Cowles v. Burns

The opinion of the court was delivered by PIorton, C. J.: In this case the j ury specially found that J. W. Stover was authorized by the plaintiffs to collect the money due on the bond, coupons and mortgage sued on; that he was authorized by the plaintiffs to release the mortgage; and that at the time of executing the release he acted as their agent. On the part of the plaintiffs, it is claimed that these findings are entirely without evidence to support them. This is the material question in the case. From the record we are furnished with this testimony: Sometime in 1875, J. W. Stover was on a visit at Norfolk, Connecticut, where plaintiffs reside, and made the arrangement with them that he was to negotiate loans in Kansas, and take therefor notes and mortgages in his own name, and indorse them in blank to the plaintiffs, and divide with them the commissions for placing such loans. He was also to look after the collection of the loans. Upon his return to Kansas he commenced operations. His usual course of dealing with the plaintiffs was to take loans in his own name, have the mortgages recorded, and then indorse the paper to plaintiffs by signing his name on the back of the note and interest coupons in blank, and assigning the mortgage in the usual form. He obtained the money from plaintiffs by draft, usually drawn to the order of his bankers, Messrs. Dayton, Barber & Co., of New York city. When he had money on hand, he paid the borrower the money at the time of the execution of the notes and mortgage. If he [37] did not have money on hand, he made arrangements with the borrower to wait until he got the money from plaintiffs. When interest on the notes became due, he collected it by the authority and request of plaintiffs, and placed the same to their credit on their general account on his books. When interest was not paid, he foreclosed the mortgages by their instructions. When the land was sold under foreclosure, he bid the land off to them by their authority, and had sheriff’s deeds issued to them and placed upon record. The lands which they held by sheriff’s deeds he would sell when he could — some of them for part cash and part on time. . For the deferred payments, he would take notes and mortgages in his own name and'indorse them to plaintiffs. The deeds for the lands sold by him would be made by them to the purchaser. With the approval of the plaintiffs, when he had money on hand from collections received for plaintiff, he would reloan the money and take therefor other notes and mortgages in his own name, and assign them likewise to plaintiffs. He was instructed by plaintiffs, when parties wanted to pay them money at any time, whether the loans were due or not, to receive the money and release. In several instances the notes and mortgages were reassigned to Stover, and the mortgages released of record. There was no difference in the release of the mortgage sued on and in cases where he released after the mortgages were reassigned to him. On cross-examination, J. W. Stover testified among other things as follows: “I do not know that I stated o.n Saturday that I had authority from plaintiffs to release this mortgage. I think I had the authority from them to releáse mortgages. Cowles & Eldridge both understood the manner of my doing this business. When a mortgagor wished to pay off his loan before it became due, he was sometimes in a hurry to have a release of his mortgage, and in all these cases I released the mortgage on receipt of the money, gave plaintiffs credit on their account, and asked them to reassign to me; and in most cases they did so.” Also, “ Clinch y paid the balance of the purchase-money sometime in 1879, to pay off the claim we had against the land as shown by bond for deed from Burns [38] to Clinchy, I may have testified on Saturday that Clinchy paid off the mortgage of Burns, but if so, he did it in the payment of a claim we had against him. That was what I meant when I stated that he paid it off. I do not know that anybody was present except the register of deeds when I released the mortgage. This was some time after I sold the mortgage to the plaintiffs. I paid them for the mortgage at thetime I released it. The plaintiffs were not present to receive the money. I did not get an assignment of the mortgage back to me, but I made that payment by giving plaintiffs credit on my account. I then had a balance in my favor with them.” 1. Parol agency competent evidence of. The evidence of the plaintiffs flatly contradicted Stover's testimony; yet the jury were' the judges of the credibility of the witnesses; Stover was present before them, and it was for them, not for us, to say which of the witnesses testified truthfully. By the testimony of Stover, express authority on his part to collect the note and reL lease the mortgage before due, was proved. The jury, therefore, had" positive evidence to support the special findings referred to, and neither these special findings nor the others are inconsistent with the verdict. We are aware that the rule is, unless express authority is established aliunde, that the possession of the securities by the agent is.the indispensable evidence of his authority to collect the principal, and that whoever pays the agent without that evidence, does so at his own risk. Yet, here express authority was established, if the jury accredited Stover — and they must have credited him, from the special findings and verdict returned by them. So, also, we fully understand the law to be, that an agent having authority to receive payment of an obligation is not authorized to receive it before it is due. But the witness Stover expressly stated that he had, authority from the plaintiffs to receive payment whether the loans were due or not, and upon payment to release the mortgages. When money was collected on notes and mortgages, it was not the arrangement for Stover to return it at once to plaintiffs in Connecticut, but by their authority he placed the same to their credit on their account on his books, and with such funds it was his [39] custom to make other' loans and take new notes and mortgages therefor. As it was part of the arrangement between plaintiffs and Stover that the latter should open up and keep an account with them, and then reloan the moneys paid to him upon the notes and mortgages held by them, the note and mortgage were to all intents and purposes as fully paid to plaintiffs by Stover giving them credit upon their account, when he had a balance due him from them, as if Burns or Clinchy had actually paid the money and Stover had given plaintiffs credit on their account for it. If plaintiffs’ money has been retained or embezzled by their own agent, they must suffer the loss resulting from their misplaced confidence, and the.defendants cannot be»expected to make that loss good'. 2. Firm when bound by acts of agent. Counsel for plaintiffs contends the court erred in permitting Stover to testify to acts done by him, tending to show that he was the agent of plaintiffs in releasing the mortgage. “Now, it is competent to prove a parol agency, and its nature and scope by the testimony of the person who claims to be the agent. It is competent to prove a parol authority of any person to act for another, and generally to prove any parol authority of any kind by the testimony of the person who claims to possess such authority.” (Howe Machine Co. v. Clark, 15 Kas. 492.) All of the testimony from Stover concerning any acts done by him for the plaintiffs, was stated by him to have been done at their request and with their authority; therefore the objection made to the introduction of the evidence cannot be sustained. There are one or two important questions ably and elaborately argued by_ the counsel for plaintiffs upon the instructions requested by them, but refused, and also as to certain portions of the charge of the court. In view, however, of the special findings of the jury, it is unnecessary to enter upon a discussion of other matters. Under the special findings of the jury, the note executed by Burns was satisfied by the agent of plaintiffs, and the mortgage executed on the same [40] date also released by their agent. ' Upon such findings, all of the defendants were entitled to a judgment in their favor, and the verdict of the jury was in harmony with such findings. Therefore the judgment of the district court must be affirmed. All the Justices concurring.