should equally share in the loss which re- lender paid the agent for his services, or sulted from the agent's default.

that the agent was an independent solicitor for any one who would accept applications for loans, and was empowered and paid by the borrower.

In this case, no such previous relations existed between either party and the agent. The borrower told Parrish that he wanted a real estate loan, and Parrish, having some blanks of the company, filled out an application for Schick to the company, which was signed by Schick, and was forwarded to the company, and which, by its terms, made the company Schick's agent to procure the loan; and Schick paid the company $280 commission therefor, although the company took the loan itself. The company paid Parrish for his services. Schick made Parrish his agent to receive and pay out the money, so far as it was possible for him to do so, in what is called the contract for authorization slip; the company had full control of the money, and had the right to have it applied to the discharge of the prior mortgages, and in the letter transmitting the money made Parrish its agent to so apply it.

As to the authority of an agent to act for each of two contracting parties, where there is no conflict in their interests, and the agent is vested with no discretion, see E. S. Ins. Co. v. A. C. Ins. Co., 138 N. Y. 446, 449, 34 N. E. 200, 201, in which it is said: "It is not doubted that the same person may sometimes act as agent for two parties in the same transaction. But he can do so only in case he has no discretion to exercise for either party. An agent to sell for one party may also act as agent for the buyer, but only in case the price and terms of sale have been fixed by each party, so that nothing is left to his discretion. But an agent to sell, intrusted with a discretion, and thus bound to obtain the best price he can, cannot buy for himself or as agent for another. In such a case, he would occupy antagonistic positions, and there would be a conflict of interests. He could not faithfully serve the one party without betraying the interests of the other. He would, at least, be under great temptation to betray the interest of one of the parties. So a person It may be said that Schick had borrowed may sometimes act as agent of both parties the money, intrusted to Parrish, of the comin the making of a contract. But he can-pany, and had given his note and mortgage not do so when he is invested with a discre- to secure the repayment thereof; and that tion by each party, and when each party is therefore it was Schick's money, and, being entitled to the benefit of his skill and judg- embezzled, it was his loss. On the other ment." The foregoing decision is well sus- hand, it may be said that, to the extent nectained by numerous authorities therein cited. essary to pay off the prior mortgages, the In the case at bar, none of the reasons which company loaned the money for that purpose debar an agent from acting as the agent of only; and if for any reason the mortgages each of the two parties to the transaction could not be paid the company, and not exists. Schick, would have been entitled to a repayment thereof from Parrish.

Generally the question for whom an agent is acting in a particular transaction is a The possession of the money wherewith to question of fact depending upon all other pay the prior mortgages was the company's facts surrounding the transaction. But, security for the discharge thereof, to the end where the facts in detail of the transaction that its mortgage should be a first lien on are undisputed or agreed upon, as in this Schick's land. Under the contract in the apcase, the question becomes one of law. Lov-plication for the loan, the company had the don Savings Fund Society v. Hagerstown right to apply as much of the money as Savings Bank, 36 Pa. 498, 78 Am. Dec. 390; was necessary to the purpose for which it McLean v. Ficke, 94 Iowa, 283, 62 N. W. was loaned. Had it done so, Schick's rights 753; Seehorn v. Hall, 130 Mo. 257, 32 S. W. would in no way have been infringed upon. 643, 51 Am. St. Rep. 562; Insurance Co. v. Whatever the company had the right to do, Ives, 56 Ill. 402. it could, perhaps must, do, if at all, by an agent. On the other hand, Schick did not have the possession of the fund, and could not have compelled the payment thereof to him. Neither could he have compelled the delivery thereof, either to himself or to Parrish, as his agent, for the purpose of enabling either of them to make payment of the prior mortgages.

We are cited to several cases, relating to the misappropriation of borrowed money by an agent, in which it is decided upon whomthe borrower or lender-the loss should fall. There decisions are in harmony in one respect at least-the loss is held to fall upon the party for whom the court holds the embezzler was acting as agent. Some courts hold the defaulter the agent of the borrower upon substantially the same facts as other courts hold him the agent of the lender, though usually some circumstance is seized upon to turn the scale. Frequently the solution is found in the prior relations of the agent to the lender or borrower, as that he had previously been employed to solicit loans for the lender, and in the transaction the

In accordance with the following authorities, it was the duty of the company to apply the money to the discharge of the prior mortgages. McLean v. Ficke, 94 Iowa, 283, 62 N. W. 753; Insurance Co. v. Ives, 56 Ill. 402. If this be the law, and the company undertook, through Parrish, to so apply the money, it is responsible for his embezzlement thereof. Schick, however, had an equal in

(Supreme Court of Kansas. April 6, 1912.) owed to the bank. A trial resulted in a ver

[1] Error is assigned on the overruling of a demurrer to the second count of the petition, which alleged that wheat belonging to appellees was taken by appellant, and converted to its own use. It is contended that the claim is barred, as the action was not brought within two years from the conversion of the property. Although an unlawful conversion of property is a tort, the owner of the property so appropriated may, if he chooses, waive the tort, and bring his action While the presentation of a check is the on the implied contract for the value of the usual method by which a customer demands the payment of money deposited in a bank, property. Smith v. McCarthy, 39 Kan. 308, formal demand is not essential to a recovery 18 Pac. 204. The averments of the petition

fairly indicate that appellees were suing on the implied contract and for an indebtedness due thereon, rather than for damages sustained for the wrong done.

a demand was not necessary to a recovery, but this was an error in favor of appellant, and from which it suffered no prejudice.

The testimony is conflicting, but under the rules which govern where testimony has been weighed by a jury, and where their findings have been approved by the trial court, it must be held to be sufficient. The judgment is affirmed. All the Justices concurring.

(86 Kan. 860)

COMMONWEALTH TRUST CO. v. COCK-
ERILL ZINC CO. et al.
(Supreme Court of Kansas. April 6, 1912.)
(Syllabus by the Court.)

1.

[2] It is next contended that there was error in admitting in evidence the two checks drawn by Bracken for his personal obligations, and which were paid out of the funds of appellees. The checks were on blanks printed for appellee's use, and the name "The Farmers' Shipping Association" had been erased, and the word "manager," following Bracken's signature, was also erased, thus making them appear to be the personal checks of Bracken. There was a contention by appellant that the erasures were made after the checks were cashed. The principal objection to the admission of the checks is that the presentation of cashed and canceled cheeks was not a proper method of drawing money which had been deposited in a bank subject to check. It is true that the usual method of demanding money so deposited is by the presentation of the check of the depositor, but it may be demanded without a check or written order. 5 Cyc. 527. Whether the demand made in this instance was in conformity with the universal custom and usage of banking is immaterial. Payment was not refused because a check, regular in form, was not presented, but it was rather that nothing was due to appellees, as it was claimed that the checks had been paid out of the proper fund. Appellant denied liabil-paramount to the lien of the mortgage. ity on the returned checks, and also denied that appellees had money in the bank. As appellant justified its refusal to pay on the grounds that the money of appellees had been properly applied to the payment of the checks, and did not rely upon the lack of a proper demand, it is evidence that a demand would have served no purpose. It is a general rule that, where it is manifest that a demand would have been wholly futile if made, it is unnecessary to go through the formality of making it. Raper v. Harrison, 37 Kan. 243, 15 Pac. 219; Bogle v. Gordon, 39 Kan. 31, 17 Pac. 857; Machine Co. v. Mann, 42 Kan. 372, 22 Pac. 417; C., K. & W. Rd. Co. v. Com'rs of Chase County, 49 Kan.

CORPORATIONS (§ 482*)-MORTGAGES-FORECLOSURE-DISTRIBUTION OF PROCEEDS.

While the power of the court in foreclosure cases to create preferential liens upon who have furnished labor or material for its the mortgaged property in favor of persons betterment or preservation is ordinarily limited to the property of corporations or concerns in the business of which the public has an interest, nevertheless, where possession of mortgaged property of a corporation in a business in which the public has no interest is upon default surrendered by the mortgagor to the mortgagee, and the latter, while in possession and before the final decree, employs labor and purchases supplies which are used to improve and preserve the property and to increase its value as security, it is proper for the court to make the claims for such labor and material liens

399, 30 Pac. 456; Bartlett v. Bank, 70 Kan. 126, 78 Pac. 414.

[Ed. Note. For other cases, see Corporations, Cent. Dig. §§ 1877-1888; Dec. Dig. § 482.*]

2. MORTGAGES (§ 436*) — ACTIONS TO FOREINTERVENTION DISCRETION OF

CLOSE
COURT.

It is within the sound discretion of the trial court to permit persons claiming an interest in mortgage property to file interpleas after judgment of foreclosure has been entered, and before the final disposition of the

cause.

[Ed. Note.-For other cases, see Mortgages, Cent. Dig. § 1289; Dec. Dig. § 436.*]

Appeal from District Court, Allen County. Action by the Commonwealth Trust Company, as trustee, against the Cockerill Zine Company, defendant, and the Gas City Drilling Company and others, interpleaders. From the judgment, plaintiff appeals. Affirmed.

Campbell & Goshorn, of Iola, for appellant. Morse & Pees, of Iola, E. D. Mikesell, of Fredonia, Ewing, Gard & Gard, of Iola, and C. E. Benton, of Ft. Scott, for appellees.

An instruction as to the necessity for a demand by means of a formal check was rightly refused for the reasons already stated. Instructions in relation to the commingling of goods were asked for and refused, but the court did instruct the jury on that subject, and those given were as favorable to PORTER, J. The appellant, as trustee, appellant as the evidence warranted and as brought this action to foreclose a morthe was entitled to have given. Complaint is gage or deed of trust executed by the Cockmade that one instruction given by the court erill Zinc Company, a corporation, to secure made a demand by appellees an essential ele- certain bonds. The trust deed covered all ment of recovery, while the testimony show- the property of the company, including three ed that a proper demand was not made. The zinc smelting plants and appurtenances, and court should have told the jury that, owing other property used in connection therewith, to the defense made by appellant, proof of two of the plants being located in Allen For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes

company, and at the same meeting a resolution was adopted directing A. B. Cockerill, as president of the company, to deliver possession of all the property covered by the mortgage to the substituted trustee. A few days later, on July 12th, A. B. Cockerill, George E. Nicholson, and the National Bank of Commerce of St. Louis, holders of 1,084 of the bonds, made a written request to the Commonwealth Trust Company to act as substituted trustee, and to take charge of the property through Mr. Nicholson, and administer the trust for the bondholders.

[1] The evidence does not show that the trustee took possession formally, but it is clear from all the evidence that while Cockerill, as president of the company, continued in charge, he was under the direction and control of Nicholson, to whom he reported almost daily, showing in detail the operation of the plants and the cost and expense incurred; and this continued until the sale under the foreclosure decree in May, 1910. The business was conducted in the name of the Cockerill Zinc Company, but Nicholson came to the properties at different times, and gave orders and directions for the man

county, and the third in Wilson county. The substitution was duly made on July 2, 1909, appellees are interpleaders, who filed claims at a meeting of the directors of the zinc for material and labor furnished and supplied in the operation and betterment of the zinc plants during the period after default in the payment of interest, when, it is claimed, the bondholders were in possession of the property, either through the trustee or through their own agent. The main question involved in the appeal is whether the court erred in making the judgments in favor of the interpleaders first liens on the mortgaged property in preference to the lien of the bondholders. The appeal also questions the power of the court to permit interpleas to be filed after the sale under the decree of forclosure, and while confirmation of sale was pending. The latter question applies to a part of the interpleaders only. The mortgage or trust deed provided that after six months default in interest, upon notice by the trustee or any bondholder, and the election of the majority of the bondholders, the entire principal sum and interest should become due; further, that upon such default the mortgagor, upon demand of the trustee, should surrender possession, and the trustee, or such agent as it should appoint, might take possession of all the property, including the company's books and ac-agement of the business, and upon his orcounts, and operate and manage the plants and make all needed repairs, alterations, additions, and improvements as it should deem wise, receive rents, incomes, and profits, "and out of the same pay all proper costs and expenses of so taking, holding, and managing the same." Another provision reads: "The said trustee shall be authorized to pay reasonable compensation out of the trust estate to such person or persons as it may employ in the administration or management of this trust; and the said trustee shall be entitled to just compensation for all services rendered by it in connection with such trust, which shall be paid out of the trust estate." The trustee was not to be personally liable for any debt contracted by it "during any period wherein the trustee shall manage the mortgaged premises upon entry or voluntary surrender as aforesaid." On July 1, 1909, the Cockerill Zinc Company was in default in its interest payments which had continued for a year. Twelve hundred bonds, of the face value of $1,200,000, were issued and secured by the mortgage. A. B. Cockerill, president of the zinc company, owned 534 of the bonds, George E. Nicholson owned 300, and the National Bank of Commerce, of St. Louis, Mo., owned 250. After the default had continued for more than six months, the holders of a majority of the bonds, which included 200 of A. B. Cockerill's bonds held by a bank as collateral security, requested the Cockerill Zinc Company, in writing, to substitute the Commonwealth Trust Company, of St. Louis, Mo., for the New York Trust Company, the orig

ders the plants were finally closed. It appears that the bondholders were kept fully advised of all the facts and met frequently to discuss the situation of affairs, and that Nicholson was selected to represent them because he was experienced in the smelting business and was a large holder of the bonds. The evidence tended to show that during all this time he was held out by the bondholders as their trustee, or as agent for the substituted trustee in their interest. For some reason it was not deemed advisable to foreclose the mortgage at once, and probably it was the intention to allow Mr. Cockerill time to see if he could make the business profitable or procure financial assistance from outside parties to enable him to pay off the interest charges. Nicholson reported to the bondholders in January, 1910, that the plants were being operated at a loss, and advised foreclosure. The plants were closed down, and in February this action was commenced. Three of the interpleaders, Stanberry, Donnan, and the Gas City Drilling Company, furnished materials and supplies, including the sinking of several gas wells on the mortgage property, before the plants were closed down, and while Nicholson was in control of the property. They filed their interpleas upon leave of court soon after the foreclosure proceedings were commenced. The other interpleaders were permitted by the court to file their claims after the sale had been made under the decree of foreclosure, and after a motion to confirm the sale had been filed. Their claims are for supplies and labor furnished. At the

[2] It cannot be doubted that the court had power to permit the filing of interpleas at any time before the final disposition of the case. Having acquired jurisdiction for one purpose, it could, and properly should, retain it for the purpose of rendering justice to all parties in interest. It could do this after judgment as well as before, and without any express provision of the Code. Gibson v. Ferrell, 77 Kan. 454, 94 Pac. 783. The permission to file the interpleas after judgment rested in the sound discretion of the court. Besides, it could not possibly have injured the appellant to permit the inter pleas to be filed when they were. The judgment is affirmed. All the Justices concurring.

(86 Kan. 848)

STATE v. JUSTUS et al.† (Supreme Court of Kansas. April 6, 1912.) 1. CRIMINAL LAW (§ 231*) — PRELIMINARY EXAMINATION-SUFFICIENCY.

the La Harpe plant 4,000 retorts, at Gas | estate. What the trustee might do for the City 6,000, and at Altoona 7,000. These re- bondholders as their agent and as agent of torts, if allowed to cool, would have been the mortgagor it would seem the bondholdruined. At the three plants there were 20 ers, to whom the mortgagor had surrenderfurnaces which it was necessary to keep on ed the property and control of the business, "dead fire," or otherwise they would cool off, ought to be able to do for themselves. and damages amounting to several thousand dollars would result. In order to keep the insurance effective and to prevent tools and appliances from being carried off, it was necessary that watchmen be employed at all the plants. The interpleaders who were permitted to file claims after the decree were persons who performed services of this character after the closing down of the plants. It is true that the power of the court to create preferential liens in favor of persons who have furnished material, supplies, or labor is ordinarily limited to corporations or concerns in which the public has an interest, such as public service corporations, where the necessity of keeping the business as a going concern for the convenience of the public and to preserve the security furnishes the reason for making such claims paramount to the lien of a prior mortgage. International Trust Co. v. Decker Bros., 152 Fed. 78, 81 C. C. A. 302, 11 L. R. A. (N. S.) 152; 34 Cyc. 299. Receiver's certificates issued for the sole purpose of carrying on a business in which the public has no interest had been admitted to bail, was brought before A person charged with a felony, and who would not as a general rule be authorized by a magistrate for preliminary examination, and, a court of equity; and, if the claims of the when the testimony in support of the prosecuinterpleaders had nothing to stand upon ex-discharge on the ground that probable cause tion was produced, the defendant moved for a cept that they were incurred over the objections of the bondholders for the purpose of keeping the business of the zinc company a going concern, a different question would be presented. The facts are that the bondholders were mortgagees in possession with the consent of the mortgagor; and all of the indebtedness represented by the interpleas was incurred in their efforts to improve and preserve the property and to add to its value as security for their own claims. We think there was sufficient evidence to warrant the court in holding that the property was taken over by the bondholders in July, 1909. We are unable to distinguish any difference between the situation presented and that where the holder of a first mortgage upon an unfinished business building, having taken possession with the mortgagor's consent, should, before proceeding to foreclose, incur indebtedness for completing the building and in preserving it as security for his claim. In such a case, it would be most inequitable to permit him to assert the priority of his mortgage lien to that of the claims of persons who at his request furnished the material and labor necessary to create and preserve the security. The trust deed by the provision quoted, supra, authorizes the payment out of the trust estate of compensation "to such persons as the trustee may employ in the administration and management" of the

for charging him with the offense had not been shown. The magistrate then postponed the for 24 hours, and when that time arrived, and hearing and took the motion under advisement the defendant did not appear, the magistrate decided that an offense had been committed and that there was probable cause to believe dehe be bound over for trial. The bond was fendant guilty of the offense and ordered that given, and, at a trial in the district court, where he was convicted, defendant contended that he had not had a preliminary examination because he was not present when the order was made and that he had not been permitted to offer testimony in his own behalf. Held, that the examination, in which all of the testimony of the prosecution was offered, afforded the defendant reasonable notice of the nature of the offense charged against him and fairly accomplished the purpose of a preliminary examination, and, further, that he could not defeat the proceeding by neglecting to appear before the magistrate at the time to which the adjournment was taken.

[Ed. Note. For other cases, see Criminal

Law, Cent. Dig. §§ 479-481; Dec. Dig. § 231.*]
2. CRIMINAL LAW (§ 1032*)-APPEAL-PRE-
SENTING QUESTIONS IN LOWER COURT-DU-
PLICITY.

The uniting of a charge of felony with another of the same general character which constitutes a misdemeanor is not ground for the reversal of a judgment of conviction, where no motion to quash the information was filed nor any attack made on the information on the ground of duplicity until after the convic

tion was obtained.

[Ed. Note.-For other cases, Law, Cent. Dig. §§ 2627, 2628, 2642, 2653; see Criminal Dec. Dig. § 1032.*]

For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes

Rehearing denied.