Court Opinion

ID: 3812195
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:50:23.499842+00
Date Added: 2024-06-11T07:38:17.553158
License: Public Domain

Counsel criticize the court for failure to decide the question of fact concerning the limitation upon Tarkenton's authority *Page 29 
and for failure to pass on the legal effect of such limited authority. The original opinion shows that the trial court found Tarkenton's authority to be limited, and that by reason of such limitation thereon, knowledge acquired by him would not be notice to his principal, and after stating the contention that the verdict of the jury and findings of the court were not supported by the evidence, it was held that the sufficiency of the evidence upon this point was not properly challenged, and the facts found were therefore assumed to be true. By this, the court treated as a fact the limitation upon Tarkenton's authority which had been found to exist by the trial court; but since counsel do not consider this sufficiently specific, we now express the opinion, and so find, that Tarkenton had no authority to finally fix the terms of the loan; neither was he authorized to appraise the security offered nor pass upon the applicant's title to that security.
The second ground of complaint, that the court failed to pass on the legal effect of Tarkenton's limited authority, is without merit, for it was held that, notwithstanding the limited authority possessed by him, yet because of his knowledge of the fraudulent character of the sale, notice thereof was imputed to Ford and the Deming Investment Company. Counsel have outlined the plan of business pursued by the Deming Investment Company, from which it appears that applications for loans are usually secured and submitted to the company by a local agent such as Tarkenton was in this case. The application is in writing, and contains such information as the company requires to enable it to pass upon desirability of making the loan. An abstract showing the condition of the record concerning the title of the applicant to the property offered as security is submitted with the application. For the purpose of securing this application Tarkenton was admittedly the agent of the investment company, and was the medium through which it obtained the information contained therein. It would not be questioned for a moment if the principal should take the application that knowledge of fraud vitiating the sale, acquired in so doing, would defeat the claim of being an innocent incumbrancer, and likewise such information secured by a duly authorized agent, while performing the duties intrusted to him, would be equally effective. Having furnished him with blanks to secure the information desired, it was within the scope of his authority to acquire all such information, and it was his duty to communicate same to his principal and a failure upon his part to discharge this duty does not prevent notice thereof being imputed to his principal. The fact that the abstract was referred to counsel for an opinion upon the legal sufficiency of the applicant's title to the property offered as security does not change the situation. Neither does the fact that after the loan was approved notes and mortgages were prepared in blank and forwarded to Tarkenton for the purposes of securing the due execution thereof by the borrower and returning them to the company, nor that draft for the amount of the loan made payable to borrower was sent to Tarkenton for delivery.
The contention of defendants in error simply means this: That it was not within the scope of the local agent's authority to acquire information which would tend to show that the applicant did not have good and sufficient title to the property upon which the loan was desired. If this position be tenable, then the Deming Investment Company has built up a system of transacting its business that renders it impervious to notice of any fact which affects adversely the title to property upon which a loan may be desired, for knowledge of the local agent who takes and transmits the application would not impute notice to the company. The attorney who passes upon the abstract, not being charged with the duty of obtaining such information, would ordinarily not acquire such knowledge and if he did know such facts, his knowledge would not be notice to the company, and so on through every step of its business. Thus the investment company could, by the failure of its local agent to communicate knowledge of any fact other than that which would tend to show title in the applicant, assert a claim, as is here done, of being an innocent incumbrancer, and would not be charged with responsibility for any knowledge acquired by its agent, except where it is for their interest and profit to do so. This position cannot be maintained.
In all of the cases relied upon by defendants in error, it was held that knowledge of facts acquired by the agent not acting within the scope of his authority could not be imputed to his principal. From this general statement of the law, there can be no dissent. The distinction between those cases and the facts here involved is that the knowledge acquired by Tarkenton was acquired by him while acting within the scope of his authority, or which had been so recently acquired by him previous to the time of taking the application and performing the other duties intrusted to him as to reasonably warrant the assumption that he still retained it and was under obligation to communicate such knowledge to his principal.
The petition for rehearing is overruled.
All the Justices concur. *Page 30