Court Opinion

ID: 6737682
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:48.681014+00
Date Added: 2024-06-11T16:01:51.178260
License: Public Domain

Burke, T.
(dissenting). I desire most strenuously to dissent. This case is almost identical in facts with Trubel v. Sandberg, 29 N. D. 378, *198150 N. W. 928, and Martinson v. Kershner, 32 N. D. 46, 155 N. W. 37. In each of the three cases Faber had acted as the agent- of the American Mortgage & Investment Company and sold mortgages to his neighbors in Illinois. In each of the cases said clients desired their money from the mortgagors, but had retained possession of the notes and mortgages. In each of the cases the mortgagor paid the money to the investment company, who embezzled the same. In two of the cases this court held that there was an entire lack of evidence of actual agency upon the part of the investment company to receive the money, and yet in this case — identical in facts — the majority of this court desires to overrule the law to which they have subscribed within a year. In the majority opinion it is said, and correctly, that Mr. Fitch paid his money to the American Mortgage & Investment Company without receiving his notes, and that the burden of proving the authority of said investment company to receive the money was upon him. The burden, indeed, is stronger than the majority opinion states it to be. Ostensible agency cannot be claimed; it must be actual agency. Upon what evidence does the majority find such agency? Let us see. Fitch never heal’d of Engelhardt, nor Engelhardt of Fitch, so far as this evidence shows; nor is there any evidence to show that Engelhardt ever heard of the investment company. After the money had been paid and embezzled, Fitch hired an attorney and went to Illinois to see Engelhardt and Faber. Absolutely the only testimony upon which they rely to show agency is Fitch’s recollection of this conversation with those two parties. Both of these conversations were after the payment. Fitch says that he called upon Engelhardt and “asked him if he did his own business, and he said that Mr. Faber transacted all of his business. So, as I could not get much satisfaction out of him, — he did not know anything about the matter,- — we went down to see Mr. Faber.” This is every iota of testimony upon which the majority finds that Faber was Engelhardt’s agent. Fitch then proceeded with his attorney to interview Faber, and he testifies:
Q. In that conversation did Mr. Faber state to you that in substance he had notified the American Mortgage & Investment Company to collect the money on this note ?
• A. He said he had, but did not receive anything.
*199This is every syllable of tbe testimony that is relied upon to show that Faber appointed tbe investment company agent for Engelbardt to collect tbe money. I insist that this is obviously inadequate evidence to show tbe positive agency of tbe investment company for Engelbardt. Plaintiff took Faber’s deposition, and I set forth tbe substance of bis testimony:
“It (tbe note) was delivered to me as such by tbe said American Mortgage & Investment Company for whom, I was selling these loans.”
At page 21 of tbe abstract be testifies: ’
Q. It was Mr. Engelhardt’s money with which you bought this mortgage, wasn’t it?
A. It was Mr. Engelbardt’s money in payment for the loan which I sold him.
Q. You have been acting for him since this controversy has arisen, haven’t you?
A. Only in a limited way.
Q. For whom were you acting when you wrote those letters to Mr. Fitch ?
A. For myself. I bad not been requested by anyone to do so.
Q. Did you receive any commission for negotiating this loan ?
A. I did.
Q. From whom?
A. From tbe American Mortgage & Investment Company.
Q. Now you bandied this money for Mr. .Engelbardt, didn’t you ?
A. Not entirely.
Q. In what particulars did anyone else have anything to do with it ?
A. To the extent that I was selling those loans for the Mortgage & Investment Company.
Nowhere from tbe beginning to tbe end of tbe abstract' does Faber either say that be was agent for Engelbardt, or that be represented him in any manner. On tbe contrary be asserts over and over again that be was tbe agent of tbe American Mortgage & Investment Company *200and received commission for making tbe sale of tbe loan in question to Engelhardt, who paid him nothing. True, he testifies that Engelhardt left the mortgage and notes in the bank of which Eaber was cashier, in an envelop upon which his name was written. There is no evidence under what conditions they were left; whether in a safety deposit box, or as collateral or for convenience. I do not believe the incident furnishes any authority for the bank (and much less Eaber) to act as his agent, and certainly gave the bank no authority to appoint still another agent to act for him.
I insist that there is not a shred of evidence showing that Englehardt gave the bank authority to act as agent for him, but, even assuming that he did, there still remains the open bréale in the evidence whereby the bank or Eaber appointed the American Mortgage & Investment Company as Engelhardt’s agent to make the collection. Upon one or two occasions coupons were sent to the mortgage company for collection. Was this sufficient to constitute the mortgage company Engelhardt’s agent? The authorities say not. In Hollinshead v. John Stuart & Co. (Hollinshead v. Globe Invest. Co.) 8 N. D. 35, 42 L.R.A. 659, 77 N. W. 89, the authorities are reviewed, and it is clearly held that the collection of interest does not show authority to collect the principal. See also Mechem on Agency, §§ 934-945; Stolzman v. Wyman, 8 N. D. 108, 77 N. W. 285; Corey v. Hunter, 10 N. D. 5, 84 N. W. 570; and also the late case of Martinson v. Kershner.
Let us examine Eaber’s evidence further:
Q. When those other mortgages, you spoke-of in your direct examination for which you had made loans, became due, how were they collected ?
A. Usually they were sent to a local banh for collection. . . . I do not recollect now that the company collected more than two or three of these loans.
Q. Did you expect Mr. Eitch to send you the amount of the loan here for Mr. Engelhardt?
A. No, I expect him to have me send the papers where he could pay the loan and have the papers.
A. I expected the mortgage company to instruct me where to send *201the papers in this loan for collection, as they had done on several other-loans which had matured and had been paid. ... I did not expect, them to enforce payment or make collection.
Q. If you didn’t expect them to malee collection, why did you send' the interest note to them ?
A. If I had expected the company to make collection of the loans, I should have sent the papers in the loan the same as I sent them the-coupons for collection.
The law is correctly stated in Martinson v. Kirshner, 32 N. D. 46, 155 N. W. 37, as follows: “(1) Agency will not be presumed, and where its existence is denied the burden of proof is upon him who' asserts its existence. (2) The mere fact that the assignee and owner of a negotiable note and mortgage, while retaining possession of such securities, permits the originál mortgagee or the loan broker who negotiated the loan, to collect the interest instalments, does not confer upon such person, without possession of the securities, authority to-collect the principal. (3) The extent of an agent’s authority depends upon the will of the principal, and the latter will be bound by the acts of the former only to the extent of the authority, actual or apparent, which he has conferred upon the agent.”
Nor the foregoing reasons, I respectfully dissent, and am authorized to state that Judge Christianson joins.