Cooley v. Willard

Mr. Chief Justice Walker delivered the opinion of the court: This bill was exhibited to enjoin the collection of a judgment upon a note alleged to have been previously paid, and to compel the note and deed of trust given to secure its payment to be surrendered to complainant. It appears that Paschal Woodward, acting for appellee, loaned to appellant the money, took his note, with a power of attorney to confess a judgment in case of a default in its payment, and also a deed of trust on real estate as security for the sum thus loaned. It likewise appears from the evidence that appellant paid the several installments of interest, as they fell due, to Woodward, who paid them to appellee, who indorsed them upon the note as paid by the hands of Woodward. Appellant, at the maturity of the note, paid the entire sum necessary for its satisfaction to Woodward, who agreed to get the note and deliver it to him. But he never did, nor did he pay the money to appellee. There is no proof that Woodward was authorized to receive this money, but that was attempted to be shown by proof that he was appellee’s general agent. The witness, S. W. Woodward, testified that it was his impression that Paschal Woodward loaned and collected money for appellee, in numerous instances. He was, however, only able to give the names of persons to whom he had loaned money, but could name no person of whom he had made collections, except appellant. Appellee denies such authority by his answer, and we think this evidence fails to establish such authority. It may show a general agency to loan money and take securities for its payment, but not to collect for appellee. The fact that he received the money of appellant and paid it to appellee, is as much evidence that he was the agent of the former as the latter. Nor can it be inferred, because the power of attorney and the deed of trust were given to Woodward, that he was empowered to collect the money. Such is not claimed to be the effect of such instruments, unless it is so expressed in them. ApjDellant having entrusted Woodward with the money, if designed as a payment, he should have looked to his authority before he gave him the money, and if he had no such authority the risk was his, and not appellee’s. Had he called for and insisted upon the production of the note, he would have learned that it was not in Woodward’s possession, which would have been sufficient to put him upon his guard. It is a familiar rule, that where one of two innocent persons must suffer loss, through the wrong of another, the party who enabled the person to commit the wrong must sustain the injury. In this case appellant enabled Woodward to appropriate this money to his own use, and failed to see whether he was authorized to receive it, and must, therefore, submit to the loss. No reason is perceived for reversing the decree of the court below, and it is therefore modified, so as to dismiss the complainant’s bill without prejudice, and, as modified, the decree is affirmed. Decree modified.