Opinion
8 Div. 21.
November 15, 1917.
Appeal from Circuit Court, Madison County; R. C. Brickell, Judge.
Betts Betts and W. F. Esslinger, all of Huntsville, for appellant. Blanton Ford and Lanier Pride, all of Huntsville, for appellees.
It is without dispute that the mortgagors (respondents to this bill) had paid to one Turner Petty, an attorney at Huntsville, Ala., a sufficient sum to discharge the entire mortgage indebtedness prior to the filing of the bill in this cause. The sole question therefore for determination is the sufficiency of the evidence to justify the conclusion that said Petty, as the agent for the mortgagee, acted within the scope of his authority in collecting the amount due on the mortgage.
The loan was made in September, 1911. The mortgagors applied for a loan to said Petty, who informed them that the money could be obtained from the complainant, Mrs. Mary F. Thompson, and that 5 per cent. would be retained from the loan as attorney's fees in payment for getting up the abstract. Petty attended to the entire matter, and the loan was consummated through him, the mortgagors having no communication whatever with the complainant, and, indeed, never having known her.
The property was insured with the loss payable clause to complainant, and Petty retained in his possession the insurance policy. Several interest payments were made by the mortgagors, as are shown in the foregoing statement of the case, each of which was made direct to said Petty by the mortgagors.
The commission paid to Petty out of the loan for negotiating the same was paid for fixing the papers and the abstract, and nothing more. The respondent testified further that at the time of making payments to the said Petty he was not in their employ as their attorney or agent. The note executed by the mortgagors shows that the same was payable at the law office of the said Petty, and on January 31, 1914, the mortgagors there paid to said Petty the sum of $464.25, which was in full payment of the balance due thereon.
On August 1, 1912, the complainant executed a power of attorney to said Petty, which is set out in the statement of the case. It is insisted on the part of counsel for complainant that powers of attorney are ordinarily subjected to strict construction (Scarborough v. Reynolds, 12 Ala. 252; Brantley v. So. L. I. Co., 53 Ala. 554), and that the power of attorney here in question should be construed as limiting the authority of said Petty to the collection of only those mortgages which she had delivered to him, and for which he had executed to her his receipt. This power of attorney, however, should be construed in the light of surrounding circumstances. As said by the court in Brantley v. So. L. I. Co., supra:
"All contracts must be read in the light of surrounding circumstances, the occasion which gave rise to them, the relative position of the parties, and their obvious design as to the objects to be accomplished must be looked at, in order to arrive at their true meaning, and to enable the court to carry out the intention of the parties."
A careful reading of this power of attorney will disclose that it contains language sufficiently broad and comprehensive to confer upon said Petty the authority exercised by him in the instant case, especially so when viewed in the light of surrounding circumstances.
Numerous instances of the exercise of this power of attorney by Petty are shown by the satisfaction of records of several mortgages executed to the complainant with special reference to the power of attorney for his authority in so doing, all of which appear in the statement of the case. The fact of agency being established, these acts on his part were therefore admissible, although concerning other transactions.
"Acts and declarations of one whose agency is the subject of inquiry, though incompetent when there is no other evidence of agency or of ratification, become competent for consideration in determining both the fact of agency and the scope of authority originally given, when shown in connection with other evidence of agency. McClung v. Spotswood, 19 Ala. 165. And in such connection circumstances and transactions which have no direct connection with the issues tried may be considered when they are such as illustrate the general nature of the business intrusted to the agent. Lytle v. Bank, 121 Ala. 215 [26 So. 6] ; U.S. L. I. Co. v. Lesser, 126 Ala. 568 [28 So. 646]." Birmingham Min. R. R. Co. v. Tenn. C., I. R. R. Co. et al., 127 Ala. 145, 28 So. 679.
It was also shown by the respondents that in December, 1912, one Campbell applied to complainant for a loan of money, to which she replied that "she did not know whether she had the money or not; to see Lawyer Petty; he was her lawyer and attended to her business; if he could get the money from him, it was all right; so he went to see him and got the money." This witness also testified that complainant told him Petty usually charged $25, which was paid by the applicant for the loan, but that she would see that he only charged him $5, and this was the amount which he paid.
At the time of paying the balance due in full on said mortgage the mortgagors received a receipt from said Petty, but did not obtain possession of their note and mortgage, the latter telling them to come down in a day or two, and he would go to the courthouse and mark the same satisfied and turn over to them their note. Petty subsequently left the country, and the mortgagors obtained their first information that complainant claimed her mortgage was not paid in August or September, 1916, about two months after Petty absconded.
Appellant's counsel insists that the mortgagors are not protected in the payment of the mortgage indebtedness to said Petty, for the reason that it does not appear that he had in his custody at the time the original note and mortgage, citing Hughes v. Clifton, 147 Ala. 531, 41 So. 998; Smith v. Kidd, 68 N.Y. 130, 23 Am. Rep. 157. The rule, however, recognized in these cases, has no application to cases in which it appears that the agent has actual authority to receive the payment without possession of the securities. 31 Cyc. 1772.
In the instant case we are persuaded, after a careful review of all the evidence, that in this particular transaction Petty was acting within the scope of his authority in the collection of the amount due on this mortgage indebtedness, whether he had actual possession of the note and mortgage at the time or not.
We therefore conclude that the decree of the court below in dismissing the bill is correct, and the same will accordingly be affirmed.
Affirmed.
ANDERSON, C. J., and McCLELLAN and SAYRE, JJ., concur.