Bates v. American Mortgage Co.

The opinion of the court was delivered by Mr. Justice McGowan, The facts of this case are correctly stated in the argument of the appellants, as follows: “The action was commenced August 5, 1890, by the plaintiff, a married woman, against the defendant, a foreign corporation, with its place of business in Scotland, to perpetually enjoin the sale of her lands under power contained in a mortgage executed by her on April 25, 1885, to secure a loan from the defendaut of $1,000, upon the ground that the mortgage and note thus executed by her alone were intended merely as security for a debt of her husband, and was, therefore, null and void. An injunction was granted pending the litigation. The cause was referred to take the testimony, all of which is printed in the brief; and came on to be heard upon the pleadings and testimony so taken, before his honor, Judge Izlar, at the March term (1891) for Barnwell County, who granted the relief prayed for, and ordered the note and’ mortgage to be delivered up to be cancelled, as follows: ‘Ordered, adjudged, and decreed, that the note and mortgage executed by the plaintiff to the defendant corporation, and bearing date April 25, 1885, be, and the same is hereby, set aside as null and void, and that the same be delivered up to the plaintiff cancelled, and that the injunction heretofore granted be, and the same is hereby, made perpetual,’ ” &c. From this decree (which ought to appear in the report of the case) the defendaut appeals to this court upon the following-exceptions : I. That his honor erred in holding that the Corbin Banking Company was the agent of the defendant company, in negotiating the loan to the plaintiff. II. That his honor erred in holding (1) that the Corbin Banking Company, as agent of the defendant company, had under its control the funds of said defendant company; (2) that said Corbin Banking Company furnished blanks to W. H. Duncan for the purpose of receiving applications for loans; (3) that said Corbin Banking Company fixed the terms on which loans were to be made; (4) That said Corbin Banking-Company accepted the security offered by plaintiff Bates, and otherwise directed the application of the funds entrusted to it, — 98 — which several findiugs were not only without evidence to support, but contrary to the testimony adduced at the trial. III. That his honor erred in holding that W. H. Duncan was the agent of the Corbin Banking Company, notwithstanding the said Duncan was employed and paid by the plaintiff. IV. That his honor erred in holding that W. H. Duncan advertised himself as the agent of the Corbin Banking Company. V. That his honor erred in holding that either the Corbin Banking Company or the defendant company should be charged with knowledge of communications made by J. B. Bates, the husband of plaintiff, to W. H. Duncan. VI. That his honor erred in holding that J. B. Bates, the husband of plaintiff, was not her agent in receiving the money borrowed by plaintiff. VII. That his honor erred in holding that the money borrowed by the plaintiff was not for her separate estate, use, and benefit. VIII. That his honor erred in holding that knowledge communicated to W. H. Duncan by J. B. Bates (held not to be the agent of his wife, the plaintiff,) was, nevertheless, to be imputed to the defendant company. IX. That his honor erred in holding that the note and mortgage of plaintiff are null and void, and not enforceable against her separate estate. X. That his honor erred iu refusing the relief demanded by defendant. XI. That his honor erred in rejecting the testimony of F. W. Dunton. The questions involving the rights of married women under the Constitution and laws of this State has been so often and fully considered in our courts, that we do not think it necessary in this case to go into the general subject again. 1 Exceptions 1, 2, 3, 4, 6, and 7 complain of findings of fact by the Circuit Judge, principally upon the subject of the relations between the Corbin Banking Company of New York and the defendant company in Scotland, and of those between W. H. Duncan, of Barnwell, S. C., and the said Corbin Banking Company. Upon the points indicated iu the above — 99 — exceptions, we have considered the evidence, which is printed in the brief, and has been so fully and clearly stated in his decree by the Circuit Judge, that we think any attempt to restate and review it would add nothing, but possibly confuse it. After careful consideration, we cannot say that the findings of fact by the Circuit Judge are without evidence to sustain them or against, the weight of evidence. 2 Exception 11 complains that the judge “rejected” the uucontradicted testimony of F. W. Duuton, of New York, who was examined by commission. This was a suit in equity, and heard by the judge, sitting as chancellor; and he had the right to judge of the credibility of all witnesses examined in the case. In his decree he states as follows: “Before entering upon a discussion of the legal questions involved, it becomes necessary to state as concisely as possible our conclusions of fact as found from the testimony. In arriving at these conclusions, we deem it proper to say that we have made a careful study of the testimony in all of its bearings, and have given to it such weight as in our judgment it is entitled to. We are not favorably impressed with the testimony of Frederick W. Duuton. It does not strike us that this witness was actuated by a desire ‘to speak the whole truth,’ especially when we take into consideration the fact of his long connection as a partner with the Corbin Banking Company, and his very recent withdrawal from the partnership,” &c. We can not. say this was error. 3 That brings us to the remaining exceptions, which, in substance, complain “that his honor erred in holding that either the Corbin Banking Company or the defendant company should be charged with knowledge of communications made by J. B. Bates, the husband of plaintiff, to W. H. Duncan;” the judge saying, that “he must hold that the defendant company, the real lender, knew this money was borrowed for the express purpose of paying the debts of the plaintiff’s husband, these intermediaries being the agents of the defendant company.” The appellants vigorously contest the correctness of this ruling, and insist, on the contrary, that the correct rule is, “That to have the effect of bringing knowledge home to the — 100 — principal, the notice must be to his agent, and not to any agent or attorney employed by such agent.” This is the controlling-issue in the case, and is not at all free from difficulty. It seems that Duncan, of Barnwell, S. C., advertised that he had money to loan on improved farms in Barnwell County; that the husband of plaintiff applied, and obtained the promise of a loan of $1,000, on the security of his wife’s lands; the agreement went forward to the Corbin Banking Company of New York, and in due course a bond and mortgage, drawn payable to the defendant company, was returned through the Corbin Company, and after being executed by the plaintiff, was returned to the Corbin Company. In the course of the negotiations for the loan, Bates, the husband of plaintiff, informed Duncan that he needed the money to pay his debts, and it was so applied. Now, if the defendant company itself had negotiated the loan, and had been informed by Mr. Bates that he was obtaining the money to pay his own debts, the comjaany, under our decided eases, could not as lenders have recovered the bond and mortgage. And further, if Duncan had been the direct agent of the company, and received the information referred to, it would have been imputed to the company lending the money, and they could not have recovered the bond and mortgage. ‘ ‘Notice to the agent is notice to the principal. In the relation of the principal to a third party, the undisputed rule exists, that notice to the agent is notice to the principal, if the agent comes to the knowledge of facts, while he is acting for the principal.” 1 Am. & Eng. Enc. Law, 419 (agency); Pritchett v. Sessions, 10 Rich., 293. “A married woman has no power to borrow money for the use of her husband, nor to give her note therefor, nor bind her separate estate by a mortgage executed to secure such note. Therefore, such note and mortgage can not be enforced against the maker, when the lender knew that the money was to be used in paying a judgment debt of the husband; and knowledge by the lender’s agent, through whom the loan was negotiated, -was knowledge by the lender himself.” Salinas v. Turner, 33 S. C., 231. So far the matter is plain, but it is insisted that the doctrine does not apply when another or sub-agent is introduced—that — 101 — notice to the agent, but not to the sub-agent, will be imputed to the principal. There seems to be no case in our .reports upon that precise point, but I confess that I am not able to perceive the principle on which the alleged distinction rests, if both the agent and sub-agent are, as here, engaged in the same business for the principal, although it may be on different parts of that business. Such seems to be the general rule. “Where an agent has power to employ a sub-agent, the acts of the sub-agent, or notice given to him in the transaction of the business, have the same effect as if done or received by the principal.” Sooy v. State, 41 N. J., 394; Story’s Agency, §§ 452 and 454. “An attorney employed by an agent for his principal is the principal’s attorney.” Porter v. Peckham, 44 Cal., 204. There is, however, a line of cases which, at first view, would seem to modify the above rule, of which Hoover, assignee, v. Wise et al., 91 U. S., 308, is generally regarded as the leading-authority. The case was decided by a divided court, Justices Miller, Clifford, and- Bradley dissenting. Upon considering carefully the dissenting opinion of Mr. Justice Miller, as well as the principal opinion, we think it will be found that even that case does not question the general rule, but labors to limit it by an exception, in reference especially to banks acting as collectors of money among themselves, <&c. We might not be willing to go so far in the direction of the exception as indicated in the opinion, but that case announces this doctrine: “The rule of law is undoubted, that for the acts of a sub-agent the principal is liable, but that for the acts of the agent of an intermediate independent employer, he is not liable. It is difficult to lay down a precise rule which will define the distinctions arising in such cases. The application of the rule is full of embarrassment. Without attempting to harmonize or to classify the conflicting authorities, we think the case before us falls within a particular range of decisions,” &c. We do not think this case is analogous to that of Hoover v. Wise, or that the Corbin Banking Company, in its connection with this case, was an independent employer. Athough the parties were widely separated, it was one transaction, in which the defendant companj»' never relinquished their place as principal; the — 102 — Corbin Banking Company and W. H. Duncan meanwhile performing' their respective parts in the business, under the general direction of the defendant company. This question does not appear to have been made and argued in the court below. The judgment of this court is, that the judgment of the Circuit Court be affirmed.