Jenkins v. Shinn

18 S.W. 240, 55 Ark. 347, 1892 Ark. LEXIS 20

• Court: Supreme Court of Arkansas
• Decided: January 23, 1892
• Status: Published

Opinion

Cockrill, C. J.

1. Towhoma negotiable note The only legitimate issue in this case was whether Jenkins, the indorsee and holder of the tiable note, had authorized Dickerman, the payee, to collect it for him from Shinn, the maker. Shinn thought Dicker-man was the holder of the note and paid him, without requiring its surrender or inquiring whether it had been negotiated. There is no evidence in the record from which the jury could have inferred that Jenkins had anything to do with bringing about that belief. The doctrine of estoppel had no place therefore in the case. It was simply a question of agency or no agency. If Dickerman was authorized to receive the money from Shinn as Jenkins’ agent without a surrender of the note, then Jenkins must be defeated, because he has already received payment through his agent. But if Dickerman was not his agent in fact to receive payment, there is nothing in the record to estop him from asserting and proving the fact. All the court’s instructions upon the doctrine of estoppel were therefore erroneous.

In this category also is that part of the charge which tells the jury that if Jenkins “ knowingly permitted Dickerman to negotiate a discount of the note with Shinn,” he is bound by D.ickerman’s action and cannot recover. Dickerman was indebted to Jenkins in an amount less than the face of Shinn’s note, which Jenkins held as collateral security. If Dickerman could induce Shinn to pay his (Dickerman’s). debt to Jenkins before the Shinn note was due, upon terms-that were advantageous to Shinn, it was not the duty or the right of Jenkins to interfere, for he was bound to surrender the collateral when the debt due him was paid. He could leave Dickerman and Shinn, therefore, to their negotiation without imperilling his own rights, so long as he did nothing to lead Shinn to believe that he could discharge his note by payment to Dickerman.

2. Wr contract-evidence. ¡tten - 1 Shinn makes no claim that he was misled by Jenkins. He paid the money to Dickerman therefore at his peril, and must stand the loss unless he can show that Dickerman was in fact authorized to receive the money for Jenkins in discharge of the note. When the note was indorsed to Jenkins'by Dickerman, Jenkins executed a writing to Dicker-man attesting that the note was assigned to him as collateral security. Shinn offered to prove by Dickerman that, at the time this writing was executed, it was understood between him and Jenkins that the latter was only (o hold the note, and was to have no authority to collect it. The court admitted the testimony. That was error. The legal import of the contract was to confer upon Jenkins authority to collect the note. But the rule which prohibits a party from contradicting the terms of a written contract by parol evidence of a different understanding or intent, entertained at the time the writing was executed, precludes the' varying of its-legal import by the like evidence. Richie v. Frazer, 50 Ark., 393. In a suit between Jenkins and Dickerman, the parol evidence offered would have been incompetent. But Shinn’s right to discharge the note by payment to Dickerman is dependent upon Dickerman’s right to receive payment, and that, on this phase of the case, is controlled by the terms of his assignment of the note. Shinn then, in effect, claims under Dickerman, and derives his right from Dickerman’s contract of assignment. -He is, therefore, bound by its terms, j’ust as Dickerman is. Langdon v. Langdon, 4 Gray, 186. It was, then, incompetent for Shinn to prove by parol that the written contract did not mean what the law implies from its terms.

But it was competent for Shinn to show that Jenkins had in fact constituted Dickerman his agent to collect the note for him, even by a parol agreement contemporaneous with the written contract of assignment, for the fact of agency is collateral to and not a contradiction of the terms of the writing. Evidence to that effect would not affect the writing as a contract, but would only show that Jenkins had appointed another to do for him what the contract authorized him to do. As the appointment of the agent carried no interest with it, it was revocable at will. But Dickerman’s contention as to the understanding between him and Jenkins would, if it prevailed, abrogate the contract of assignment, for it would lead to this: Jenkins, not being authorized to collect the note, could not prosecute the present suit if the note were unpaid, because the object of the suit is collection.

For the errors indicated the judgment must be reversed, and the cause remanded for a new trial.

It is so ordered.