Case ID: ad_114/html/0278-01.html
Source: Caselaw Access Project
Author: {"author": "Cochrane, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Levi Hayne, Appellant, v. William E. Van Epps, Respondent.
    Third Department,
    June 27, 1906.
    Principal and agent—payment of building loan to agent of owner — erroneous nonsuit.
    When, in an action to recover the consideration for a mortgage given to secure a building loan, the defendant shows that although he paid part of the consideration to an alleged agent of the mortgagor, he paid without authority other portions of the loan to parties furnishing materials for the building, a nonsuit is error. Conceding the payment to the alleged agent to be good, payment to other persons was unauthorized and the plaintiff was entitled to some recovery.
    
      Appeal by the plaintiff, Levi Hayne, from a judgment oí the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Schenectady on the 23d day of January, 190G, upon the dismissal of the complaint by direction of the court after a trial at the Schenectady Trial Term, and also from an order entered in said clerk’s office on the 7th day of February, 1906, denying the plaintiff’s motion for a new trial made upon the minutes.
    This is an action to recover the consideration of a bond and mortgage for the sum of $2,500, executed by the plaintiff to the "defendant on the 17th day of J une, 1905, which mortgage was recorded the same day in the Schenectady county clerk’s office.
    
      Frank Cooper, for the appellant.
    
      Henry V. Borst and George C. Stewart, for the respondent.
   Cochrane, J.:

Plaintiff was engaged in the construction of a house in the city of Schenectady. He applied to George C. Stewart to procure for him a loan of $2,500, to be secured by a bond and a mortgage on the property on which said house was being constructed. Stewart procured the loan of the defendant and the bond and mortgage in question were executed. Plaintiff agreed to pay Stewart $75 for procuring the loan. It was agreed that the consideration of the bond and mortgage was to be paid in installments as the work on the house progressed. Plaintiff at the time gave to Stewart an order on the defendant for $600 of the consideration of the bond and mortgage and instructed Stewart to retain $75 for his compensation and to pay $525 to the Mohawk Valley Lumber Company or to one Burr, its president, to which company the plaintiff was indebted for lumber. Plaintiff was engaged in other building operations, and there were business transactions between him and the Mohawk Valley Lumber Company concerning not only the property on which the mortgage in question was given but also other property. In December, 1905, plaintiff called on the defendant, with whom up to that time he had been unacquainted, and demanded the balance of the consideration of the bond and mortgage. He was then informed by the defendant that he had paid the entire consideration either to Stewart or to Burr. At that time the house covered by the mortgage was completed. Plaintiff claimed on the trial to be entitled to recover the entire consideration of the bond and mortgage except the sum of $600, for which he had given to the defendant the order to pay Stewart at the time the bond and mortgage were executed.

The complaint was dismissed because, in the opinion of the trial justice, Stewart was the agent of the plaintiff and had authority to receive from the defendant the consideration of the bond and mortgage. We may assume for the ¡purposes of this appeal which, however, we do not decide as matter of law, that Stewart had such authority, but the judgment must nevertheless be reversed, because the defendant did not pay the whole of the consideration to Stewart. He paid pait of it to Burr. It does not clearly appear that more than $1,600 was paid to Stewart. Any payments made to Burr or to any person other than Stewart were clearly unauthorized. And if it be assumed that Stewart had authority to receive from the defendant the money for the plaintiff, the case does not show as a matter of law that Stewart was authorized to disburse such money for the plaintiff, except said sum of $600, or to direct its payment by the defendant to any other person, nor does it appear that Stewart directed 'the defendant to make payment to any other person. No other reason is suggested by the defendant why this judgment should be affirmed.

The judgment and order must be reversed and a new trial granted, with costs to the appellant to abide the event.

All concurred.

J udgment and order reversed and new trial granted, with costs to appellant to abide event.