Woodhouse v. Crescent Mutual Insurance

■ Tlie opinion of -tlie Court was delivered by Manning, J. Tbe plaintiff alleges tbat sbe is tbe owner of thirty shares of stock of'the defendant Company of one hundred dollars each, and tbat it has' transferred them to one Mrs. Coleman without the plaintiff’s consent or authority, and refuses to longer recognise her as tbe owner of the shares and to pay her the dividends thereon. The suit is for the recovery of the value of the stock, three, thousand dollars, and a solidary judgment is prayed against the Company and Mrs. Coleman. The Insurance Company pleads the- general issue, and specially avers that the stock was bought by Carroll W. Allen in 1876, as agent of the plaintiff, who held it until 1879, and then sold it in the same capacity ; that in this interval- Allen as agent received the dividends and transmitted accounts to the plaintiff, of which those transactions formed apart; that Allen’s agency was not confined to this matter, but he leased her property in New Orleans, collected her rents, invested those rents for her, etc., under a power of attorney, and that all these ci'rcufiistances justified the Company in treating Allen as her agent with full power to sell the stock. ■ Mrs. Coleman answered that she purchased the stock, paid for it. now owns it, and knows nothing of the plaintiff or her agent, or of their affairs. •The issues were submitted to a jury, who found for the defendants, and there was judgment accordingly. . . ' - [240] The plaintiff lives at Brownsville, Texas, ami owns a house and lot in New Orleans. By notarial act dated Oct. 28, 1875, she made Allen her agent with full power and authority to borrow money, to draw and endorse notes for money so borrowed, and to mortgage her property to secure their payment. He bought the stock of the Insurance Company with money obtained from a mortgage upon her property, executed by him in 1876. The stock was entered upon the books of the Company in her name. He collected the dividends and accounted to her for them. His accounts, transmitted to her, contain entries of these and other business matters. He does not appear to have had any special airthorization to buy stock, or to sell stock, or to make any other investment, nor even to collect her rents, nor to lease her house. But he did all these things, and she received and approved his accounts of them, and ratified them. There was never any intimation of disapproval. On the contrary, she evidently thought this was precisely what he was agent for. Certainly this was his chief business as her agent. Allen made a note for $4,400, as her agent, and pledged the insurance stock as collateral to secure its payment. At the maturity of the note he sold the stock and with the proceeds paid it. This was done in June, 187,9. A broker purchased the stock for Mrs, Coleman, and the transfer on the Company’s hooks was made to her. Allen had held the stock certificates during the three years Mrs. Woodhouse owned them. She never saw them. . It is very clear that Mrs. Coleman owes the plaintiff nothing, nor do we think the Insurance Company is liable. The power of attorney authorized the agent to borrow, to execute notes, and to mortgage property. Allen therefore had authority to make the note, to secure which the stock was pledged. If Allen had not paid the note the pledgee could have caused the stock to be sold. Allen did that which could have been compelled by legal proceedings. He sold without the intervention of the law, and Mrs. Woodhouse’s obligation was extinguished. Outside of the power of attorney he was the manager of her affairs here. The stock was sold to him as her agent, and the Company’s books contained the transfer to him in that capacity. To him the dividends of three years were paid, the stock certificates being in his possession all the while, and these certificates were produced by him when the sale was made, and were surrendered. If he was without authority to sell, and loss ensued to the plaintiff, the damage should-not be repaired by the Company, who was induced by her own acts to treat her agent as she had treated him herself. When one of two innocent persons must suffer the law selects as victim that one who occa [241] sioned the loss by his own fault or negligence. Frosten vs. Legendre, 8 Ann. 400; Walker vs. Cassaway, 4 Ann. 19; Florat vs. Marchand, 26 Ann. 741; Malian vs. Dubuclet, 27 Ann. 45. The plaintiff’s counsel lays stress upon the fact that Allen exhibited his power of attorney when the stock was sold and was about to be transferred, and the Company had but to inspect the instrument to ascertain the absence of authority to sell the stock or any property. But it is manifest that under that power he had not authority to do any act he had done in the general management of her business—no authority but to borrow, sign notes, and mortgage—yet all his or her business with the Company had been done by him with her approval, and she had not only held him. up to the Company as her agent, but he was in fact such, and her testimony exhibits her entire satisfaction with his management until after this sale. Judgment affirmed.