Mynick v. Bickings , 30 Pa. Super. 401 ( 1906 )

Opinion by

Henderson, J.,

The appellant applied to Silas Jones, an attorney, for a loan of #1,000 which Jones promised to procure for him and for whose services with reference thereto the appellant agreed to pay him #20.00. The money was obtained from the plaintiff and the appellant executed a bond and mortgage to her for the amount borrowed. Interest was paid to Jones from time to time and by him paid to the plaintiff and on October 31, 1898, #500 was paid to Jones on the principal. On October 16,1902, the appellant paid #100 to a clerk in Jones’ office tobe applied on the principal. This latter amount was given to the plaintiff but the payment of #500 was not paid to her; nor had she knowledge that it had been received by Jones until after his death. It is now contended by the appellant that the plaintiff should be charged with the payment of #500 on the ground that Jones was agent for her and authorized to receive pa3rments of principal and interest on the mortgage. It is not claimed that the bond and mortgage were placed in his bands for collection, nor that he had express authority to receive payments thereon. The plaintiff received and retained the bond and mortgage after the loan was made and they were not in the possession of Jones at the times when the payments were made to him. The right to the credit is not claimed by way of estoppel because Jones was held out to the appellant by the plaintiff as her agent, but 'because of an undefined employment in connection with loans made by her to other persons. This employment was sought to be shown by an offer to prove that Jones was the agent of the plaintiff in loaning money on mortgage and judgment and the collection of the principal as well as the interest on those loans “ and that this course of dealing continued through their whole connection with him.” It was not proposed to show that the plaintiff was engaged in loaning money as a business or that Jones was her agent, generally. The argument is that if the plaintiff allowed or employed Jones to collect money on loans made by her and pay the same to her such action invested him with authority to receive and receipt for principal or interest on any bond or mortgage which she held, without express authority from her so to do; and in this view of the case, it would not seem to make any difference whether the number of loans was large or small. The act of Jones with reference to two or three loans would commit the plaintiff to responsibility for his conduct with reference to the one now under consideration or others which may have been made by the plaintiff. The mere fact that the attorney acted as a conveyancer in the transaction between the plaintiff and defendant did not invest him with authority to collect the debt. The obligations were given to the plaintiff. This the appellant well knew. They were not in the possession of Jones at any time when payments were made. The defendant had not been requested to make payments to Jones, nor had the plaintiff held out the latter as having authority to receive payments on the debt. Relying on his integrity and apparently to avoid the inconvenience of finding the plaintiff and paying her, he gave the money to Jones to be paid over. In so doing he assumed the risk that Jones might not act in good faith. If, at the time the payments were made, the bond and mortgage had been in Jones’ possession such possession would have been evidence of his control of the obligations. The debtor might have made himself secure by insisting on the production of the obligations and having the payments indorsed thereon. Generally speaking, it is the duty of a debtor, who is bound by an obligation in writing, to see that the person to whom he pays the money for his creditor has possession of the evidence of indebtedness, unless he can show express authority in the person to whom the payment is made to receive the money. Loans made by the plaintiff were independent transactions completed when the security was delivered and the money paid. The completion of one transaction would not invest the attorney with power to act in another outside of the express authority given him or that implied in his engagement as an attorney in professional business. Nor did the fact that payments of interest were received from time to time and accepted by the creditor imply that he had authority so to receive them. When the money was paid to the creditor the debtor received credit for the payment, but any other person might have handed the money to the creditor with the same effect as when done by the attorney through whom the loan was effected: Williams v. Walker, 2 Sandf. Ch. 325; Smith v. Kidd, 68 N. Y. 130; Story on Agency, secs. 98, 104; Haines v. Pohlmann, 25 N. J. Eq. 179. The position of an investor would be most precarious if the fact that he employs an attorney from time to time when making loans and authorizes him to make collections of interest, and in special cases of the principal due on securities, is sufficient to warrant a finding of authority generally to collect the principal of all his client’s mortgages and that, too, when the latter keeps possession of his obligations. Numerous cases, of which Dougherty v. Hunter, 54 Pa. 380; Brooke v. R. R. Co., 108 Pa. 529; Culver v. Pocono Spring Water Ice Co., 206 Pa. 481; Chemical Co. v. Purchasing Co., 22 Pa. Superior Ct. 426, are examples, are cited by the appellant’s counsel relating to the authority of an agent when engaged in the discharge of his duty in the prosecution of a business, but we think they are not applicable to the facts of this case. Our attention has been called to our own case, Himes v. Herr, 3 Pa. Superior Ct. 124, as an authority in support of the appellant’s position. In that case, however, the attorney was acting in a strictly professional capacity. A judgment had been entered in the court of common pleas. He procured a revival of the judgment, was attorney in the case and clearly capable of receiving the amount of the debt. Moreover, tbe plaintiff in the judgment ratified his act and accepted from him a deed in satisfaction of the sum receipted for by him. In view of the relation of the attorney to the case and the subsequent conduct of the plaintiff in the judgment we do not see how any other conclusion could have been reached: McMahon v. Bardinger, 18 W. N. C. 112, is of like character. An action was pending on a mortgage. Muh took an assignment of the mortgage, Webster acting as his attorney. After the assignment the sci. fa. was discontinued. Afterwards, the attorney pressed the defendant for payment and succeeded in collecting a part of the mortgage. Soon thereafter he issued a sci. fa. on the mortgage and on the same day gave a receipt for the money which he had theretofore collected. A few weeks later the plaintiff discovered that the payment had been made to his attorney. The court permitted this evidence to be introduced for the purpose of showing that Webster was acting as attorney in the case for Muh at the time the payments were made to him. The facts tended to show the employment of the attorney for the collection of the debt and that being the case the payment to him by the debtor would be a good discharge from liability. In the case we are now considering the agent did not act in the capacity of an attorney in a proceeding in court; nor was there any intimation of a ratification or compromise. He who transacts business with an agent is bound to inquire as to the nature and extent of his authority. In the present case the defendant made no inquiry but assumed that because Jones effected the loan he was authorized to receive the debt and interest. The plaintiff did not mislead him and he, rather than the plaintiff, should bear the misfortune of his inattention.

The judgment is affirmed.