Mr. Justice Waterman
delivered the opinion of the Court.
An agent intrusted with, and in possession of a negotiable or other instrument, is deemed by the fact of such possession to be authorized to receive payment of the instrument in accordance with its terms, when and after it became due, and not before.
The Supreme Court of this State in Thompson v. Elliott, 73 Ill. 221, says: “And it is further laid down by the authorities, that an agent, intrusted to receive payment of a negotiable or other instrument, is ordinarily deemed entitled to receive it only when and after it becomes due, and not before it becomes due; but if there be a known usage of trade or course of business in a particular employment, or habit of dealing between the parties, extending the ordinary reach of the authority, that may well be held to give full validity to the act.” Story on Agency, Sec, 98; Paley on Agency, by Lloyd, 290, 291.
The presumed authority of the ágentín such case is to receive payment of the instrument when or after it is due, in accordance with its terms, and is not to receive in satisfaction thereof anything except what the instrument calls for. Padfield v. Green, 85 Ill. 529; Am. & Eng. Ency. of Law, Vol. 18, 198; Keohane v. Smith, 97 Ill. 156; Doubleday v. Kress, 50 N. Y. 410; Crane v. Gruenwald, 120 N. Y. 274.
It is urged by appellee that Griggs was the general agent of appellant, and that therefore he is to be presumed to have had authority to do what he did, viz., receive upon a note of appellant, before it was due, an amount of money in satisfaction thereof not equal to what the note called for when due, and for such less sum to surrender said note to the makers thereof.
A general agent is one authorized to transact all business of a particular kind; or a general agency may be stated to be an authority to act in a certain character; and a special agent has an authority to do a particular act. Ewell’s Evans on Agency, pp. 1 and 135.
The distinction drawn in Paley on Agency is, that the authority is general or special with reference to its subject, that is, according as it is confined to a single act, or is extended to all acts connected with a particular employment.
Story, in his work upon Agency, adopts the same distinction.
The question whether Griggs is to be termed a special or general agent, is not of so much consequence, as is what it was he was authorized to do. The master to whom this cause was submitted, found as a matter of fact, and as reported to the chancellor, that Griggs had no actual authority from Lawther, the owner of the note to collect it before it became due.
The testimony before the master consisted very largely of the oral statements of witnesses made in his presence; he alone of all who have judicially passed upon this case saw and heard the witnesses; he, therefore, was in a better position to determine the truth in respect to this matter, than was the chancellor or is this court. Under such circumstances the finding and report of the master is not to be set aside, either by the chancellor or this court, unless from a reading of the evidence upon which the master acted, it is clear he was mistaken and has come to an erroneous conclusion upon the facts. Daniel’s Ch. Pr., 1299, note 5; Izard v. Bodine, 1 Stock. 9, N. J. Equity 309; Sinnickson v. Bruere, 9 N. J. 659; Howard v. Scott, 50 Vt. 48; Herrick v. Lynch, 49 Ill. App. 657; Williams v. Lindblom, Ill. Opinion Nov. 9, 1896.
After a careful examination of the evidence, we are unable so to say, and we think that the conclusions of the master as to the facts should have been sustained by the chancellor, and must be by this court.
The evidence does not warrant the conclusion that in respect to loaning money and receiving payment therefor, Griggs was authorized to stand in the place of his principal; nor does the character and relation of the parties warrant such an inference.
Lawther, a man of means, desired to loan his money upon satisfactory real estate security; his interests lay in keeping his money well loaned out, and not in abating interest and receiving payment on obligations running to him, before they became due. It is well known that investors, as a rule, dislike to change securities; the longer any security has stood fulfilling the purpose for which it was made, without flaw discovered in, or attack made thereon, and with prompt payment of interest secured thereby, the stronger becomes the presumption that it is flawless. To abate interest and surrender such security before it becomes due, involves the trouble and risk of obtaining a new and equally valid pledge, and is, as we have before stated, a thing which, as a rule, investors are exceedingly loth to do.
It is urged that the conduct of appellant in respect to his dealings with Griggs was such that appellees had a right to presume that Griggs was authorized to receive payment of the note in question before it became due. It does not appear that appellees, the Waites, when they paid this note, were aware of any of-the acts which, they now insist, raised such presumption. Where the fact of authority does not exist, one can not be heard to say that transactions of which he was not aware when he assumed the existence of such authority, justified him in such assumption. Moreover, in the present case, appellees, the Waites, did not, when they gave to Griggs in satisfaction of their note, before it became due, a less amount than the note called for, act upon any presumption induced by anything that appellant had done, that Griggs was authorized to so i’eceive payment of said note; on the contrary, it in this case by stipulation appears that Hr. Waite went to Grigg’s office in December, 1892, and asked Griggs if Lawther was willing that this loan should be paid before maturity, and that Griggs said he would write to Lawther and ascertain. And that subsequently Griggs reported to Mr. Waite that he had ascertained from Lawther that Lawther was willing that the loan should be paid off before maturity.
Griggs did not write to Lawther as he said he would, and never did ascertain from his principal that he, Lawther, was willing the loan should be paid off before maturity. In respect to this, Griggs told to Mr. Waite a falsehood, and appellees relied upon an untruthful statement by Griggs; for their assurance that Lawther was willing that they should pay off their note before it became due, they had merely the misrepresentation of Griggs. The application to, and representation by Griggs, they have pleaded in their answer and stipulated in the record, an application and a representation upon which they relied, and which appellant was in no way responsible for. With reference to this, the remarks of the court in Doubleday v. Kress, 50 N. Y., page 410, as well as those in Crane v. Gruenwald, 120 N. Y. 274, are applicable. From this application by Waite and representation by Griggs, it appears that Griggs himself considered that he had not authority to receive payment upon this note before its maturity. He made no pretense of having any such authority—recognized the necessity of special directions in this regard, which special authority he afterward falsely assured appellees he had obtained.
Appellees urge that Griggs received money on loans before maturity, at his own discretion. In support of this they call attention to the testimony of Mr. Lawther.
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Mr. Justice Waterman
delivered the opinion of the Court.
An agent intrusted with, and in possession of a negotiable or other instrument, is deemed by the fact of such possession to be authorized to receive payment of the instrument in accordance with its terms, when and after it became due, and not before.
The Supreme Court of this State in Thompson v. Elliott, 73 Ill. 221, says: “And it is further laid down by the authorities, that an agent, intrusted to receive payment of a negotiable or other instrument, is ordinarily deemed entitled to receive it only when and after it becomes due, and not before it becomes due; but if there be a known usage of trade or course of business in a particular employment, or habit of dealing between the parties, extending the ordinary reach of the authority, that may well be held to give full validity to the act.” Story on Agency, Sec, 98; Paley on Agency, by Lloyd, 290, 291.
The presumed authority of the ágentín such case is to receive payment of the instrument when or after it is due, in accordance with its terms, and is not to receive in satisfaction thereof anything except what the instrument calls for. Padfield v. Green, 85 Ill. 529; Am. & Eng. Ency. of Law, Vol. 18, 198; Keohane v. Smith, 97 Ill. 156; Doubleday v. Kress, 50 N. Y. 410; Crane v. Gruenwald, 120 N. Y. 274.
It is urged by appellee that Griggs was the general agent of appellant, and that therefore he is to be presumed to have had authority to do what he did, viz., receive upon a note of appellant, before it was due, an amount of money in satisfaction thereof not equal to what the note called for when due, and for such less sum to surrender said note to the makers thereof.
A general agent is one authorized to transact all business of a particular kind; or a general agency may be stated to be an authority to act in a certain character; and a special agent has an authority to do a particular act. Ewell’s Evans on Agency, pp. 1 and 135.
The distinction drawn in Paley on Agency is, that the authority is general or special with reference to its subject, that is, according as it is confined to a single act, or is extended to all acts connected with a particular employment.
Story, in his work upon Agency, adopts the same distinction.
The question whether Griggs is to be termed a special or general agent, is not of so much consequence, as is what it was he was authorized to do. The master to whom this cause was submitted, found as a matter of fact, and as reported to the chancellor, that Griggs had no actual authority from Lawther, the owner of the note to collect it before it became due.
The testimony before the master consisted very largely of the oral statements of witnesses made in his presence; he alone of all who have judicially passed upon this case saw and heard the witnesses; he, therefore, was in a better position to determine the truth in respect to this matter, than was the chancellor or is this court. Under such circumstances the finding and report of the master is not to be set aside, either by the chancellor or this court, unless from a reading of the evidence upon which the master acted, it is clear he was mistaken and has come to an erroneous conclusion upon the facts. Daniel’s Ch. Pr., 1299, note 5; Izard v. Bodine, 1 Stock. 9, N. J. Equity 309; Sinnickson v. Bruere, 9 N. J. 659; Howard v. Scott, 50 Vt. 48; Herrick v. Lynch, 49 Ill. App. 657; Williams v. Lindblom, Ill. Opinion Nov. 9, 1896.
After a careful examination of the evidence, we are unable so to say, and we think that the conclusions of the master as to the facts should have been sustained by the chancellor, and must be by this court.
The evidence does not warrant the conclusion that in respect to loaning money and receiving payment therefor, Griggs was authorized to stand in the place of his principal; nor does the character and relation of the parties warrant such an inference.
Lawther, a man of means, desired to loan his money upon satisfactory real estate security; his interests lay in keeping his money well loaned out, and not in abating interest and receiving payment on obligations running to him, before they became due. It is well known that investors, as a rule, dislike to change securities; the longer any security has stood fulfilling the purpose for which it was made, without flaw discovered in, or attack made thereon, and with prompt payment of interest secured thereby, the stronger becomes the presumption that it is flawless. To abate interest and surrender such security before it becomes due, involves the trouble and risk of obtaining a new and equally valid pledge, and is, as we have before stated, a thing which, as a rule, investors are exceedingly loth to do.
It is urged that the conduct of appellant in respect to his dealings with Griggs was such that appellees had a right to presume that Griggs was authorized to receive payment of the note in question before it became due. It does not appear that appellees, the Waites, when they paid this note, were aware of any of-the acts which, they now insist, raised such presumption. Where the fact of authority does not exist, one can not be heard to say that transactions of which he was not aware when he assumed the existence of such authority, justified him in such assumption. Moreover, in the present case, appellees, the Waites, did not, when they gave to Griggs in satisfaction of their note, before it became due, a less amount than the note called for, act upon any presumption induced by anything that appellant had done, that Griggs was authorized to so i’eceive payment of said note; on the contrary, it in this case by stipulation appears that Hr. Waite went to Grigg’s office in December, 1892, and asked Griggs if Lawther was willing that this loan should be paid before maturity, and that Griggs said he would write to Lawther and ascertain. And that subsequently Griggs reported to Mr. Waite that he had ascertained from Lawther that Lawther was willing that the loan should be paid off before maturity.
Griggs did not write to Lawther as he said he would, and never did ascertain from his principal that he, Lawther, was willing the loan should be paid off before maturity. In respect to this, Griggs told to Mr. Waite a falsehood, and appellees relied upon an untruthful statement by Griggs; for their assurance that Lawther was willing that they should pay off their note before it became due, they had merely the misrepresentation of Griggs. The application to, and representation by Griggs, they have pleaded in their answer and stipulated in the record, an application and a representation upon which they relied, and which appellant was in no way responsible for. With reference to this, the remarks of the court in Doubleday v. Kress, 50 N. Y., page 410, as well as those in Crane v. Gruenwald, 120 N. Y. 274, are applicable. From this application by Waite and representation by Griggs, it appears that Griggs himself considered that he had not authority to receive payment upon this note before its maturity. He made no pretense of having any such authority—recognized the necessity of special directions in this regard, which special authority he afterward falsely assured appellees he had obtained.
Appellees urge that Griggs received money on loans before maturity, at his own discretion. In support of this they call attention to the testimony of Mr. Lawther. “ From my own investigation and investigations of others, I believe that Griggs did collect money before maturity. I acquired that knowledge since his death.”
It is too patent for discussion that Mr. Lawther was not, is not, and, in the nature of things, could not be, an expert as to what Griggs did in the collection of money upon loans made by appellant, and that the belief of the witness in the premises is of no consequence.
As to the representation of Griggs upon behalf of Lawther, of payment of sums before maturity or the ratification by Lawther of any such action, the master reports that it appeared that in only two instances had Griggs received payments of sums before maturity, and that one of these was received only one day before maturity, and that the day' of its regular maturity wTas Sunday, and the master further reports-as follows : “ Suffice it to say that I do not believe that upon the whole record there is sufficient proof of facts from which a general authority in Griggs to collect before maturity, can reasonably be inferred.”
The note made by appellees, the Waites, payable to the order of appellant, was due March 3, 1393, and, according to its terms, upon that date it called for $3,090. This note was, by appellant, placed in the hands of Griggs, it must be presumed, that its terms might be carried out. It will hardly be claimed that, without express authority, Griggs, from the mere possession of the note, wras authorized to receive payment of it in any other way than in accordance with its terms; yet, on December 20, 1892, he assumed to receive, in satisfaction thereof, the sum of $3,077. Appellees, in paying this amount to Griggs, well knew that they did not pay as they, by the terms of their note, had undertaken; that a reduction from what the note called for was made to them. They assumed that what Griggs said in respect to his authority concerning this note was true; it turns out that it was false.
We have been referred to no authority, and we are not aware of any, holding that from the mere. possession of a promissory note, an agent may be presumed to be authorized to abate anything therefrom. Even in the case of Emery v. Gordon, 33 N. J. Eq. 447, to which we have been referred, the remarks of the chancellor, which we do not think are in accordance with the decisions of the Supreme Court of this State, do not go to the extent of sustaining the position now insisted upon by the makers of this note.
It is also urged by appellees, the makers of this note, that, although Margaret Y. Waite borrowed this money from the appellant, Lawther, and gave to him her promissory note therefor, as a principal, yet, afterward, as between Lawther and Margaret Y. Waite, now Mrs. Thornton, she became and was a mere surety, by virtue of her having sold and conveyed the land to Lucy C. Waite, now Mrs. Eobinson, which she mortgaged to secure the note she gave for the money she borrowed from appellant.
W e do not think that by such conveyance and the undertaking by Lucy C. Waite to pay the debt of Margaret, Margaret, as regards her relation to appellant, became a mere surety; nor does it appear that appellant has done anything by which his rights against Margaret, the primary and principal debtor to him, have been lost or prejudiced. As to this, the case of Fish v. Glover, 154 Ill. 85, is instructive.
The master found, as a matter of law, that, as a consequence of the execution by the trustee of a release of the mortgage made by the Waites, such mortgage must be regarded as now secondary to the incumbrance which was given to the insurance company to secure a loan made by it upon the strength of such release and record. It appears by the testimony of Mr. Prindiville, the agent of the insurance company, who made the loan for it, he was aware that appellant’s mortgage had been made and placed upon record. The mortgage of the insurance company was recorded December 16, 1S92. The release of appellant’s mortgage, executed by Griggs, bears date December 20, 1892. Mr. Prindiville further testifies : “ The money on the loan” (meaning the loan made by the insurance company), “ was paid subsequent to December 16, 1892, when the release of the former incumbrance and the canceled trust deed and notes were in my possession.”
Across the face of the $3,000 note, payable by appellees, the Waites, to Lawther, when it was, before the making of this loan, delivered to the insurance company, was written: “Paid December 20, 1892. A. B. Lawther, per C. W. Griggs"
Across the face of the trust deed securing said note, were written these words: “ Indebtedness paid and released, this 20th December, 1892. Charles W. Griggs, trustee.”
The insurance company was thus, before it made its loan, informed by its possession of appellant’s note, that the same was not due until March 3, 1893, and that Griggs had assumed to receive payment thereof December 20, 1892. It was therefore incumbent upon the insurance company to ascertain whether Griggs was authorized to receive payment of this note, and to release the security therefor given, three months before it became due. The insurance company thus knew that when it made its loan, the note given to appellant and the mortgage securing the same had then nearly three months to run. The insurance company, without inquiry, assumed that Griggs was authorized to do what he had done; it now appears that he was not so authorized. We are therefore of the opinion, in accordance with the holding of the Supreme Court in Keohane v. Smith, 97 Ill. 156, that the incumbrance of the insurance company is subordinate to the claim of appellant.
Our finding in this regard is not in opposition to any conclusion or finding of fact by the master; it is merely a dissent from his conclusion as to a matter of law.
The judgment of the Superior Court is reversed, and the cause remanded to that court with directions to add to the sum found by the master to be due upon appellant’s note the interest that has since accrued upon the principal thereof, and award to him a decree for the foreclosure of his mortgage, not inconsistent with this opinion.