Theyken v. Howe Machine Co.

Mr. Justice Gordon delivered the opinion of the court, The rulings of the Court below cannot be sustained. We are brought to this conclusion for two reasons which to us .seem sufficient. The agency of Deshler, the assignor of the plaintiff, was sufficiently proved, or, at least, the evidence thereof as adduced by the defendant, ought to have been submitted to the jury. Deshler had charge of the business of the Machine Company; its machines, marked with its name, were in his hands for lease or sale. The lease given in evidence was written on the company’s blank; it was executed by Deshler, and in if he was recognized as a special agent. This lease, or conditional sale, when executed, was sent to the company’s office, and when paid it was returned to Thoyken as the company’s vendee. In this the case resembles that of the Baltimore and Philadelphia Steamboat Co. v. Brown, 4 P. F. S.,“ 77, in which it was held, that where the company’s printed bill of lading held out one as a general agent, it was idle to attempt to deny his authority. So we may say here; Deshler was attending to the plaintiff’s business, and selling its machines, and in the face of the fact that his name appears as special agent on its printed blanks, which were filled up and sent to its general office, it was idle to attempt to deny that agency. There is, however, this second reason for sustaining the exceptions of the plaintiffs in error. The assignee of a specialty takes it subject to the equities of the obligor, and this rule holds good as well in the case of a mortgage as of any other sealed instrument: Mott v. Clark, 9 Barr, 399; Twitchell v. McMurtrie, 27 P. F. S., 383. In the absence of a certificate of no set-off it is the business of the assignee of a mortgage to make inquiries of the mortgagor as to its condition in the way of payment or equitable set-off, and if he does not choose so to do he must take upon himself the risk of such neglect. Now, if the evidence is to be believed, Deshler took an assignment of Theyken’s mort [100] gage to Ruhf under the express arrangement that the commissions due him, Theyken, from the company, were to be applied in payment of it, and as these were in excess of the amount thereof, the moment the assignment was executed to Deshler, the mortgage was, in equity, satisfied, and there was nothing left which he could assign to the company. In other words, the plaintiff, having received a transfer of this specialty without a certificate of no set-off, and without inquiry of Theyken, is in no better position than its assignor. This is not like the case of a mere set-off which the mortgagor might have against the assignee, and which, as we held in Blair v. Mathiott, 10 Wr., 262, and Downey v. Tharp, 13 P. F. S., 322, could not be made'available against a subsequent assignee, for in the case in hand there was the equivalent of an actual payment by Theyken to Deshler, and the assignment afterwards to the plaintiff was a fraud, easily discoverable by inquiry of the mortgagor. In this it is like Reineman v. Robb, 2 Out., 474, and we must regard it as governed by the principles therein announced. We may also'observe that Mr. Justice Thompson, who delivered the opinion of the court in Blair v. Mathiott, seems to admit that a payment to the first assignee might be made available as a prior and superior equity, but says, “ every claim would not possess the same merit.” This is undoubtedly correct, but as in the case in hand the defendants’ offer was to prove a direct payment, or, as we have said, what was equivalent to a direct payment, we think it should have been received. The judgment is reversed and a new venire ordered.