
    Friend vs. Yahr, Appellant, and Bowes and another, Executors, Respondents. Friend, Appellant, vs. Ward and others, Respondents.
    
      October 4
    
    December 12, 1905.
    
    (1-3) Alteration of instruments: -Filling blanks after delivery: Re-execution. (4-12) Mortgages: Payment: Satisfaction: Validity of assignments: Bona fides: Reliance upon record: Payments to agent: Validity: Misappropriation of moneys by agent.
    
    1. A person having executed an instrument, leaving blank spaces therein to he filled, and delivered the same in such imperfect condition to another for use, the presumption is, nothing appearing to the contrary, that such person intended to confer upon such other authority to complete the instrument.
    
      2. The rule above stated applies to instruments required by law to be executed under seal and to be witnessed and acknowledged in order to entitle the same to be recorded, as well as to simple contracts.
    
      3. In case of implied authority, in the circumstances stated in the foregoing propositions, being performed the instrument does not require re-execution or acknowledgment to give it full validity.
    4. Payment of an indebtedness on a note secured by a mortgage on real estate extinguishes the mortgage lien without any satisfaction thereof of record or in writing.
    6.A mortgage having been extinguished by payment of the indebtedness, it is not necessary to valid record evidence thereof that a satisfaction piece shall be executed by the actual or apparent owner of such indebtedness for delivery to the mortgagor, or that there should be such delivery.
    6. If a person, acting for himself or another, for value acquires a promissory note before maturity, secured by a mortgage upon real estate, taking the title to such mortgage in the name of- another by his consent, evinced by a general power of attorney, but without his knowledge as to the particular transaction, and thereafter such other by consent of such third person, evinced by such power of attorney, but without his knowledge as to the particular transaction, assigns his security in writing to a fourth person, the assignment being neither witnessed nor acknowledged, the dona fides of the transaction as to the latter or as to such first person is not affected by the mere use of the third person’s name as assignee and subsequently as assignor, nor by the fact that he was not pecuniarily interested in the transaction, nor by the circumstance that the second instrument of assignment was not so executed as to be entitled to-record.
    7. In the circumstances above stated the final holder of the legal title to the security can rely on the dona fieles of the transaction between the vendor and the person dealing with him in the first transaction.
    8. A person in dealing with another in respect to real estate may rely upon the record title to the property in the absence of actual knowledge of the title in fact, or of facts sufficient to put him on inquiry in respect thereto. .
    9. A person in taking a mortgage on real estate may rely on the record of a satisfaction by the record owner of a prior mortgage on the same property in the absence of knowledge, actual or constructive, of the ownership of such prior mortgage by some other person than such owner.
    10. The record of a mortgage affords constructive notice only of its existence and ownership thereof by the mortgagee named therein, not of the assignment of such mortgage to another.
    11. A person in possession of a note belonging to another, secured by a mortgage upon real estate, with authority to collect the same cannot rightfully accept in payment anything but money. Nevertheless if such person takes from the mortgagor a new mort-gage on the real estate covered hy the first mortgage for the purpose of providing means with which to pay off the latter, and thereafter by the use of such second mortgage he acquires such means before his agency to collect is terminated, such authority is thereby executed and the first mortgage indebtedness and lien extinguished.
    12. If a person intrusted with authority to collect a mortgage indebtedness enters upon the execution of such authority and continues efforts in that regard until he obtains the necessary money therefor, nothing appearing to the contrary, the agency to collect and possession of the securities by the agent is to be presumed to continue correspondingly, and the legal effect of obtaining the money is the extinguishment 'of the note and mortgage, regardless of whether such money in due course, or otherwise, reaches the rightful owner.
    [Syllabus by Mabshall, J.]
    Appeals from a judgment of the circuit court for Milwaukee county: Oreen T. Williams, Circuit Judge.
    
      Reversed.
    
    Action to foreclose a mortgage. The complaint was in the usual form. Defendants Thomas H. Bowes and Mary Kurtz, as executors of the last will of J ames Lawrie, deceased, pleaded ownership of a note for $1,600, secured hy a mortgage on the premises described in the complaint, given to their testator in his lifetime by defendants Francis Ward and Alice Ward, the makers of plaintiff’s mortgage, and that the said mortgage was paramount to that of the plaintiff. They ask for appropriate relief. Defendants Francis Ward and his wife Alice Ward pleaded extinguishment of the" Lawrie mortgage by payment of the indebtedness secured thereby to Henry Herman, as agent for Lawrie in his lifetime. Defendant Yahr pleaded ownership of a $600 note made by said Francis Ward, secured by a mortgage on the premises described in the complaint, executed by said Francis Ward and his wife, and that the same was paramount to the Lawrie mortgage. The facts established by the evidence as found by the trial court, so far as necessary to be stated, are these:
    
      On December 12, 1893, defendants Francis Ward and Alice Ward mortgaged the real estate described in the complaint to Henry Herman to' secure payment in five years of Francis Ward’s note for $1,600 and interest thereon at the rate of seven per cent, per annum, payable semiannually. The mortgage was duly recorded December 16, 1893. January 10, 1894, Herman, for value, in writing assigned the mortgage and indebtedness secured thereby to James Lawrie. The assignment was not recorded till April 23, 1903. The failure in that regard was in accordance with a then existing custom. Interest on said note was duly paid to Lawrie or his agent until 1898. In October, 1902, Lawrie delivered the mortgage, note, and assignment to Henry Herman with instructions to collect. Herman delivered the same to an attorney with instructions to commence foreclosure proceedings but not to file any papers. The attorney did as directed, Lawrie verifying the complaint, and service thereof being duly made in the action. No papers in such action were filed. No bill for legal services was rendered to Lawrie, nor was the latter notified of the termination of the action, which thereafter occurred.
    On November 14, 1902, by previous arrangement, Alice Ward, Ferdinand T. Yahr, and Henry Herman met at the latter’s office. Neither Lawrie nor his attorney knew of such meeting. The amount due on the mortgage indebtedness for interest and unpaid taxes was then determined. An outstanding mortgage for $300 on the premises in question to a corporation represented by Yahr was satisfied, a new note for $1,600, payable in five years with interest at five per cent, per annum, was prepared and a mortgage on such premises to secure the same was signed by Alice Ward. Later in the day the mortgage and note were signed by Francis Ward, and the mortgage was duly witnessed and acknowledged so as to be entitled to record. At this time the Wards were assured that a release of the Lawrie mortgage was ready for delivery and would be recorded witb tbe new mortgage. No release was in fact ready for delivery. Tbe mortgage was duly recorded tbe next day after its execution. At tbe time of making tbe second $1,600 mortgage tbe Wards gave a note for $600, due in five years thereafter witb five per cent, interest per annum, to defendant Yahr, and mortgaged tbe premises .in question to secure payment thereof, tbe same to be subject to tbe $1,600 mortgage. Tbe consideration for tbe Yahr mortgage was tbe satisfaction of tbe $300 mortgage and a loan of $300. At tbe same time tbe Wcurds further mortgaged tbe premises to Herman to secure payment of Francis Ward’s note for $600 given to Herman, which by its terms drew interest at tbe rate of five per cent., per annum and was payable in five years. Thereafter such note and mortgage were duly assigned to defendant Vedder, who is now tbe owner thereof. That note was due at tbe time of tbe commencement of this action. • By agreement witb defendant Yahr bis mortgage was made subject to tbe Vedder mortgage.
    At tbe time of tbe transactions of November 14, 1902, Yahr bad actual notice that Lawrie was tbe assignee of Herman of tbe first $1,600 mortgage, and Vedder bad constructive notice.of such fact. Herman, from tbe time be transferred tbe mortgage to Lawrie till be left tbe country in 1903, knew that tbe mortgage indebtedness bad not been paid and that Lawrie bad never released bis mortgage. As a result of negotiations between Herman and Charles Friend, plaintiff’s son and attorney, between tbe date of tbe second $1,600 mortgage and tbe 24th day of November thereafter, tbe former transferred such mortgage and tbe indebtedness secured thereby, delivering tbe papers to said Friend. In consummating tbe deal Herman delivered witb tbe note and mortgage an assignment executed so as to entitle the same to be recorded, except the' name of tbe assignee was left blank, a satisfaction, in form, of tbe Lawrie mortgage executed by Herman without tbe knowledge of or consent of Lawrie, and an abstract of title showing the first $1,600 mortgage to be unsatisfied of record. In January, 1903, Eriend completed the assignment by writing in the name of A. Gr. Stein, of New York, as assignee. Neither Stein, Herman, nor Lawrie knew of this. Eriend acted for Stein under a duly recorded power of attorney authorizing him to do such business. Before the commencement of this action Friend, under such power, assigned the securities acquired by him as aforesaid to the plaintiff, though the assignment was not executed so as to be entitled to record, and the same has never been recorded. Stein did not furnish any money to carry out the transaction aforesaid or know of the same. When Eriend acquired the mortgage from Herman he had notice of the state of the record as to the Lawrie mortgage. He made no inquiry therefor, nor was the mortgage or the note secured thereby produced at the time of the transaction, nor was there any evidence produced on the trial that such securities were then in Herman’s possession. Herman did not execute said satisfaction with the intention of delivering the same to the mortgagors. It was not received by Eriend with the understanding that it was to be so delivered. He retained the same until April 10, 1903, when he caused it, together with the assignment, to be duly recorded.
    Shortly thereafter Herman absconded. Eriend knew, prior to such departure, of Herman’s intentions in the matter. At the time of the transaction between Eriend and Herman in respect to the mortgage, the latter delivered to the former $3,000 face value of corporate stock to secure payment of $1,800, he at the same time giving Herman his check for that amount, which was subsequently paid. The stock was later returned to Herman. Plaintiff knew nothing of this transaction. Eor some fifteen years prior to Herman’s departure he was an active business man in Milwaukee, where all the transactions referred to occurred. During such period he was engaged in many business matters and enterprises, in some of which Friend was associated with him, and their relations were very close and friendly. On the eve of Herman’s departure he transferred to Friend some property in settlement of various claims the latter had against-him. The Law-rie note and mortgage were returned to Lawrie some time after the execution of the second $1,600 mortgage. Other facts were found sufficient to support the judgment, if correct ■conclusions of law were drawn by the trial court.
    The court held thus: The Lawrie mortgage is in full force and the first lien upon the premises described in the complaint. The second $1,600 mortgage and note were taken by Herman, and the money obtained therefor from Friend, with the intention on the former’s part of converting the same to his own use. The assignment of such mortgage was too incomplete when delivered to be effective for any purpose, and it was not made effective thereafter, in that it was not re-witnessed and acknowledged after its completion by filling in the name of an assignee. Friend took the mortgage with constructive notice of Lawrie’s rights under the first mortgage, and not as a bona fide holder. The satisfaction, in form, of Lawrie’s mortgage was ineffective for want of delivery thereof to the mortgagors. Herman was not the agent for Lawrie in taking and disposing of the second $1,600 mortgage. The several mortgages mentioned, as regards priorities, rank as follows: The Lawrie mortgage first, the Tedder mortgage second, the Yahr mortgage third, and the plaintiff’s mortgage fourth.
    Judgment was entered accordingly, from which plaintiff and Yahr separately appealed.
    For the appellant Yahr there was a brief by Turner, Hunter, Pease & Turner, and oral argument by O. F. Hunter.
    
    For the appellant Friend there was a brief by Charles Fñend and Arthur 8. Fñend, and oral argument by Arthur B. Friend.
    
    
      Gr. W. Hazelton, for the respondents.
   Tbe following opinion was filed October 24, 1905 :

Maeshalx, J.

Tbe finding tbat appellant is not tbe bona fide bolder of tbe $1,600 mortgage of November 14, 1902, is grounded, in tbe main, on tbe following supposed infirmities in ber position: (1) Tbe transfer of tbe mortgage was ineffective because tbe assignment was incomplete wben delivered, in tbat tbe space for tbe name, of tbe assignee was blank, and it was not re-acknowledged after being completed. (2) Charles Friend bad constructive notice of tbe first $1,600 mortgage, referred to as tbe Lawrie mortgage, wben be took and paid for tbe one in question, and did not make any inquiry as regards wbetber Herman, tbe owner of record, bad parted therewith or require production of papers showing tbat he was such owner in fact, or indicating tbat be had authority to make tbe satisfaction thereof. (3) Tbe satisfaction, in form, of such first mortgage delivered to Friend by Herman was invalid because tbe latter neither bad authority to make' it nor was it made to be delivered by him to tbe mortgagors,, nor given to Charles Friend to be so delivered. (4) Tbe assignment was completed, in form, by writing in tbe name of Stein without bis knowledge or bis having furnished any funds with which to purchase tbe securities. (5) Tbe note and mortgage were by Charles Friend, acting under a power of attorney from Stein but without tbe latter’s knowledge, assigned in writing to tbe plaintiff, tbe writing not being witnessed or acknowledged. We will consider such supposed infirmities in their order.

This court has so repeatedly held tbat one who bolds a paper executed by another, as in this case, with express or implied authority to fill up tbe blanks therein, may do so, and then record tbe instrument if tbat is necessary, with tbe same effect as though the paper bad been fully made before delivery, tbat we hardly need do more than refer to a few of tbe instances. Vliet v. Camp, 13 Wis. 198; Van Etta v. Even son, 28 Wis. 33; Schintz v. McManamy, 33 Wis. 299; Johnston H. Co. v. McLean, 57 Wis. 258, 15 N. W. 177; Nelson v. McDonald, 80 Wis. 605, 50 N. W. 893.

Numerous decisions, most of them being quite ancient, may be found bolding to the contrary of the. foregoing. Those,, however, of this court in respect to the matter are in harmony with the now prevailing rule. Dixon, C. J., in Van Etta v. Evenson, supra, said, as to the supports of conflicting decisions: “They are grounds of the purest and most unalloyed technicality, originating in a state of things and condition of the law which have long since passed away.” The rule deducible from that decision is clearly indicated in the syllabus in these words:

“Where a note and mortgage otherwise fully executed, but with a blank in each for the name of the payee and mortgagee, were delivered to an agent who was to'procure (from whomsoever he could) a loan of money thereon for the maker, this shows an intention that the agent should fill the blanks, and when so filled the instruments were valid without a new execution and delivery.”

It will be found decided in some cases holding that blank spaces, such as the one in question, may be filled up after delivery of the paper by authority in writing, that parol authority is insufficient, and that if it were otherwise authority could not be implied from the mere delivery of the paper in its incomplete condition: but the general rule is that when one delivers an instrument, whether the same be required to be under seal or not, so executed as to, in form, give it full validity upon the filling up of blanks, authority for the holder thereof to do that is implied.

True, Eriend had constructive notice of the first mortgage, but he had no notice, constructive or otherwise, of its assignment to Lawrie. The idea that one is not protected in dealing with the record owner of a mortgage, as regards a satisfaction thereof, unless the latter produces the securities, showing affirmatively that he is the right one to enter such ■satisfaction of record, is not in harmony with the recording act nor with the adjudications on tbe subject. There is nothing which we can discover charging Friend with knowledge of a state of things sufficient to put him on inquiry as to whether Herman was in fact the owner of the first mortgage. He had a right to assume that if Herman had assigned the mortgage that fact would appear of record. No such fact so appearing and no circumstance coming to his knowledge indicating the true state of things, or suggesting the probability of such state being inconsistent with the record, when Herman delivered the satisfaction to him he was warranted in supposing, as he did, that the note had been paid and with the mortgage delivered to the mortgagor.

The law as above indicated is supported by the following ■authorities: Girardin v. Lampe, 58 Wis. 267, 16 N. W. 614; Bank of the State of Indiana v. Anderson, 14 Iowa, 544; Vannice v. Bergen, 16 Iowa, 555; Livermore v. Maxwell, 87 Iowa, 705, 55 N. W. 37; Ahern v. Freeman, 46 Minn. 156, 48 N. W. 677; Ogle v. Turpin, 102 Ill. 148. In Girardin v. Lampe, supra, the facts were these: The assignee of the mortgage took a defectively written transfer thereof and recorded it. Subsequently the assignor discharged the mortgage. Later a third person for value acquired an interest in the mortgaged property without notice of the assignment, other than such as was afforded by the defective record. That was not effective because the instrument of assignment was not so,executed as to entitle it to be recorded. It was held that the third person’s interest in the properly was paramount to the mortgage. The gist of the decision in Ogle v. Turpin, supra, and the facts involved are stated concisely in the syllabus in these words:

“An assignee of notes secured by a mortgage may protect his equitable lien upon the mortgaged premises, by taking and putting upon record the assignment of the mortgage, so as to give notice of his interest, and thereby prevent others from , being deceived by any subsequent satisfaction entered of record by the mortgagee.”
“A person taking a mortgage from tbe payee will not be beld chargeable with notice that the notes secured in the first mortgage have been assigned, but he may rely upon the record, as showing title in his mortgagor.”

The other cases cited are quite as decisive on the point under discussion. The purpose of the record is too obvious, and the law in respect to the matter, as indicated, too plain-, to require any very extended discussion of the matter. When one deals with another respecting real estate, in the absence of actual notice of the true state of the title or of facts sufficient to put him on inquiry in respect thereto, he may safely rely on the record. If that works hardship to a third person,, as in a case like this, it is chargeable to the latter’s negligence in not exercising ordinary care to guard his own interest by causing the record to show the actual state of the case. The rule applies that, as between two innocent persons, oné of' whom must suffer pecuniary loss, the one is to be preferred who is without fault.

The point that Herman did not have authority to make the satisfaction has been sufficiently answered. He had apparent authority and that was sufficient. The record, which persons circumstanced as Friend was had a-legal right to rely upon, indicated the existence of such authority. Delivery of the satisfaction piece to the mortgagor, or preparation of it for that purpose, was not essential to its validity. The only purpose of such an instrument is to create record evidence of that which is accomplished by mere payment of the indebtedness. Since Ward and Lawrie were responsible for the state-of the record, indicating that Herman was the proper person to make the instrument of satisfaction, as to innocent third' persons it was competent for him to do so. This is unlike a case where the person appearing of record to be authorized to-satisfy a mortgage deposits a satisfaction piece with a third person for delivery to the mortgagor upon condition, and he-makes delivery regardless thereof. In such circumstances the instrument is held to be void, because the person purporting to be bound never in fact acted in the matter. Franklin v. Killilea, ante, p. 88, 104 N. W. 993.

The fact that Stein’s name was added to the satisfaction piece as that of the assignor without his knowledge, and that ho did not furnish the funds given in exchange for the securities, has no significance in view of the power of attorney. It is undisputed that the title to the property was placed in Stein’s name for convenience and by his' permission.

The circumstance that Stein did not know of the assignment of the securities, in form, to Mrs. Friend is of no significance in view of the power of attorney. The circumstance that Mrs. Friend did not know of the acquirement of the securities when it occurred is not important, since the evidence shows that her son Charles had ample authority to act for her in such matters and parted with full value in her money, or his own, in exchange for the property. Whether in the transaction the money was regarded by the parties as a loan, as the court in effect found, is immaterial since the evidence is undisputed that the same was not repaid and was finally treated as purchase money. Whether it was the one or the other does not affect the bona fides of the transaction. The circumstance that the assignment to Mrs. Friend was not witnessed or acknowledged is likewise of no significance. Neither was essential to transfer title. The bona fides of her ownership rests on the transaction between Charles Friend and Herman.

The findings to the effect that Herman absconded soon after the transaction with Charles Friend; that the latter knew of the former’s secret intentions in that regard; that the relations between the two for years prior had been very close and friendly, do not seem to require any extended notice. Counsel laid considerable stress on these circumstances upon the oral argument, as if they should be regarded as of some weight .as to whether Friend knew, or ought to have known, when he ■obtained the mortgage that Herman had no right to satisfy the Lawrie mortgage. However, it does not seem that the ■conclusions of law were grounded on such circumstances. At best they are sufficient to create mere suspicion. They do not warrant the belief that Eriend colluded with Herman in the fraudulent transaction as to the Wards and Lawrie, or that lie had knowledge, or ought to have had, at the time he acquired the note and mortgage that Herman was acting corruptly in the matter. Knowledge only came to him, as appears,' of Herman’s secret intentions to leave the country months after he obtained the securities. He certainly had a right to suppose, as the fact was, that the second $1,600 mortgage was given to provide means to take up the first one. He testified that he so understood the matter when he took the mortgage, and that he then had no knowledge of Herman’s being financially embarrassed. There is no satisfactory evidence to impeach that.

It is contended on hehalf of both appellants that the evidence clearly shows that the Lawrie mortgage was discharged in fact by the indebtedness to which it was incident being collected by Herman as Lawrie’s agent, and that the findings in respect to that branch of the case are clearly wrong.

It must be conceded that if, while the securities were in Herman’s possession for the purpose of collecting the indebtedness, he executed such purpose the money obtained belonged to Lawrie, and the mortgage lien was extinguished regardless of any formal entry to that effect upon the record. The trial court found that there was no claim on the trial that the Law-rie papers were in Herman’s hands November 24, 1902, when the transaction with Eriend occurred, and no evidence that he then had such possession. That was excepted to as were other • findings touching the question of payment. _ It seems that the attitude of counsel for appellants on this branch of the case and the effect of the evidence must have been misunderstood. Counsel must have claimed from the first to last that Herman was tbe agent of Lawrie to collect tbe latter’s claim, during all tbe transactions in relation thereto'. It was important to show that be was armed with tbe proper evidence of such authority, not only when tbe mortgages were made November 14, 1902, but when tbe transaction occurred with Eriend. No one claimed at tbe trial, we assume, certainly no one does upon appeal, that authority to collect of Ward authorized acceptance in payment of anything but money. It was obviously and properly claimed that if be trusted Herman to provide means out of tbe new mortgages made November 14, 1902, to pay Lawrie, and tbe latter did so before bis authority wa,s terminated, extinguishment of the Lawrie mortgage was tbe legal effect thereof.

Now tbe court found that Herman bad the Lawrie papers a short time prior to November 14, 1902, with authority to collect of Wcurd. While such authority did not by implication include authority to accept in payment anything but money, it included authority to exercise reasonable discretion as to the means to be used to accomplish the purpose of the agency, such as the employnent of an attorney to foreclose the mortgage. When did the agency terminate ? The findings do not cover that directly. They, in effect, hold that it-ended when the papers were placed in Comstock’s hand. We infer that because of silence as to whether Comstock returned the papers to Herman prior to the occurrences of November 14, 1902, leaving it to be assumed that he did not, and because of the finding that he did not participate in such occurrences. The views thus taken of the evidence by the trial court, which seem to be clearly unwarranted, resulted in the making of the finding as to there being no evidence that Herman had the Lawrie papers at the time of the transaction with Eriend November 24, 1902. It appears to be clearly established by the proofs that Comstock returned the papers to Herman on or prior to November 14,1902; that he had them at that time; that Corn-stock had notice of the meeting on that date at Herman’s office and participated therein; and that such papers did not leave Herman’s possession till after November 24th thereafter.

The evidence, as we read it, is to the effect that the amount necessary to discharge the indebtedness to Lawrie and other claims upon Ward’s property existing November 14, 1902, and the costs of the foreclosure was determined by Comstock and a statement thereof made by him in writing at the request of Mrs: Ward and Mr. Yalir, and that the three then went to Herman’s office to settle the matter. This is Yahr’s testimony on the subject:

“We met up in Comstock’s office and he then had the final figures showing how much money it would take to settle these whole amounts, that is, the amount due on the Lawrie mortgage, and on my mortgage, and on the unpaid taxes and interest. By my mortgage I mean the $300 mortgage held by the Baumbach Company. Then we all went down to Mr. Herman’s office, Mr. Comstock, Mrs. Ward and I. Mr. Herman was waiting there for us. The Lawrie note and mortgage were in his office at that time. That was on the 14th day of‘ November, 1902, the day the papers were executed. Mr., Herman had the note and mortgage there.”

The witness testified further, in effect, that at such meeting; he discharged his mortgage and advanced $300 in money, taking a new mortgage for $600; that he insisted upon seeing the: satisfaction of the Lawrie mortgage before doing so; that Herman exhibited .the same to him, and that Comstock remained with Herman and Mrs. Ward till after he concluded his part of the business and went away. Mrs. Ward testified to the same effect. Comstock testified that nothing positively was concluded as to the settlement of the Lawrie indebtedness in his office, or at any office when he was present. He did not testify that he had no notice of the meeting at Herman’s office on November 14, 1902. The trial court seems to have, accepted the witness’s general conclusion as warranting the finding that he had no such notice, though Mrs. Ward and Mr. Yalir testified to the contrary, and his evidence is contra■dictory and very unsatisfactory. He testified that Mrs. Ward and Mr. Yahr called on him at his office in relation to- the settlement of the Lawrie indebtedness, and that a conversation was then had resulting in an agreement in respect to the matter. ITe said nothing at first as to- Herman being present, or in respect to- the Lawrie papers. Later he said:

“Mr. Herman had possession of the Lawrie note and mortgage at that time.” (Referring to- fire time of the conversation in his office.) “I had two interviews. The conversation I am speaking of was in my office, and I had also- previous to that time met with them in Mr. Llerman’s office. After this conversation I had nothing more to do with the matter one way or the other. At the tione of the last interview Mrs. Ward, Mr. Herman, and Mr. Yahr lucre present. That was previous to the interview to which I testified.” (Again referring to the conversation in his office.) “At that time Mr. Herman had the mortgage and note there.”

Thus it will be seen the witness said that Herman was present at the time of the conversation in the former’s office when the agreement was made (obviously the same agreement testified to by Mrs. Ward and Mr. Yahr, which was concluded in Mr. Herman’s office), and that Herman then had possession ■of the Lawrie papers. He spoke of that as the last he had to ■do with the matter, and of the last interview (the one when Mrs. Wafrd, Mr. Yahr, and Mr. Herman were present) as having occurred previous to the interview in his office, which he declared was the last interview. How one of two inter-wiews could be the last, and yet have occurred previous to the ■other, would be difficult to- explain. The witness was evidently confused in respect to the matter. Probably there were two interviews. Mrs. Ward and Mr. Yahr testified that there were; that one occurred in Comstock’s office gome days prior to November 14, 1902, and that the other occurred on such date partly in Comstock’s office and partly in Herman’s office. Comstock could not reasonably be expected to remember the transaction as clearly as Mrs. Ward and Mr. Yahr. His office was but a few steps from Herman’s, botb being in tbe same building. A circumstance of going from one to tbe other was probably not of much significance to him. Tbe transaction involved was an ordinary one in a lawyer’s professional career, while to Mrs. Ward and Mr. Yahr, particularly tbe former, it was an unusual matter. On tbe main point all tbe witnesses agree, in this, when tbe negotiations took place for a settlement of tbe Lawrie indebtedness and tbe giving of a new mortgage to accomplish it, Herman was in possession of tbe Lawrie papers.

So tbe time state of tbe case appears to be this: On tbe 14th flay of November, 1902, Herman then having tbe Lawrie papers and authority to accept payment of tbe indebtedness, Ward intrusted him with three mortgages on bis property for tbe purpose, in the m4in, of raising tbe necessary money to make such payment. Three hundred dollars was at that time •obtained from Yahr. Subsequently by tbe transaction with Charles Eriend tbe balance of tbe money for such payment was obtained. Yahr and Ward acted in tbe matter on tbe faith of Herman’s having possession of tbe Lawrie papers and authority, as record owner of tbe mortgage, to discharge it. There is no evidence that Herman parted with tbe Law-rie papers after November 14, 1902, and before tbe occurrence of November 24th, thereafter, or as to when Lawrie. regained such possession. Tbe reasonable inferences all indicate that Herman bad them till some time subsequent to tbe transaction with Eriend. Such is tbe legal inference. One ■of tbe most familiar rules of evidence is that “when . . . tbe existence of a . . . personal relation ... is once established by proof, tbe law presumes . . . that tbe . . . relation . . . continues to exist as, before, until tbe contrary is shown, or until a different presumption is raised, from the nature of tbe subject in question.” 1 Greenl. Evidence (15th ed.) § 41; Body v. Jewsen, 33 Wis. 402; Eames v. Eames, 41 N. H. 177.

We cannot escape tbe conclusion that tbe finding of tbe trial court that there is no proof that Herman was in possession of tbe Lawrie note and mortgage November 24, 1902, and tbe finding, in effect, that be was not then tbe agent of Lawrie to collect of Ward, is contrary to the clear import of tbe evidence. During tbe continuance of Herman’s agency for Lawrie to collect of Ward, and bis agency for tbe latter to use tbe mortgages executed November 14, 1902, for tbe purpose of securing money to pay such indebtedness, be performed in both those respects. Thereby the Lawrie mortgage ■was extinguished, leaving its equivalent in Herman’s bands for Lawrie. Herman’s failure to pay tbe money to bis principal is a misfortune which tbe latter’s representatives cannot rightfully shift to tbe holders of tbe other mortgages. Herman embezzled Lawrie’s money, not Ward’s.

By -the Court. — Tbe judgment is reversed on both appeals, and tbe cause remanded with directions to render judgment in accordance with this opinion.

A motion for a rehearing was denied December 12, 1905.  