Case ID: ohio-st_37/html/0445-01.html
Source: Caselaw Access Project
Author: {"author": "Longworth, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Nolte v. Hulbert.
    S. brought suit against N. and others to obtain a sale of land to Satisfy a judgment lien thereon. To this suit H. was made a party defendant, who, upon receipt of summons, give to C., his regular attorney, certain notes indorsed by him in blank, together with a mortgage upon the land to secure the same, for collection. C. caused a cross-petition to be filed on behalf of H., setting up his mortgage lien. The court, upon trial, ordered the land to be sold to satisfy the liens of S. and H. Pending the suit, H. agreed with N. to extend the note for a year from the time when it fell due. Before the time so extended had expired, N., fearing that the land would be sacrificed, employed a broker, who applied to 0. to find a purchaser at private sale. C. went to J. S. and offered him the land for $3,500, telling him of the mortgage, and saying that he had in his possession all the papers necessary to make a clear title. J. S. paid him the money and directed him to pay off all the claims upon the land, including the mortgage of H., and to obtain H.’s cancellation of the mortgage upon his return, he being then absent. C. paid the costs and the claim of S., but embezzled the remainder of the money.
    Held,—That under this state of facts, C. acted as the agent of ,T. S., to make payment to H., and not as the agent of H., to receive payment from J. S,; and that, as between the two innocent parties, the loss must be borne by J. S.
    Error to the Superior Court of Cincinnati.
    The action in the court below was brought by William P. Hulbert, trustee of Julia Harberon, against Herman Nolte and others, to foreclose a mortgage securing certain notes held by him against Nolte. The mortgaged property had been conveyed by Nolte to Seasongood, and by him to Dallas. These latter were both made parties defendant to the suit.
    The facts of the case, as disclosed by the record, were as follows:
    On January 18, 1812, Nolte delivered to Hulbert his note for $2,500, to secure a loan of that amount, together with certain interest notes, the whole secured by mortgage upon city property ; the principal note was payable in two years afterdate.
    In August, 1873, one Steineke, a judgment creditor of Nolte, brought suit against Nolte to obtain a sale of the mortgaged land to satisfy his judgment lien and for other relief. To this suit Hulbert was made a party defendant. On receipt of summons, he sent for Charles Cist, his regular attorney in such matters, and handed to him the summons, together with the notes indorsed in blank, and the mortgage, and took his receipt therefor for collection. A cross-petition was filed on behalf of Hulbert, asking that if the land should be sold to satisfy Steineke’s lien, his rights might be protected and his claim satisfied from the proceeds of the sale.
    While the suit was still pending, the principal note became due, and Hulbert then agreed with Nolte to extend it for another year. There is no evidence' to show whether or no Cist had knowledge of this agreement.
    In March, 1814, the ease was heard and decided, and the land was ordered to be sold. No entry, however, was made upon the minutes.
    
      Nolte, thereupon, fearing that the land would be sacrificed, engaged a broker to find a purchaser at private sale. This broker applied to Cist, who went to Seasongood, a capitalist with whom he had had many dealings of a like character, and between whom and himself existed relations of perfect confidence.
    Cist offered the land to Seasongood for $3,500, and told him of the incumbrances upon it. These he agreed to pay ofE out of the purchase-money, and to furnish a certificate that the title was clear. He said that he had in his possession all the papers necessary to make a clear title.
    Thereupon, Seasongood gave to Cist his check for $3,500, the latter agreeing to pay off all the liens upon the property and to obtain from Hulbert a cancellation of the mortgage when he should return to the city.
    The land was then conveyed by Nolte and wife to Season-good.
    Cist paid the costs and the Stein eke claim, but embezzled the remainder of the money and fled the city.
    At the trial below, in general term, the case having been reserved, the court found that the facts did not show a payment of Hulbert’s claim, and that the loss caused by Cist’s dishonesty ought to fall upon Seasongood rather than Hulbert, and overruled a motion for a new trial.
    The proceeding in error is to review this judgment.
    
      Thomas McDougall, and Jordan, Jordan & Williams, for plaintiffs in error.
    
      Hoadly, Johnston, & Colston, for defendants in error.
   Longworth, J.

The only question before us necessary to a determination of the case is whether at the time the check was given by Seasongood to Cist, the latter acted as Hulbert’s agent to receive payment, or Seasóngood’s agent to make payment to Hulbert. This is a question of mixed law and fact.

The maxim that no man shall serve two masters ” does not prevent the same person from acting as agent, for certain purposes, of two or more parties to the same transaction when their interests do not conflict, and where loyalty to the one is not a breach of duty to the other.

Thus the doings of Cist as Nolte’s agent to procure a purchaser were not inconsistent with his duties to Hulbert as his agent to receive, or to Seasongood as his agent to make payment.

The fact, if fact it be, that at the time Cist received the check he had full authority as Hulbert’s agent to receive payment, would not preclude Seasongood from choosing to deal with him in a different capacity. He might prefer to deal directly with the principal and to receive his receipt rather than that of his agent; and for this purpose to appoint Cist his agent to make payment. He had only Cist’s statement that he was Hulbert’s agent, and was in possession of the notes and mortgage to evidence the fact of such agency. Suppose he had doubted the truth of these statements, would it not have been competent for him to direct Cist to make payment to Hulbert and to bring him his (Hulbert’s) receipt of satisfaction ? Clearly so.

Seasongood testified: “ I gave Mr. Cist the money at the time he gave me the deed, May 9, 1874; the certificate I got after, and I then believed he had paid off the JJuTbert mortgage,” and further, in cross-examination he said : I took it for granted that he would take the money and pay off the mortgage. 1 trusted Mr. Cist to malm the mortgage pa/yment and get me a dear title.”

It is also worthy of note that this was not the only transaction between Seasongood and Cist. They were in the habit of' dealing together in matters of this kind. Seasongood in another place says, I always gave my check to him (Cist) in similar transactions, and trusted him to clear the title.”

Prom this it is manifest that at no time did Seasongood understand that when he gave his check to Cist he was paying Hulbert’s mortgage; on the contrary, he trusted and expected Cist to make the payment and to obtain for him Hulbert’s cancellation.

This conclusion is perhaps strengthened by the circumstance that but one check was given to cover all the several claims. That Cist was Seasongood’s agent to pay off the costs in the Steineke suit, and the judgment in favor of Steineke is beyond doubt. If he was to act in any other capacity in respect to Iiulbert’s claim, would it not be natural to suppose that separate checks would have been given?

These considerations make it unnecessary to inquire whether Cist actually had authority from Hulbert to receive payment, or whether his possession of the notes and mortgage would have authorized Seasongood to deal with him as such agent.

We are asked to hold that the mere foot of possession of a note by an attorney will protect the maker who pays to the attorney against the claim of the payee, and Patten v. Fullerton, 27 Maine, 58, is cited in support of the rule claimed. We should not be prepared to subscribe to this doctrine, even in a case where the question necessarily arose; nor do we think that Patten v. Fullerton bears it out. In that case the additional and most important circumstance existed, that prior partial payments had been made by the debtor to the unauthorized agent, which had been accepted by the creditor. We should long hesitate to hold that a maker of a note may safely pay it to one who has stolen it from the payee, and who falsely pretends to hold it for collection, in the absence of any other evidence of authority than the bare possession. Yet this is the result of the doctrine as claimed.

True, in the case at bar, the notes had been indorsed in blank by Hulbert, and had Seasongood relied on this and’paid them, he would have been safe; yet it appears that this fact was never known to him or communicated to him by Cist.

Upon the whole case we are clearly of opinion that Seasongood did not deal with Cist in any manner as the agent of Hulbert, or at any time suppose that in delivering to him his check he was paying Hulbert’s claim.

We find no error in the judgment of the court below.

Judgment affirmed.