Fellows v. . Northrup

Hunt, Ch. J. The judge holding the Special Term has found and decided, as matter of fact, that the three sums iv question were paid upon the bond and mortgage sought to be foreclosed. This finding necessarily involves the authority of Hill to receive the money as the agent of the plaintiff, and the fact that he did receive it in that capacity. These conclusions of fact are binding upon us (Code, 267, 272), if there is any evidence to sustain them. We are not to weigh, measure or balance the evidence. If there is, however, no competent evidence to sustain snoh conclusions, or if the undisputed evidence establishes the contrary, it then becomes *120 a question. of law, and we are at liberty to examine it. (Pratt v. Foote, 5 Seld. 463; Farmers’ Bank v. Vail, 21 N. Y. 486; 22 id. 323; 20 id. 184, 522.) That Hill was the agent of the plaintiff in collecting the amounts due upon his bonds and mortgages generally, was reasonably established. This must be taken as one of the. facts of the case. Whether there is evidence, that the particular payments in question were made to him in that capacity, is a point which I propose to examine. I shall lay out of view the evidence given by Hill, which shows that he did not receive the money for the plaintiff, but for himself. The evidence to establish the agency is that of the defendant himself If it, however, establishes a condition of things, from which the legal inference must follow, that Hill acted for himself in receiving the money, and not as the plaintiff’s agent, then, as a legal result, there was no payment, and the judgment must be reversed. The defendant testifies, that, on the 24th of March, 1854, he bought the premises in question of Hill, upon the assurance, that they were free from any incumbrance, except a mortgage - given by one McCarthy; that the amount to be paid for the purchase was ascertained, which was the amount of the McCarthy mortgage, that he paid Hill $800 in cash, gave him his note for $901.36, payable on the first of July following, and the McCarthy mortgage was thereupon canceled. He took his deed and canceled mortgage to the clerk’s office for record, and there ascertained that the mortgage in suit was a lien upon the property he had just bought. He saw Hill soon after, and before he paid any further money, and Hill admitted the existence of the lien. The arrangement then made, is stated by the defendant thus: “ He (Hill) said, when I paid him .the money, it should apply on the Stoddard mortgage.” On his cross-examination, he says, “ I don’t know that Hill said how soon he would take up the Stoddard bond and mortgage. He said he would apply the money as fast as I paid it. I paid the sums indorsed at the date on which they are indorsed, and the rest I paid before the note became due.” On his re-examination, he says, “I paid Hill the money to apply on the Stoddard mortgage.” *121 On Ms re-cross, he says, “ The payments were indorsed on the note at the time they were made, the one of $450, I paid to Jenkins, Hill’s book-keeper, in a certificate of deposit; when I made the last payment, I called for the note, and it was given up to me.” Being further re-examined, he says, “I did not ask that the payments should be indorsed on .the note; I don’t remember its being produced when the payments were made.” In few words, this is the case. The defendant gives Hill his note for $901, due on his land purchase. He discovers the incumbrance, and Hill agrees that all the money paid to him shall apply on the mortgage. Is this money received by Hill, when it first comes to his hands, as a payment on the note held by him, or as a payment on the mortgage to Hr. Bellows? If the former, then it is received by him not as agent for the plaintiff, but for himself, and his accompanying promise to the defendant, that he will pay it to the plaintiff upon the mortgage, is a personal engagement merely. The defendant does not testify that he paid the money on the mortgage, or to Hill for the plaintiff, or that Hill professed to receive it as agent for the plaintiff. He says, simply, that he agreed “ to pay to Hill.” In every instance the expression is used “ to pay to Hill,” and in none that he was to pay to the plaintiff. When paid to Hill, it became his money. If he kept his promise, he would at once remit the same, or an equal amount, to the plaintiff, on behalf of the defendant, and thus the defendant’s debt would be paid. It would be paid, however, not by the receipt of the money by Hill, for he received his own money, but by its transmission to the plaintiff. Hill was not the plaintiff’s agent to receive money on notes given to Hill, but simply on mortgages given to the plaintiff. Upon this uncontradicted evidence, the law adjudges, that Hill received the money for himself and as his own. So far as he transmitted to the plaintiff, he acted as the agent of the defendant, and in fulfillment of his promise to him. An agent authorized to receive payment, can receive it in money only. Ordinarily, he can receive it when it becomes *122 due, and not before. He cannot commute the debt for another thing. He cannot compound the debt, or release it on composition, or submit it to arbitration. (Story on Agency, §§ 99, 100.) It is a general rule, also, that agency is a matter of personal confidence, and cannot be delegated. (Story on Agency, § 146.) Hill was the agent of the plaintiff to receive payment of his mortgages, but he could not delegate that power to Jenkins. While Hill was engaged in a large real estate business on his own account, as well as in the business of lumbering and distilling, it was proper that he should have a book-keeper, and that such book-keeper should be his agent in the receipt of moneys. When $450 was paid to Hill by the defendant upon his note of $900, it was right, proper and legal, that Jenkins, as Hill’s agent, should receive the money, and indorse it on the note. It was not right, proper or legal, that the plaintiff should be charged with the receipt of this money. He had never appointed Jenkins as his agent, or authorized him to receive money in his behalf. The receipt in law was by and for Hill alone. The rule is well settled, also, that an agent can have no personal interest in the subject-matter of the agency, and cannot act when he is so concerned. The law of agency proceeds upon the idea, that the agent is devoted to the interests of his principal, and that his judgment, his feelings and his interests, all concur in the discharge of his duty. (Story, § 210.) An agent employed to sell, cannot- buy. An agent employed to buy, cannot himself be the seller, nor can a trustee be interested in the subject of the trust. (Story, § 211; see also, N Y. Central Ins. Co. v. National Co., 4 Kern. 485; Bently v. Columbia, 17 N. Y. 421; and Conkey v. Bond, recently decided in this court.) Would the plaintiff have looked upon this transaction, if reported to him as it is claimed by the defendant, to have existed, as in the legitimate discharge of Hill’s agency ? He would have condemned the mixing up of his business with that of Hill, of his mortgages with Hill’s notes. He would have required, that his business be kept by itself, that, when money was *123 paid on his account, it should he held separately as his, and when paid to and for Hill, that he would have no concern with it. As a prudent man, who knew the confusion so commonly arising from the intermixture of trust duties with private interests, who knew the importance of a rigid separation of trust funds from private receipts, and the necessity of an immediate transmission of the latter, he could have entertained no other opinion. Certainly it is the judgment of the law upon the case. Suppose the plaintiff had been in the office of Hill when the $450 was paid to Jenkins. The defendant enters, and says, I wish to pay Mr. Hill $450, Jenkins receives it, takes down the plaintiff’s note to Hill, and indorses the amount on it. The plaintiff hears it and sees it as a matter of no importance to him, and makes no inquiry for his money. Suppose, on the other hand, he had said, I wish to pay Mr. Hill $450, as the agent of the plaintiff, on a mortgage made by Mr. Stoddard. This announcement would have had quite a different effect. The business should be so conducted, as that it would be understood by the plaintiff as his affair, if he had witnessed the transaction. Again, would not Hill be much less particular in making a deposit to the credit of his principal of money thus received, than if there had been no such machinery about it % I' think the moral duty to his principal would sit more lightly upon his conscience, than if the money had been paid on Stoddard’s mortgage directly. Upon the statement of the defendant himself, and giving him the benefit of all inferences to which he is entitled, and allowing no influence to the contradictory evidence, I think this judgment erroneous, that it must be reversed, and a new trial ordered.