All the special defenses aver that the several accounts antedating those in suit were assigned as collateral security. Payment of the debts so secured before the assigned accounts were collected would extinguish whatever *Page 216 rights the bank acquired to the latter by the assignments. It does not appear from the second defense that this was not the situation when the defendant made the several claimed payments to the E. S. Wheeler and Company, and the essential purpose of the defense therefore fails. The first demurrer was properly sustained for this reason.
The fourth defense avoids this defect. It states an uninterrupted course of dealing in transactions precisely similar to those in suit, involving the same parties in the same respective relations and covering a considerable period of years, during which an invariable method has been openly pursued by the parties, and not only fully acquiesced in and approved by the bank, but directly invited by it. This included the collection of these accounts from the defendant by the E. S. Wheeler and Company "in each and every case," regardless of any assignment and its attendant notice, all under the permission and authority of the bank, and while the indebtedness to the bank which they were intended to secure remained unpaid. It is also alleged that the defendant paid the accounts in suit to the E. S. Wheeler and Company, honestly relying upon and in pursuit of this custom, and that he acted in so doing "with the knowledge and in the belief that the plaintiff had permitted, suffered and authorized" the E. S. Wheeler and Company to follow the same course with these accounts that it had uniformly authorized and approved in the past dealings of the parties.
This is a good defense. It is not essential to its effectiveness that express agency or authority appear; it is enough that throughout a long course of similar dealings between the same parties the bank has invariably permitted the assignor of these claims to undertake and manage their collection, and that, with full knowledge of the situation — which must be imputed to it on the facts set forth — the bank's attitude and conduct have been such as to warrant the defendant's honest belief in its continued sanction and approval of this course. "Where one, without objection, suffers another to do acts which proceed upon the ground of authority from him, or by his conduct adopts and sanctions *Page 217 such acts after they are done, he will be bound, although no previous authority exist, in all respects as if the requisite power had been given in the most formal manner. If he has justified the belief of a third party that the person assuming to be his agent was authorized to do what was done, it is no answer for him to say that no authority had been given, or that it did not reach so far, and that the third party had acted upon a mistaken conclusion. He is estopped to take refuge in such a defense. If a loss is to be borne, the author of the error must bear it. If business has been transacted in certain cases it is implied that the like business may be transacted in others." Bronson v.Chappell, 12 Wall. (U.S.) 681, 683. Whether the subject is treated as an agency by estoppel, or as one of apparent or ostensible authority, the principle is the same and the law is well settled. Union Trust Co. v. McKeon, 76 Conn. 508,513; Harrison v. Legore, 109 Iowa 618, 622; Johnston v. Milwaukee W. I. Co., 46 Neb. 480, 490. We think it clear that the allegations of the fourth defense, if established, disclose an apparent authority in the E. S. Wheeler and Company to collect the accounts sued upon, and that as between the plaintiff and the defendant any loss arising therefrom must be borne by the former. Fitzgerald v. Beckwith,182 Mass. 177, 179.
The trial court erred in sustaining the demurrer to this defense, and the error was logically followed upon the trial by the rejection of such testimony as was pertinent only to establish its allegations. The initial error also foreshadowed those instructions to the jury which limited them to a consideration of express agency, as distinguished from an apparent or ostensible one, which is the gist of the defense. These errors, therefore, call for no independent consideration.
There was no error in the admission of secondary evidence of the terms of the several written assignments. The effect of the pleadings was to admit their due execution. Woronieki v. Pariskiego, 74 Conn. 224, 226; Uncas Paper Co. v.Corbin, 75 id. 675, 677; Garland v. Gaines, 73 id. 662. *Page 218 Copies of them had already been made a part of the complaint at the defendant's instance. The plaintiff having satisfactorily explained its inability to produce the original writings, and having made seasonable but unavailing demand upon the defendant for their production, had satisfied every legal prerequisite for the production of secondary evidence as to their precise terms. Neither their loss, nor destruction, nor a surrender of their possession, under circumstances which implied no relinquishment of its rights under them, made it necessary for the plaintiff to lay a foundation for this course in its complaint. Hinsdale v. Miles, 5 Conn. 331,334; Bank of the U.S. v. Sill, ibid. 106, 111.
Whether the plaintiff could sue in its own name as the actual and bona fide owner of the claims, was still in issue as the case reached the jury, and this was a question for their determination under proper instructions. The court charged them that if the assignments were made as collateral security for outstanding loans on which a sum still remained due greater than the amount of the assigned accounts, they might find that the plaintiff was the bona fide holder of the accounts and entitled to sue upon them. This seems to be in harmony with other passages of the charge dealing with the same subject, and at least in its application to the case presented upon the record it was correct. No informality which the writings themselves disclose would have justified the trial court in holding, as matter of law, that they are not adequate for the purposes claimed by the plaintiff; and upon the conditions assumed, which correctly outlined claims of fact as presented by evidence, the assignments vested in the plaintiff that real beneficial interest which furnishes the test of its rights to maintain an action upon them in its own name. The plaintiff's equitable ownership was not necessarily the less actual, bona fide and without accountability, because it was extinguishable in whole or in part by the performance of some future condition within the agreement of the parties. Metropolitan Life Ins. Co. v.Fuller, 61 Conn. 252, 262; Devine v. Warner, 75 id. 375, 381, 76 id. 229, 234. *Page 219
The trial court neglected to charge the jury in the language of fifteen written requests presented by the defendant, and this is assigned as error. The charge fairly covered some of these requested instructions; others — dealing with the question of the plaintiff's right to sue in its own name — were properly refused for reasons already indicated. The only material error upon this branch of the case came from the court's treatment of the subject of apparent or ostensible authority, as involved in the fourth defense. What we have already said, in discussing the erroneous ruling on the demurrer, reaches such errors upon the trial as were obviously the direct outcome and result of it.
There is error, the judgment is set aside and the case is remanded to be proceeded with according to law.
In this opinion the other judges concurred.