#### Levi Hayne, Respondent, Appellant, *v.*William E. Van Epps, Appellant, Respondent.

Third Department,

January 8, 1908.

Mortgage — action to recover the consideration of a building-loan mortgage — payment to third person — new trial.

When in an action by a mortgagor against his mortgagee to recover the consideration of a building-loan mortgage, the president of the firm which furnished the lumber for the building testifies that the mortgagor agreed that the consideration should be paid, direct to him,by the plaintiff’s attorney when received . from the mortgagee, it is error to direct judgment for the plaintiff for an installment which was paid to such president by the defendant.

Appeal by the plaintiff, Levi Hayne, and by the defendant, William E. Yan Epps, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Schenectady on the 14th day of February, 1907, Upon the verdict of a jury rendered by direction of the court after, a trial at the Schenectady Trial Term, and also an appeal by the defendant from an *64order entered in said clerk’s office on the 12th day., of March, 1907, denying the defendant’s motion for a- new trial made upon the .minutes.

The case oh a former appeal is reported inTlé Appellate Division, 278, where the-facts are stated. •

*Franje*Cooper, for the plaintiff. ’

*Henry V. Borst*and *George G.*Stewart, for the defendant.

Cooheane, J.:

The trial court submitted to the jury specific questions as to whether Mr; Stewart was the agent of plaintiff and authorized to • receive for him the consideration of the mortgage or to direct the defendant to pay the same to the Mohawk Valley Lumber Company. These questions were answered by tile jury in the negative. The court thereupon, disregarding the special verdict of the jury, held as matter of law that SteWart was the agent, of the plaintiff and that- payments *to*him • by the defendant were equivalent to payments to the plaintiff.

It appeared at this trial that defendant paid $2,200 of the,consideration of the mortgage to, Stewart and .the remaining $300 directly to Mr. Burr, tile president of the Mohawk Valley Lumber Company. Eor this -latter, .amount, with- interest, the court, directed a verdict in favor of plaintiff and. from .the judgment entered on such verdict the defendant' appeals-.

• Plaintiff appeals because the coiirt did not direct- 8 -verdict, in liis favor for' $1,900 and interest, that being tile entire consideration of the mortgage except $600 which he admits was paid on liis order to Stewart. '

On this trial Mr, Burr testified that it-was agreed between plaintiff and himself when the mortgage was executed that the consideration thereof was to be paid directly to him as’president of the lumber company without any order to that effect in payment for the lumber which was to be used in the construction of the house covered by the mortgage and another house’ His testimony is as follows: “ I told him (plaintiff)T would not be subject to his giving me an order from tizne to time; that that money must be paid me'directly from Mi-. Stewart as it was earned, and Mr. Hayne consented to it; *65Mr. Hayne said to me that then he could draw,on Mr.'Sullivan’s mortgage and would not have to pay out any more for lumber. Sullivan’s mortgage was for $3,600 and covered the east lot; and Mr. Hayne said I could draw the money on the Yan Epps mortgage in order to pay the lumber bill on both those houses. I was furnishing lumber for both houses*; and Mr. Hayne said that I could draw the money on the Yan Epps mortgage to pay the lumber bill not only on the Yan Epps house, but also on the Finch house in order that he might be free to draw the money from the Sullivan mortgage to use on other houses.” Stewart testified to substantially the same facts. It was Burr who procured the defendant to take the mortgage in question. Burr furnished the name of the mortgagee to Stewart who was the attorney for the lumber company and had been for some time prior to the transaction in question, and Stewart told plaintiff that defendant would take the mortgage. Stewart turned over to Burr the $2,200 received by him of defendant.

If such evidence be true the whole consideration of the mortgage was paid by defendant in entire accord with plaintiff’s authority and agreement whether paid directly to Burr or through Stewart, and it was wrong for the trial court to direct a judgment for any amount in favor of plaintiff. This is true independently of the question of Stewart’s relation to plaintiff. We have now the question of Burr’s authority to receive the money for the lumber company which question was not raised on the first trial, and as Burr testified directly to such authority a verdict could not be directed against the defendant. Such theory of the case, however, was not considered either by the court or jury. It would not be profitable in view of the fact that both parties are appealing to attempt to fix the responsibility for such omission. Both parties are dissatisfied with the judgment and under the circumstances a new trial should be. granted. . i

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

All concurred.

Judgment and order reversed and new trial granted, with costs to abide event.