Company before the former revoked the agency of the latter. It then expressly notified its borrowers, including appellee, that the Colorado Company was no longer authorized to collect the interest, and issued a general circular to this effect. If, as now claimed, the Colorado Company was not authorized to collect the interest and had not been in the habit of so doing, why was such, a circular necessary or proper? It is in evidence that Jones, entertaining the belief that Lothrop, upon reflection, would release his' claim, requested [522] the Colorado Company to hold the money. It is claimed that Jones by this made the Loan Company his agent, and consequently can only look to it for redress. Jones only made this request, however, after payment to him had been refused. He did it at a time when the Colorado Company held the money as the agent of the Insurance Company and would not pay the money although he stood ready to receive it. In this extremity, he asked that, instead of returning it, it should be retained, in order that he might yet secure it, should he be able to present a satisfactory title. Eventually he succeeded so far as the title was concerned. Still the money was withheld. In this state of the record we see no reason for interfering with the finding of the trial court upon the question of the agency. The remaining objections have been argued together by counsel. They are two in number: 1. A variance is claimed between the case made upon the trial and the case stated in the complaint. 2. It is urged that the case made is not one cognizable in equity. The only variance between the proof and the complaint arises out of the payment by Jones of the money which he had received. This occurred at the trial, and it was neither necessary nor proper to anticipate it in the pleading. Appellee having paid and appellant having accepted all the money that he had received upon his note, together with all the interest due upon the same, the Insurance Company was placed in the position of holding a‘" note secured by a deed of trust for a claim that had been fully satisfied. The principal contention below was upon the liability of appellee for the money advanced by the Insurance Company to the Loan & Trust Company which he had never received. It appearing that the Colorado Company was the agent for the Travelers’ Insurance Company in receiving this money, and no fraud being shown on the part of Jones, he [523] was in no way responsible for the money withheld by the Colorado Company; and his liability having been fully discharged, he was entitled to have his notes canceled and the cloud of the trust-deed removed from his title. The jurisdiction of courts' of equity in such cases is too firmly established to be now made the subject of controversy. Finding no error in the record, the judgment of the district court is affirmed. Affirmed. Me. Justice Elliott, having presided at the trial below, did not participate in this decision.