Childers v. Bowen & Walthall , 68 Ala. 221 ( 1880 )

STONE, J.

For a proper determination of this case, it is only necessary that we go back to the time when the money sued for was deposited with Bowen & Walthall. It is not denied, and, under the evidence, can not be denied, that the money deposited was the property of the plaintiff, Childers, and that Bowen & Walthall knew it. They received the money, or, rather, the right to use it, from Tate, the agent of Childers, but they received it as Childers’ money. Tate, the agent, had, the year before, lent the money to Mason, acting in the matter as the agent of Childers ; and the money was repaid to him through Bowen & Walthall. They knew the consideration of the indebtedness — knew it belonged to Chil-ders, and knew that in the loan and collection Tate was acting only as the agent of Childers. This being the ease, no matter how general or large the powers of Tate may have been, they were only the powers of an agent, and conferred on him no ownership in the money. His powers, in the absence of express authority therefor, were to employ the money for the benefit of his principal, not for his own use or benefit. He could, as the testimony tends strongly to show, lend the money, or employ it in purchasing supplies for his principal. He could collect, and effect a further loan, if necessary. ■ But, as general agent, without express authority from his principal, he could not extinguish or absorb the debt, in the purchase of supplies for his own consumption. This, on his part, would be a violation of the trust and confidence repared in him; and parties dealing with him, knowing the ownership of the money, and his relations to it, became participants in his breach of duty, and must make good his default, which they have thus aided in creating.

Tate held the money in trust for Childers, and when he employed it for his own private purposes, he committed a breach of the trust; and when Bowen & Walthall, with knowledge of the trust, aided him in the breach, and thus appropriated the trust money, they placed themselves in Tate’s shoes — made themselves trustees in invitum, and an action for money had and received will lie against them. Swoope v. Trotter, 4 Por. 27; Van Hoose v. Bush, 54 Ala. 342; Shelton v. Carpenter, 60 Ala. 201; Perry on Trusts, § 225; Story on Agency, §§ 127, 228; Story’s Eq. Jur. §§ 422, 423, 533, 1257, 1258, 1261 c, 1261 d; Gullett v. Lewis, 3 Stew. 23; Craig v. Ely, 5 St. & Por. 354; Cost v. Genette, 1 Por. 212; Cook v. Bloodgood, 7 Ala. 683.

What we have said above, must be confined to the facts shown in this record. If Childers authorized Tate to use this money in the purchase of supplies for himself, or if, with knowledge he was so using it, he ratified such use, then he can not recover. Of course, proper purchases made for Childers were rightful, and defendants are entitled to a credit therefor.

Beversed and remanded.