Herrick v. Mosher
| Decision Date | 21 January 1898 |
| Docket Number | Nos. 10,865 - (257).,s. 10,865 - (257). |
| Citation | 71 Minn. 270 |
| Parties | ELIZA A. HERRICK v. FRANK C. MOSHER and Others.<SMALL><SUP>1</SUP></SMALL> |
| Court | Minnesota Supreme Court |
Kitchel, Cohen & Shaw, for appellant.
Littleton & McCaughey and Robert Taylor, for respondents.
In an action to foreclose a mortgage on land owned by the defendant the defense interposed was that the defendant had paid the mortgage to one Kelley, plaintiff's duly-authorized agent.
The following facts were admitted, or conclusively proved: Plaintiff intrusted $1,600 to Kelley as her agent, to lend to third parties on real-estate security. In order to secure the money for his own use, Kelley resorted to the following device: In April 1889, he conveyed to one Hammond, a clerk in the office, a quarter section of land, and placed the deed on record. On the same day he caused Hammond to execute a note for $1,600 payable in five years, to the order of plaintiff, with annual interest, and a mortgage running to plaintiff on the land referred to as security for the payment of the note, placed the mortgage on record, and then transmitted the note and mortgage to plaintiff, reporting it as a loan made to Hammond. The whole transaction, as between Kelley and Hammond, being a scheme for Kelley's benefit, in which Hammond had no interest, the latter, in 1890, reconveyed the land to Kelley, subject to the mortgage, which Kelley "assumed and agreed to pay." This deed was also placed on record. To continue the deception, Kelley regularly paid the interest on the mortgage, and transmitted and reported it to the plaintiff as having been collected from Hammond.
About the 1st of April, 1895, Kelley, through his agent, Cutler, bargained and sold the land to the defendant for the agreed price of $3,000. He executed and delivered to defendant a deed with full covenants of title except that the covenant against incumbrances excepted "a mortgage of $1,600 to Eliza Herrick, with interest from April 1, 1895." This was the first notice which defendant had of the existence of any such mortgage. He accepted the deed, and placed it on record. At the time of the delivery of the deed he paid on the purchase price $1,400, and about a month afterwards sent Kelley a draft payable to his (Kelley's) order for $1,609.34, which, it will be observed, would be exactly the balance of the purchase money, with interest, as well as the exact amount due on the mortgage to the plaintiff as stated in the deed from Kelley to the defendant. This is the "payment" relied on as a defense. Kelley never paid or accounted for any of this money to plaintiff, but continued up to July 1, 1896, to pay interest on the mortgage as before as if collected by him from Hammond. He, however, sent to defendant a forged satisfaction of the mortgage purporting to have been executed by plaintiff. Defendant placed this satisfaction on record, supposing it to be genuine.
Defendant had no personal acquaintance with either plaintiff or Kelley, and there is no evidence that either at the time he accepted the deed, or at the time he transmitted the draft for $1,609.34, he had any knowledge of any agency on the part of Kelley for plaintiff, or that they had any business relations whatever with each other.
The first contention of plaintiff's counsel is that, whatever may have been Kelley's authority generally, as plaintiff's agent, to receive payment of money for her, yet that under these facts defendant's payment was to Kelley personally, and not as agent for plaintiff. The only evidence as to the payment or the purposes for which it was made is the testimony of defendant himself. All that Kelley testifies to on the subject is that he received the draft which defendant sent him. Defendant's testimony is as follows: Direct examination:
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