'the correspondence to which Bolles was a party. or of which he had actual knowledge, taken in connection 'with the other facts duly proven. From the evidence it appears that, in the beginning of the transactions between Creighton and Bolles, copies of the abstracts of title were for·warded for the latter's inspection; but finally he instructed Creighton that it was unnecessary to. forward the same, as he (Bolles) would rely on Creighton's judgment in this regard. It also appears that Bolles relied upon Creighton to keep track of.the taxes upon the various tracts ofland mortgaged to the former, and also to keep him fully posted in regard to the conduct of the parties indebted, and their modes of doing business. When it became necessary to foreclose any of the mortgages, Creighton was intrusted therewith; and he brought the requisite suits, attended the sales; bought in the property when necessary, and had full charge of tlie ·property thus purchased. In many instances, he had sent to him the .satisfaction pieces to be recorded, for the purpose Of discharging the mortgage of record. Of the large amounts of interest paid on the loans made by Bolles, the larger part, if not the whole thereof, was collected by Creighton; and the same is true of so much of the principal sums as was· paid by the mortgagees. Unless William Bolles understood that Creighton was acting in his behalf. and as his agent, in the management of the loans in question, and in attending to the collection of the interest and principal thereof, it would follow that Bolles was willing to invest nearly $200,000 in loans to many different parties, and to leave the same without supervision in his interest; intrusting the control and management thereof to the agent of the debtors..· The correspondence between Bolles alid Creighton covers hundreds of pages and is too voluminous to be copied into an opinion. All that need be said of it is that it clearly shows that· the relation existing between the parties thereto was that of principal and agent, and that Bolles understood that Creighton, in his behalf; was exercising full control over the loans made by Bolles in Iowa, and in his interest was keeping watch over the payment of taxes, the collection of interest and principal, and all other matters necessary for the protection of Bolles' interests ·in the investments thus made: In fact, had. it been .shown that Bolles had in Writing OrIginally appointed Creighton his agent and attorney in fact for the purpose of fully representing Bolles in these transactions, it is difficult, to conceive of anything he would have been expected to do under such written authority which he was not, in fact, called upon to do in. the Jetters written him by Bolles. That Bolles recognized and treated :Creighton as his general agent, having charge over the invest·ments made, with power to demand and receive payment of the principal and interest, thereof, is the only reasonable conclusion deducible from ,the correspondence and acts of the parties. That Creighton so under·stood his authority is clear from his acts. Thus we find him issuing cards to: mortgagees indebted to Bolles, in which it is said, after giving amount due, "Please remit at once, and save further costs;" in others. "If not pai,d at once, mortgage will be foreclosed." These cards required payment to be made to Creighton, and the recipients thereof could con·
SECURITY CO. V. RICHARDSON.
str.ue them only as demands made'by; Creighton on behalf of the holder of the mortgage and note. It appears that in this, and in some other instances, payments on the principal of the debt were made to Creighton before the maturity of the loan, and it is averred that even if it be true that Creighton was acting on behalf of Bolles in'lookingafter and collecting these loans, nevertheless, receiving payment before maturity was not an act within the authority actually possessed by Creighton, and was of such an unusual character as to put parties upon their guard, and that in thus paying before maturity the debtors assumed the risk of the money actually reaching the hands of the creditor. If it be true that Creighton was in fact the agent of William Bolles in Iowa, charged with the duty of looking after his investments in this state, and with authority to receive payment of the principal and interest of the several loans, can it be said that receiving payment in advance of maturity was so clearly beyond the scope of his authority that third parties should have known that in so doing he was acting beyond his authority, and therefore not binding his principal? The exact facts of the case must be borne in mind. It is not a case wherein a debtor, wishing for his own convenience to make payment on a debt not yet due, comes to an agent of the principal, and induces him to accept payment before maturity. Creighton, who, as the evidence shows, was acting as agent for Bolles in the. general management and collection of these loans,· in sending to the debtors. cards containing statements of the times when the interest payments would mature, and demanding payment thereof, includes therewith a statement that payments before maturity on the principal would be received. Thus in the notice sent to the defendant herein regarding the intetest about to mature November 1, 1879, there is printed the following: "To accommodate those wishing to begin to pay oft' their loans in installments, payments of$50 and upward on the principal will be received, and interest stopped thereon if paid at the same time interest is." This statement is found in the variol,ls forms of cards sent out by Creighton generally. Now, when a debtor received such 'a statement in a notice sent to him regarding payment of interest, what would he have the right to infer? Upon inquiring, he would learn that Bolles had constituted Creighton his general agent for the purpose of managing and collecting his investments in Iowa, and that a similar notice in regard to payments by installments upon the principal had been sent to all, o'r nearly all, the partieso\ying debts to Bolles, and that the same had been sent for several successive years, and further, that Creighton had received many such partial payments made before due, and no complaint regarding the same had been made by Bolles. What other inference could be fairly drawn than that such announcement in regard to payment in advance was entirely authorized by Bolles. But,should it be said that the debtors should have still been skeptical touching the authority of Creighton to thus receive paymentsIn advance of maturity, then the oqly course open to them would have been to apply directly to Bolles, in order to ascertain whether he knew of and approved of such action on part of his
agent. Such application was in fact made to Bolles. On the twentyninth of August, 1881, L. P. Hammond & Co., bankers, residing at Guthrie Center, Iowa, wrote to Bolles at Hartford on behalf of one Leander Kennedy, stating that the latter had made certain paym'ents to Creighton on his note and mortgage held by Bolles, but had not received the coupons, and then the letter continues: . "Mr. K. refuses to have any further dealing with said Creighton, and will in the future send all money direct to you from this office. Mr. K. says his next coupon falls due October 1, 1881, at which time he would like to pay $800 receive it, and give proper credit, and stop into or $1,000 on prin. Will on same? Creighton sends out circulars stating that he will take installments on mtgs. you hold, bu t we don't care to'send money to him. Several men have sent him money in this way, and only get his individual recto therefor. Let us know if you will receive the $800 or $1,000 on mtge. or even the whole amt. of mtg. Ans. Do you know anything about the circulars?" On the twenty-first of September, Bolles answered this letter as follows: "HARTFORD, CONN., September 21,1881. "I have been absent for la!lt 2 mOB. I find your letter of August 29th. As to L. Kennedy loan, etc.l refer you to Mr. Creighton. The coupons I have rec'd pay for. I do not want to give up the good loans I have. When it is done, I require for unexpired time diffel'enceof interest. Now, it is 7 per ct. May coupon was paid to me. I notify Creighton. " On the same day Bolles writes to Creighton a lengthy letter about a number of the loans, and then states as follows: "L. P.Hammond letter of August 29th I find here. Asks as to L. P. Kennedy $1,500 loan. Says he has paid you the two last conpon notes in due time for interest, .but has not rec'd them, and that Kennedy refuses further dealing with you, and wants to pay to Hammond the October payt. of coupon. Also he would like to pay $800 or $1,000, or all on the principal, and stop into etc. ·Creighton sends out circulars stating that he will take installments on mortgage, but we don't care to send money to him, money in this way, and only get receipt.' So he writes, and I notify him by card to apply to you fot answer, and say coupons are paid and given up. Next, is your banker Jas. F. Joy. August 26th, he wants, as to Jno. W. Crippens, $900 to payoff his loan if I will take it, provided he will pay difference in interest between what it is, and what can get for unexpired time. I card him, and refer to you." Thus it appears when parties, being doubtful as to Creighton's action and authority in the premises, call Bolles' attention to the issuance of the circulars in regard to receiving payment by installments, he takes no exception thereto, and in addressing Creighton he does not signify any disapproval of such action. Furthermore, when asked the specific question whether he will receive payment in advance of the maturity of the principal, he refers the parties to Creighton; thus showing that this matter wae confided to Creighton's judgment and decision. No other conclusion can be fairly drawn from the evidence than that Creighton had -authority from Bolles to receive payment in advance of maturity and by installments, and hence payments thus made to him must be held to have been made by authority of Bolles, and when made they discharged so much of the debt due Bolles.
SECURITY CO. 'V. RICHARDSON.
Counsel for c;mplainant cite many authorities in support of the proposition that "the possession of negotiable paper is regarded as indispensable evidence of the authority.to receive payment thereof;" and that as Bolles retained usually the possession of the coupons and notes until the money reached him, it follows that Creighton was not auth0rized by him to receive payment; and that, when he did so demand and receive payment, he was really acting on behalf of the debtors, as the conduit by means of which they forwarded the money due to Bolles. It certainly cannot be true that the only legal evidence of the authority to receive payment of negotiable paper is the possession thereof. The weight to be given to the possession, or lack of possession, of negotiable paper, depends upon the filets of each particular case, and the special issue involved. Had Bolles, for instance, written to the defendant, telling him that he had appointed Creighton his agent to collect and receive all moneys coming to him on his Iowa investments, and that he should pay the mortgage debt to Creighton, and that, upon such payment being and satisfaction made, he (Bolles) would forward the notes, piece, would not the defendant have been entirely justified in making payment to Creighton, even though the note and mortgage were not in Creighton's hands at the time? In effect, this is exactly what Bolles, by his course of'dealing with Creighton, did represent to the defendant and all others iJ;ldebted to him in Iowa on loans made through the agency of Creighton. The evidence conclusively shows that Bolles had constituted Creighton his agent; that he expected him to look after his interests in all matters connected with the loans made; that he authorized him to collect the moneys due, both interest and principal; that he expected the moneys to be paid to Creighton before the latter had in his possession the negotiable paper involved; that innumerable payments were in fact thus made, and such payments were in all instances approved by Bolles; that he knew that Creighton had announced by circular that he was ready to receive payment 1:')' installments on the principal of the mortgages due Bolles,and that he took no exception thereto, but in fact approved and confirmed the action of his agent in this particular. Under such circumstances, it is useless to urge that the protection accorded to negotiable paper on grounds of public policy and convenience requires the court to hold that the consequences of the rascality of Creighton should be visited upon the d,ebtor, rather than upon the creditor, who placed it in his power to commit the wrongs whose consequences must be borne by some one. There is no question in the case arising out of the law of negotiable paper. The issue is between the original creditor and debtor, and it turns upon the question whether Bolles did or did not constitute Creighton his agent, with authority to receive payment in his behalf of the sums due him. The evidence shows that such agency and authority existed, and hence it follows that the mortgage debt in question was fully discharged by the payments made to Creighton, and hence the bill must be dismissed on the merits, at cost of complfdnant.
· I," '
SECURITY CO. 'V. CHRISTY
(Olrcnit Oourt, S. D. Iowa,
·December 12, 1887.)
Ka1ftrm,an & Guernsey, for complainant. Phillip's & Day, for defenqants.
Bill for Foreplosure of Mortgage.
SHffi.AS, J. 'rhe bill in this cause was filed for the purpose of foreclosing a mortgageexecuted by William Christy to William Bolles to secure the payment of the sum of $4,000, payable November 1, 1884. In 1881, after the execution of the mortgage, Christy sold the land to one Couch, who is made a defendant. At different times payments of amOlmts sufficient in the aggregate to discharge the m,ortgagedebt were made by Christy &; Couch to H. R. Creighton, of Des Moines; the same being made before the date of the maturityof the loan. The conclusions reached in the case of SeCUl'ity Co. v. Richardson, ante. 16. are decisive of this cause. The ,Security Company does not claim to be the beneficial owner of the note and mortgage. It is merely a trustee for William Bolles. ' The evidence shows. as, is held in the Richardson Case, that Bolles had constituted H. R. Creighton his agent in Iowa. with authority to collect the amounts due him and to receive payment thereon before. as well as after. maturity. The payments jllade to Creighton were therefore, in effect. made to Bolles, and hence. when ,this suit was brought. there was nothing due complainant or William Bolles. Decree must therefore be fOl' dismissal of bill on the merits. at cost of complainant!
(Oircuit Oourt, N.
fllz'noia. December 20,1887.)
LIMITATION OFACTIONS-BANKRUPTCY-SUSPENSION OF RIGHT OF ACTION.
Defendants were adjudged bankrupts in 1874, and plaintiffs proved their claims against them. A discharge was denied defendants in 1882. To an action brought by plaintiffs in 1887 to enforce their claims, defendants pleaded the limitation of 10 years. Rev. St.' Ill. c. 83, 23, provides that, when an action is stayed by statutory prohibition, such time is not part of the time limited for the commencement of actions, and. Rev. St. U. S. 5105, prohibits a creditor who has proved his claim to maintain suit pending the proceedings in bankruptcy, and provides that such ,creditor shall not be held. to have waived his right .of action "where a discharge has been refused, or the bankruptcy proceedings determined without .a discharge." Held. that plaintiffs were entitled to maintain their action against defendants.
L: H. BOttteU;for plaintiffs. Moses '& Newman', for defendants.
BLODGETT, J. This is a demurrer to plaintiffs' second replication to defendants'third plea. ·TM third plea is that the causes of action, set out in the second, third, and ninth counts of the declaration did not ao-