The plaintiff held a note, made by the defendant and payable to the order of the plaintiff, for $800 with interest, payable on the 1st day of April, 1867,- at the office of L. J. Wilkin, in Dundee. When the note fell due the plaintiff gave it to her son-in-law, Murray, at whose house she was stopping, to present for payment. Murray accordingly presented the note to the defendant for payment, at Wilkin’s office, on the 1st day of April, 1867, and the defendant then and there paid the note in full, in cash, and the same was delivered up to him and canceled. At the time of such payment the note was not indorsed by the plaintiff ■ At the time of the presentation of the note, Murray also presented a written order, as follows: “ Mr. Wilkin: Please pay my money' to Mr. Murray. Caroline Doubleday.”
This order was not in fact signed by the plaintiff, "and she had no knowledge of it. Murray pretended to the plaintiff that he had received only the interest due on the note, and was to get a new note, with an indorser, for the $800, payable at the expiration of another year, with interest. And he immediately absconded with the $800, and has defrauded the plaintiff of the whole thereof. The plaintiff, by. this action, seeks to repudiate the payment, so far as the principal is concerned, and to recover the amount thereof of the defendant, upon the ground that Murray was not authorized- by her to receive the payment of the note in cash, but only to receive the interest, and to take a new note for the principal, payable at the expiration of another year. The defendant, however, had no notice, or reason to suspect any such limitation upon the authority of Murray, and had never made any agreement to renew the note in the manner indicated by the instructions of the plaintiff" to Murray. The question presented by the case is, whether the payment, under the circumstances, was a valid payment to the plaintiff, and discharged the note.
*196The payment was clearly valid, both upon authority and principle. It is well settled that a debtor is authorized to pay to an agent any sum which is due upon a security which has been intrusted to the agent, by the holder, for the purpose of collecting any part of it.’ As where the agent has been authorized to receive the interest only, but receives the principal. In fact the authorities go to the extent of holding a payment valid, made-to an agent who is merely intrusted with the possession of the 'security, without the express authority to receive or collect any part of it. The ostensible authority attributed to - a party to whom is intrusted an instrument to secure the payment of money, is to receive payment according to its terms. And large amounts are constantly paid to parties in possession of such securities, without any other evidence of authority than the bare possession of the security.
The case of Williams v. Walker, (2 Sandf. Ch. 325,) where many of the authorities are collected, was a struggle to have payments held valid, which had been made to the supposed agent after the securities had been withdrawn from his hands. (See also Hatfield v. Reynolds, 34 Barb. 612; Raley on Agency, part 11, § 4; Story on Agency, § 98.)
The principal is, as to third persons, not having any notice of a limitation, bound by the ostensible authority of the agent, and cannot avail himself of secret limitations upon the authority, and repudiate the agency, where innocent third persons have in' good faith acted upon the ostensible authority conferred by the principal.
The fact that the note was not indorsed by the payee is of no importance. Such indorsement would have been requisite to render the note negotiable, but is not necessary to the validity of a payment. A. delivery of the note to the mqker is all that is required, upon the payment either to the payee or his agent, and all that is usually done. The indorsement is no more necessary than *197a receipt. An agent authorized to receive payment undoubtedly might, within the scope of his power, either give a receipt in the name of the principal, or in the case of a note, indorse the name of the principal in such manner that it should appear that the .indorsement was made upon a payment, and not for the purpose of putting the note in circulation. The note no more required indorsement to make valid a payment of its full amount in cash, than in case it had been taken up in the manner the plaintiff claims. Murray was authorized to receive the payment. The cases in which the validity of payments to agents have been upheld on the ground of possession, are mostly cases of bonds, where there was no apparent title, by assignment, indorsement or otherwise, in the agent.
In England, mortgage securities have been in some cases excepted from this principle. But even this exception has been repudiated in this country. (See Williams v. Walker, and Hatfield v. Reynolds, supra.)
It certainly would not have been prudent for the defendant to pay the note in the manner proposed by thé directions of the plaintiff to Murray, without some further evidence of authority, because the presumption from the possession of the security is not of unlimited authority, but only to receive payment according to its terms. (Story on Agency, § 98 and note 4.)
Here the payment was in precise accordance with the terms of the security*, and the payment was authorized by the fact that the agent had the possession of the security with the consent of the owner, for the purpose of receiving payment, although in a manner different from that provided for by the contract. The presentation by Murray of the written order purporting to be signed by plaintiff, could not detract from the effect of the plaintiff’s entrusting him with the possession of the note. In fact the possession of the note gave credit to the order. It is not clear but that an agent empowered by parol to collect a *198note, might properly write an order for its payment to himself in the name of the principal, as he might sign a receipt or indorse the note if required.
[Fourth Department, General Term, at Buffalo, February 6, 1871.An ostensible authority to receive payment embraces an ostensible authority to do all those things necessary and proper to be done on the occasion. Howev„er this may be, it is quite clear that the presentation of the written order, the defendant supposing it to be genuine, could not have the effect of invalidating a payment otherwise justified.
The judgment must he reversed and a new trial granted, costs to abide the event.
The cause having been tried before Justice Johnson, he did not sit, on the appeal.
Mullin, P. J., and Talcott, Justice.]