Wolford v. Young

Granger, J. — As we determine the case on the undisputed facts, we' need not refer to questions presented as to the admissibility and competency of evidence. Appellant cites and relies on a rule of undoubted authority: “That, if a debtor owing money on a written security pays to or settles with another a.s agent, it is his duty, at his peril, to see that the person thus paid or settled with is in possession of the security. If not thus in possession, the debtor must show that the person to whom he pays or with whom he settles' has special .authority, or has been represented by the creditor to have such authority, although for some reason not in possession of the security.” The rule has express sanction in this state. See Security Co. v. Graybeal, 85 Iowa, 543; Fisher v. Lodge, 50 Iowa, 459; Draper v. Rice, 56 Iowa, 114; Tappan v. Morseman, 18 Iowa, 500. So far as we know, the rule has the sanction of authority generally. But we think the facts of this case take it out of the rule stated. The defendant resided in the state of New York, and the business, on his behalf, in making the sale of both pieces of land to plaintiff, was done by one J. C. Hall at Boone, Iowa. We inquire for the mutual understanding of the parties when the sale was made. A long time prior to the transaction in question the defendant had sold to plaintiff another tract of land, and the notes had been made payable at the office of the investment company in St. Louis. The money for the 516 interest had been regularly sent to that office and from that office to the defendant, who returned the interest coupons, and, lastly, the note, to the investment company, who sent them to- the plaintiff. The investment company was in no sense a necessary agency in the doing of the business, nor even a convenience. Its location was distant from both parties, so that the cause of its agency was a matter exclusively between it and the defendant. The payments there were not in any sense, for or at the instance of plaintiff. The provision therefore must have been at the instance of defendant, and to subserve his purposes. The second transaction, out of which originated the note in question, was made in the light of the other, and it is not too much to say, as: a. matter of fact, that both parties must have understood, when the same terms were fixed as to. the place of payment, that it would be observed- as was the other, by the money being paid to the company, to be sent forward, and the securities returned through the same channel. If the parties so- understood, it was a special authority for such payments to be made at St. Louis, and the defendant should be bound by them in the absence of notice to plaintiff to discontinue such payments. The conclusion of fact as to. the authority seems fully warranted. If we are warranted in saying the provision as to- payments being made at St. Louis was for the defendant, and it is a. fact that he lived in New York, the question' naturally -arises, what w-as it for? If, because of business relations between defendant and the company, then defendant must have understood that the money would be sent there, and that the securities: must be there for return to the plaintiff, or the company must take the money as it did, -and send it to New York to get the securities for return to the plaintiff. That the company a,t St. Louis was the agent of defendant admits of no doubt, but that fact would not make a 517 payment to it binding, if it had not the securities, unless there was .authority for such a payment; and we reach the conclusion that there was such authority, .and that it was a.n agency purely in the interest of the defendant, in no way a necessity or convenience in the doing of the business between the parties; that plaintiff would naturally understand the money was to be sent there as payment, and that the parties, acted in accord with such an understanding in carrying out the transaction. Nothing in the transactions justifies a conclusion that the plaintiff would or should have sent his money to the company at his risk, and it must have been understood, when the place was selected for payment, that the money would be sent there for that purpose. The, judgment is affirmed.