American Mortgage Co. v. King

COLEMAN, J. This litigation grew out of a transaction entered upon to secure a loan of money. George W. King executed his promissory notes to The American Mortgage Company of Scotland, Limited, and secured the same by a mortgage on certain lands, which included his homestead. At thé same time he executed his notes to the Alabama Loan Company, and also to one Manghen, and secured them by a mortgage on the same lands. The consideration of the notes to the Alabama Loan Company and to Manghen, was for services rendered in securing the loan of money. The bill seeks a cancellation of the mortgages as a cloud upon the title of complainant, and bases the right to' relief upon two grounds : first, that complainant failed to receive the money; and, second, that the acknowledgment to the mortgage was taken and certified to by a notary public attempting to exercise such functions outside of the county in which he had j urisdiction to take and certify acknowledgments of deeds and conveyances. In the matter of taking acknowledgments to conveyances, the jurisdiction and authority of a notary public, in this State, does not exceed that of a justice of the peace.—Code of 1886, §§ 1112, 1118; Edinburgh American Land Mortgage Co. v. Peoples, 102 Ala. 241. On this phase of the case made by the bill, it is sufficient to say, that complainant offered no evidence to sustain the averment of the bill. As to the other ground of relief, the uncontroverted facts show, that the notes of complainant made payable to the respondent, The American Mortgage Company of Scotland, Limited,, and secured by his mortgage were forwarded to and received by the latter, and in consideration therefor, it furnished the amount of money agreed to be loaned. Whatever may be the relations and liabilities of the Alabama Loan Co. and Manghen to complainant, the borrower, under the facts, the respondent, The American Mortgage Company of Scotland, Limited, was fully authorized to pay the money for the complainant as authorized by him. The proof on this point is [361] fuller than it was in the case of Ginn v. New England Mortgage Security Company, 92 Ala. 135, in which it was declared, under like circumstances as in the present case, that the money was paid oyer to the agent of the borrower. We are not able to draw a distinction favorable to complainant, between the case at bar and that of the Edinburgh American Land Mortgage Co. v. Peoples, 102 Ala. 241, supra. The same agent Manghen, acted in that as in the present case. The application of the borrower Péoples in that case contained the following provision , which is in the present application : “I agree to to pay J. W. V. Manghen as my attorney a reasonable fee for taking this application, conducting correspondence, and making ample abstract of title to my land, and in securing and paying over the money.’.’ Italics are ours. The court used this language : ‘ ‘This power and authority authorized Manghen, as the agent and attorney of Peoples, to receive the money from the loan company, and Peoples must bear the loss of his fraud and embezzlement.” The cases are precisely alike. The proof shows that Manghen received the money for complainant and embezzled it. It may be a hard case on complainant, but hard cases should not make shipwreck of just principles. The lender was authorized to pay the money to the persons or agents authorized by the complainant to receive it for him. Having done so, its responsibility ceased. It would be manifest injustice to visit the loss upon the lender. The decree of the chancery court is reversed, and the cause remanded that further proceedings may be had in conformity to this opinion. Reversed and remanded. Haralson, J., not sitting.