Court Opinion

ID: 3581839
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:32:52.624849+00
Date Added: 2024-06-11T13:37:27.900900
License: Public Domain

The principal question to be determined in this case is, whether the payments made by Northrup to Hill, the agent of the plaintiff, were payments on the bond and mortgage made by Stoddard to Fellows. There is evidence to establish that there was an agreement between Hill and Northrup, that the payments made by the *Page 124 
latter should be thus applied, and of a promise by Hill to that effect. The solution of the question presented, must, under the circumstances, depend upon the fact, whether Hill was a general agent of the plaintiff, and had authority, from the fact that such agency existed, to make such an agreement, and whether the agreement thus made, and the payment of the money under it, was a present application which was obligatory and binding upon the plaintiff.
Northrup purchased the property without knowledge of the existence of the mortgage now in question. At the time when the deed was executed, he inquired of Hill, who drew it, about the title, and was informed it was all right; and upon being advised of the existence of the Stoddard mortgage, he told Hill of that fact, and Hill then agreed, as Northrup testifies, and as the evidence sufficiently proves, that the money paid in should be applied upon the mortgage, and Northrup made the payments accordingly.
There is not, I think, any question, but Hill had ample authority from the plaintiff to receive payment of the bond and mortgage. Hill had been his agent for a considerable period of time, for the sale of his real estates, and for the collection of bonds and mortgages, and the tendency of the evidence is, that he was fully authorized to transact business relating to these matters.
The fact, that he held Northrup's note in part payment of the purchase-money of the premises, does not, in my opinion, detract from the authority which he otherwise had, to act for his principal, or prevent the making of the agreement which he actually did make with Northrup.
If he had applied the money as he promised, it will not be claimed that the application was not perfectly legitimate and proper. Does it alter the case because he failed to carry out the contract? I am inclined to the opinion that it does not, and in such an event the party who employed Hill as an agent, must suffer any consequences arising from such failure.
It is said that the fact of Hill's individual interest in the matter, was known to Northrup and not to the plaintiff, and *Page 125 
that this incapacitated Hill from acting, in respect to this mortgage, as the agent of the mortgagee.
We are referred to The N.Y.C. Insurance Co. v. The N.Y.C.Insurance Co. (4 Kern. 85) as an authority to sustain this position. In the case cited, it was held, that, when an agent of one insurance company re-insured another company of which he was a director and secretary, acting for both, that the contract was not binding. The decision was placed upon the ground, that the trustee or agent of one person cannot make a valid contract respecting the subject-matter to which the trust or agency relates, where he has a personal interest.
His constituent, it is said, is entitled to have all his skill and judgment employed in his service. The case cited bears no analogy to the one to be determined, nor is any such principle involved. It is easy to discover, that, in the case cited, the agent might very well be in a position where his interest would be affected, and where his principal would fail to receive the full benefit of his skill and judgment.
But no such question is involved here. The contract was not in reference to the subject-matter of the trust which required the exercise of disinterested skill and the diligence and zeal of the agent, for the exclusive benefit of the principal (see Story on Agency, §§ 210, 211), but simply to apply money paid upon a bond and mortgage.
The note held by the agent could not properly interfere with that act, and it did not require the employment of any degree of judgment or skill, or discretion to make application. It was a question of integrity and not of judgment. The agreement would not deprive the principal of the full and entire benefit of the agent's services, and it cannot be maintained upon any sound legal principle, that an agent cannot receive money from a person indebted to him on his own account, because he might possibly misapply the fund, for he might misappropriate the money thus received, even if there was no debt due him, from the person who paid it.
I do not see that the agent, in a case of this kind, has any such interest as to avoid his contract, and have come to the *Page 126 
conclusion, that the principle contended for has no application.
It is insisted, that, even if Hill and Northrup agreed that the money should be paid on the bond and mortgage, and not upon the note, the withdrawal of the security by the creditor was a notice that the payment must be made to him, personally, and, not having the bond and mortgage, Hill must be regarded as Northrup's agent, and not as the agent of the plaintiff.
To sustain this position, the plaintiff relies upon Williams,
v. Walker (2 Sands' Ch. 325), and the authorities there cited.
It was decided, in the case cited, that a solicitor or agent, employed to procure an assignment of a bond and mortgage, or to invest money upon such securities, is not thereby authorized to receive principal or interest, when his client or constituent retains possession of the securities.
An examination of the authorities referred to discloses, that in no instance was there any proof to establish a general agency of the party to transact business for the person to whom the securities belonged, or any express authority to receive the money for the use of the principal, and, in most of the cases, the payments were made to the scrivener by whom the money was loaned.
It will be observed, that the party who thus received the money had no other business relations with the principal, and what he did related only to the particular transaction, and nothing else. He was not engaged in any special business, and did not sell lands, receive payments, or securities generally, and keep and render an account for moneys received, and of his services.
The agent's authority here does not depend upon the possession of the bond and mortgage at all; according to his own testimony, he kept a book containing a statement of the bonds and mortgages belonging to the plaintiff, and, from the statements thus made, he collected the moneys, and entered the payments made, in that book.
The proof shows, that he acted as the general agent of the plaintiff during the whole period of time within which *Page 127 
the payments were made, received moneys on bonds and mortgages taken upon the sale of plaintiff's lands, and gave receipts in his own name.
There was proof to establish an authority to receive the money in question, and, when such is the fact, the principle invoked has no application.
If the agent has express or implied authority to receive money for the use of the principal, it is not material, in any way, whether he has or has not the securities in his possession, and a payment to him is as effectual as if he had them in his possession.
Considering the whole testimony in the case, there cannot, I think, be any doubt that Hill had authority to receive payment on the bond and mortgage in question, and to agree to apply the moneys received upon the same.
And it does not change the liability of the plaintiff, because Hill held the note of Northrup.
The money was paid in good faith, under an agreement, that it should be thus applied, and it would operate exceedingly hard, if the plaintiff is not responsible.
He chose to employ Hill to transact his business, and held him out to the world as his agent, and he cannot complain if he is made liable for his acts.
The original fault, if any, was with the plaintiff, and it is eminently just, that the party least in fault should not suffer. Looking at the facts as they are now presented, I see no good reason to disturb the conclusion of the court, who heard the evidence, and saw the witnesses when examined upon the trial.
The question put to Albert Sawin, one of the defendant's witnesses, was, I think, properly overruled. On his direct examination, the witness testified to a conversation which he had with Hill, to the effect, that Hill had said that he was the agent of Fellows to receive the money, and that he would testify that this money was paid by Northrup to apply on this mortgage.
Before Sawin was examined, Hill was called and sworn as a witness, and gave evidence, that he did not recollect of *Page 128 
stating to Sawin, or of giving him to understand, that this money was paid to him upon the Stoddard bond and mortgage. Upon his cross-examination, Sawin stated, that he knew Hill to be a candid and truthful man, and was then asked the question, whether, knowing Hill to be candid and truthful, the fact, that his testimony now differs from what he supposed he told him, convinced him that he must have misunderstood him. The question was not proper, because it assumed, that Hill had contradicted Sawin, which was not true in point of fact, at the time when the question was put. He had only testified, that he did not recollect, which did not amount to a positive statement, and Sawin's statement was not a contradiction of Hill's want of recollection. Afterward, upon being recalled, Hill contradicted Sawin, but this did not make the evidence admissible, prior to the contradiction, and, to do so, Sawin should have been again examined as a witness. (People v. Mather, 4 Wend. 248, 249.) I am also inclined to think, that the testimony was not competent, because it called for the conclusion of the witness, upon the facts to which he had testified.
As the result to which I have arrived is adverse to the plaintiff, upon the main points involved, it is not necessary to examine the question raised by the counsel for the defendant, whether the case is properly presented for review.
The judgment of the General Term should be affirmed.
WOODRUFF, MASON, BACON and DWIGHT, JJ., concurred with HUNT, Ch. J. MILLER, CLERKE and GROVER, JJ., were for affirmance.
Reversed, and new trial ordered. *Page 129