(dissenting). It is undisputed in this case that plaintiff was in good faith an indorsee for value, before maturity, of the note and mortgage in suit. The note and mortgage were given to one Peter B. Dirks, a 'banker at Oacoma, who indorsed and in due course delivered the same to plaintiff. Plaintiff, -for several years, had been buying and discounting cattle paper or loans made by Dirks, and Dirks was interested in looking after collections and renewals of loans upon which he had become guarantor or indorser. The note in suit was dated April 3, 1916, and was due on November 1, 1916. On September 23, 1916, about *559five weeks before maturity of the note, the defendant with knowledge that the note was not-in the possession of Dirks, and. that it was owned by a bank in Sioux City, Iowa, and without plaintiff’s knowledge or solicitation, paid to Dirks the amount due on the note. Dirks died insolvent shortly thereafter, without remitting the money to plaintiff. Defendant pleads payment of the note.
Appellant’s principal assignment of error is insufficiency of the evidence to sustain the finding of the trial court:
“That at the time of the said payment said Peter B. Dirks did not have possession of said note or mortgage, or either of them, and had no authority, either actual or ostensible, to collect payment or receive payment of said note or mortgage, and was not the agent of the owner or holder thereof for the purpose of collecting or receiving payment thereof.”
The evidence is quite voluminous, and it would serve no useful purpose to summarize it here. It discloses, in brief, that plaintiff at various times, for several years, had purchased cattle paper from Dirks, and, in certain cases, had requested Dirks to look after renewals of notes he had sold and indorsed to plaintiff, and to insist on payment of such loans when due. But in not a single instance is it shown that any paper was ever placed in the hands of Dirks for collection, either before or after maturity, though in certain instances notes were sent to -Dirks after payment, for delivery to the makers.
I have examined the entire evidence with much care and am satisfied that it is sufficient to sustain the finding of the trial court, and that the finding is fully sustained' by, and is not against, the clear preponderance of the evidence.
The majority opinion concedes that the record does not disclose any ostensible agency on the part of Dirks, and I think it equally clear that the trial court was right in finding that no actual agency existed. It follows that Astoria State Bank v. Markwood, 37 S. D. 56, 156 N. W. 583, and Beck v. Spiegler, 37 S. D. 618, 159 N. W. 134, should be held decisive of this case.
In the latter case,'Justice McCoy correctly states the rule of ‘ law in this class of cases:
“Where the maker or subsequent obligor of a negotiable note makes payment to a person other than the then owner or holder *560of such note, he has the burden of showing: (i) Facts from which it will appear that the person to whom, such payment was made was the ostensible agent of the then owner of the note; or (2) facts from which it will appear that the person to whom such' payment was made was the actual agent of such owner; or (3) facts which will create an estoppel in pais as against such owner of said note.”
The testimony of R. H. Edens, one of the officers of plaintiff bank, is fully corroborated by that of the other officers of the bank, and by the contents of the entire correspondence relating to various notes and mortgages taken by Dirks from his customers and sold and indorsed iby him.. Mr. Edens testified:
“We permitted Peter B. Dirks to make no promises to anybody for us. If he had any paper to sell us, he was to send it in and submit it to us, and if we wanted it and the paper was made out right, the security right, and. it was in proper form, we ac-. cepted it.”
I can see no reason for departing in this case from the rule, long settled in this court, that a finding of the trial court upon a question of fact, largely upon oral testimony of witnesses, will not be disturbed upon appeal unless against the clear preponderance of the evidence.
With this decision standing as a precedent, financial institutions in the larger business centers must find so-called “cattle paper,” ¡bought from local banks, a hazardous investment.
GATE'S, J., concurs in this dissent.