Court Opinion

ID: 7987880
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:27:39.816249+00
Date Added: 2024-06-11T16:35:15.335471
License: Public Domain

Whitfield, J.,
dissenting.
In addition to the facts set out by my Brother Cooper, I deem it important, to a proper understanding of this case, that certain other facts, shown by this record, and fully set out in the very clear and fair abstract of the case made by the learned counsel for appellant, should be stated. In the opinion of the *797court it is said that, after some small payments had been made on the note to the administrator of Mrs. Jeffries, “it was then discovered that the wife of Hill had not joined in the trust deed securing the note to Mrs. Jeffries. ’5 But the wife of Hill had not joined in the first trust deed, executed in December, 1885, nor in the second, executed in January, 1889 — both made to secure Patty in the payment of the purchase price of the land. Again, it is stated, in the opinion of the court, that, ‘£ on final hearing, it was ag'reed that the sum due by Hill was $500.” To avoid misconception, it should be stated that the admission was that that sum “ was due on said note ” — the new note to Mrs. Jeffries — and not on the purchase money of the land. Patty, some time after the execution of the second trust deed, to secure himself, in January, 1889, had in his hands money belonging to Mrs. Jeffries, as her agent. “He was intrusted by her to invest her money to her best interest, and in none of such investments was she consulted. ’ ’
About the first of January, 1890, Patty had Hill to execute a note to Mrs. Jeffries for $650, and a trust deed to secure it, in which, as usual between Patty and Hill, Hill’s wife did not join. This sum was to pay Patty the balance of the purchase money on the land, and Mrs. Gaston a loan due her by Hill, Patty having also acted as the agent of Mrs. Gaston. Patty is dead and Hill did not testify, so that what took place between them is unknown. This sum of money ($650) was not actually, it seems, handed by Patty to Hill, and then handed back by Hill to Patty, as the agent of the two lenders — Mrs. Jeffries and Mrs. Gaston — but the transaction, so far as this record discloses, was, in effect, nothing but a mere loan by Patty to Hill, as agent of Mrs. Jeffries, and a payment out of that loan, by Hill to Patty, as such agent, of the unpaid purchase money of the land, and the debt due Mrs. Gaston. The actual manual handing back and forth of the money would have been a perfectly idle ceremony. The notes and trust deeds, executed by Hill to secure Patty and Mrs. Gaston, were canceled and *798delivered up, those debts being thereby extinguished and paid off in full. There is absolutely nothing in the record to show any intention whatever, on the part of Patty, as the agent of Mrs. Jeffries and Mrs. Gaston, and Hill, to keep those debts alive, or to renew them. The intention of both accorded perfectly with, and is shown by, what they did. They extinguished fully and forever those debts, and the notes and trust' deeds evidencing and securing them were canceled and surrendered up to Hill. Further, the note and trust deed for the purchase money were not assigned to Mrs. Jeffries. On the contrary, she, through her agent, Patty, chose her own security — carved out a new and independent security — and various payments were made thereon. Hill was an illiterate man, who could not ‘ ‘ read writing much, ’ ’ but was believed, in the language of one of counsel, testifying, to be ‘ a worthy poor man. ’ ’ This being the case made by the record, it seems to me that it is impossible to distinguish it from Howell v. Bush, 54 Miss., 437, and that that case is decisive of it. That case was thoroughly considered. There was an original opinion, a rehearing, a second opinion, and a further petition for reargument denied. Said Judge Campbell, speaking for a unanimous court: “A new trust deed was given by Howell, and the old one extinguished. There was no intention to keep it alive. It was not relied on, and was therefore canceled. It was not done by fraud or mistake, but honestly and intentionally, for the purpose of getting it out of the way. True, it was done ignorantly as to the law requiring the joinder of the wife to make the new deed of trust valid as against the homestead right, but that does not alter the fact that the parties did not intend to keep the former trust deed alive, but to cancel it and rely exclusively on the new one taken. When parties capable of contracting make their own arrangements, and there is neither fraud nor mistake of fact, equity will not interpose to thwart their designs or change their agreements. It will not make contracts for parties. ’ ’ And this doctrine has been as expressly *799declared in Skaggs v. Nelson, 25 Miss., 94, and Pitts v. Parker, 44 Miss., 247, and was always the law here, as I understand it, until the unreported case of McMullen v. Home Investment Co. (1894), and Trust Co. v. Peters, 72 Miss., 1058, in which I dissented. I said, in my dissenting opinion in that case, that it practically overruled Howell v. Bush, supra, and I think the correctness of that remark is unanswerably demonstrated by the result in this case. My brethren, however, profess to adhere to both Trust Co. v. Peters and Howell v. Bush. How they do so, with all deference, I cannot comprehend, for, as I view them, there never were two cases in more patent and irreconcilable conflict. Entertaining their views of the doctrine of subrogation, it seems to me they should expressly overrule Howell v. Bush, and not leave it to further mislead the bench and bar.
The learned counsel for appellant makes an ingenious argument to avoid the effect of Howell v. Bush, insisting earnestly that what took place was a renewal of the purchase money debt. But the parties were changed and a new creditor introduced, and I understand my brethren to concur with me that that contention cannot be maintained. I conclude, therefore, as to subrogation, first, that the vendor’s lien was paid off and discharged, when the trust deed to Patty, the vendor, was satisfied, canceled, and delivered up to Hill, and the trust deed to secure Mrs. Jeffries was given, and there was no vendor’s lien existing, when the bill was filed, to which complainant could be subrogated. Skaggs v. Nelson, supra, is conclusive of this. For, secondly, if it be said that the vendor’s lien can now be assigned, the perfect response is that the fact in this case is it was neither so assigned, nor intended by the parties to be so assigned. Had it been, the note and trust deed to Patty would not have been canceled and delivered to Hill, but assigned, as they might easily have been, to Mrs. Jeffries. And, thirdly, equity never enforces conventional subrogation against the proven intent of the parties. Because what Patty thought at *800the time of the execution of the trust deed to secure Mrs. Jeffries, and Hill also thought, was a valid trust deed, has turned out to be invalid, and their thought about its validity has been found to be a mistake of law, honestly committed by both, to substitute the situation as it has ultimated for the situation as it was when the Jeffries trust deed was made, and impute to the parties to that contract an intention they would have entertained had they known then that the joinder of the wife was essential to the validity of that trust deed, is, it seems to me, to repeal the statute requiring the joinder of the wife, and to work out subrogation by ex post facto intention, and I see here no element of legal subrogation. See authorities cited in my dissenting opinion in Trust Co. v. Peters, supra.
Turning now to the very clear statement of the feature of the law of agency discussed, as put by my Brother Cooper, I have to say that I heartily approve it. But I have searched the record in vain for any testimony to which that principle applies. The answer emphatically denies any fraud on Hill’s part — any co-operation on his part, with Patty to defraud Mrs. Jeffries — and avers that if there was any “fraud .on Patty’s part it lies between complainant and her agent.” And the testimony wholly fails to connect Hill with any fraud which Patty practiced on his principal, Mrs. Jeffries. I quite agree with my Brother Cooper’s statement of the abstract law, but I differ from him wholly as to its applicability to the concrete case before us. Says Mr. Mechem (Mechem on Agency, § 796): “A third person, however, who deals with an agent, is not liable to the principal for a fraud perpetrated by the agent upon his principal in that transaction, unless such third person was a party to the fraud. ’ ’ To this proposition he cites the cases of Mason v. Bauman, 62 Ill., 76, and Bacon v. Markley, 46 Ind., 116, both directly in point. In the former the court say, at page 81: “ It is, however, urged that Stackweather was appellee’s agent. . . . We are unable to comprehend how that fact could charge them with notice that Stackweather *801was acting fraudulently toward his principal. A man is always bound by the fraudulent acts of his own agent, perpetrated on a third person whilst acting under his authority in reference to the subject of his agency; but we are aware of no rule, nor any adjudged case, which holds that a party can ever be bound by the fraudulent acts of another man’s agent. And why should they ? They do not appoint the agent. They confer upon him no authority, and do no act that, in morals or in law, should render them liable for the acts of another man’s agent upon. whom they conferred no power. ”
The case cited by my learned brother (Panama Co. v. India Rubber Co., L. R., 10 Ch. App., 515, s.c. 14 Eng. Rep., Moak, 759) was a case of flagrant fraud, clearly proved to have been shared in by the third party — a case of one party, in effect, bribing the agent of the other party, falling under the cases classed by Mechem (§ 797, where it is cited), “ where the third person conspires with the agent. ’ ’ Nor must this case be confounded with that other and wholly different category, where the agent pays his own debt with the principal’s money, the creditor of the agent knowing it was the principal’s money —finely illustrated by the cases cited in the note to Gerard v. McCormick, 14 Law. Rep. Ann., 234 — a category in which, as stated in Smith v. James, 53 Ark., 137, “it is only necessary that the third party should know that the party with whom he dealt was an agent, in order to be apprised that the transaction was beyond the scope of his authority. ’ ’ Here Hill knew that Patty was Mrs. Jeffries’ agent, and that the money of Mrs. Jeffries was loaned to him, and that, with that money, made his, Hill’s, own by the borrowing, he paid off Patty’s trust deed. How is it possible to safely say that, from these meager facts alone, the court below should have found that Patty had, in the dealing, an individual interest adverse to his principal, within the knowledge of Hill, and that Hill conspired with Patty to defraud his principal, Mrs. Jeffries, especially in view of the settled rule that fraud must be established *802by clear and convincing proof? It is perfectly clear that both Hill and Patty honestly believed the trust deed to Mrs. Jeffries was not only a valid, but an abundantly sufficient, security when given. If it had been, would any court hold that Patty’s interest in paying his debt was adverse to Mrs. Jeffries, whom he had abundantly secured, much less that Hill aided Patty to defraud her ? Since it has turned out that it was invalid, can the mere fact that it has so turned out, make his interest adverse? But, even if that were conceded, does the further .necessary fact appear that Hill then, at the time, knew all this, and conspired with Patty to defraud Mrs. Jeffries? The learned chancellor below — -one of the ablest, most conscientiously painstaking, and accurate judges who ever adorned the bench of this state — -has found the issue of fact on this branch of the case against appellant, and in my judgment the decree should be affirmed.
I sympathize deeply with the feeling that Hill should not keep a home he has not paid for, but I am restrained from yielding to this prompting by the reflection that a general rule for the administration of justice, according to the established principles of law, though not availing against the injustice of a particular instance, is better than the judicial chaos which would result from its nonobservance. Human equity corrects the defects of human law, arising by means of its universality. That equity which is administered by the Omniscient alone, is alone equal to meting out absolute right in every case.
I regret that I am forced to dissent from my brothers, but, as the difference of opinion entertained by me amounts to conviction, no other course is open to me.