pu.rchase money, thousands of dollars more than he actually paid out. Could any clearer case of gross misconduct be disclosed? Can it be said that after such misconduct in purchasing. complainant is still bound to accord him the right to sell and give to him the commissions and profits of such sales? He who cannot.be.trusted to buy, cannot be trusted to sell; if ,he defrauds in the purchase, can it be otherwise than that he will defraud in the sale? .He who yields not common honesty in the one direction, forfeits all rights in the' other. It is said by counsel, and. the '. testimony seems to warrant. the assertion, that this land has become very valuable, and. that the profits.on its sale would be simply.enormous,and the question is asked, ought defendant to be deprived of his share of these profits? It may be hard punishment, and yet the law in every page, and sentence of its sacr.edvolumes iterates and reiterates the ancient truth that honesty is the best policy, and affirms that the agent who deliberately defrauds his principal, justly forfeits all right to commissions and compensations, as welias loses his time and labor. The charges of the bill are proved; the defendant as the agent, an agent with an interest, deliberately defrauded his principal, the complainant, and therefore has forfeited all the interest and rights given to him by this contract; and the complainantis:entitled to a decree as prayed for. In the law case which is brought to recover the money fraudulently drawn from complainant, 1 state the ,account thus: $92,882 70 Amount received,Amount paid out for Cardenas' tract, - $10,941 00 41,448 00 For theWestminors'tracts. For the John S. West tract, 5,000 00 For the Anthony heirs' releases, 2,400 30 For expenses shown in letter'Febnlary 12th, and allowed, 500 00 60,289 80 Balance,-; . - $32,593 40 -For which Judgment will go. . , The deClarations of law requested by complainant are given·.
(Oi'fcuit OOU'ft, S. D. lowa, O. D.'
PAYMENT-To AGENT-AUTHORITY. In ll. suit to foreclose a Inortgage'the
defense was payment. The evidence showed that the loan had been negotiated through a broker in Des Moines, Iowa, who ,had the general oversight of the loans of the plaintiff. collecting the interest and prihcipal of all loan's as they fell due; that the plaintiff had expected the broker to collect andreInit the interest on the mortgage in suit, to urge its payment when due. and to receive themonev, and forward it to plaintiff; that the defendant had never had any correspondence with plaintiff In regard to the loan; that the bond accompanying the mortgage was made payable at Westfield, New York; and that the defendant had paid to the broker,
"'tENT V. CONGDON.
upon his demand, the amount due, though the broker did not at the time of such payment have in his possession the bond and mortgage. H6ld, that such payment was a discharge of the mortgage.
In Equity. Bill for foreclosure of a mortgage. Willard & Fletcher, for complainants. Runnels & Walker and W. H. Stilea, for defendants.
SHIRAS, J. This suit was brought originally by Darius E. Kent for the purpose of foreclosing a mortgage on realty executed by the defendant Congdon, for the purpose of securing payment of a note or bond for $1 ,200 which came due May 1, 1885. After the filing of the bill the complainant named died, and the administrators of the estate were duly substituted as complainants. The defense is that on or about May 6, 1885, the defendant Congdon paid to H. R. Creighton, of Des Moines, the sum 0[$1,251.47, in full discharge of the mortgage debt; he being at the time the agent of the mortgagee, with authority to receive payment of the sum due .. The facts are that in 1879 the defendant Congdon, desiring to borrow thesum of $1,200, applied to the Union Loan Association of Des Moines to procure such loan for him. The business of procuring loans on the one hand, and of making investments therein for others, was carried on at Des Moines by one Hugh R. Creighton, mainly in the name of the Union Loan Association. The general plan of operations was to procure applications for loans, with statements of the situation, character, and value of the security offered, and these were sent by Creighton to various brokers in the eastern states, by whom they would be submitted to persons having money to loan. When a loan was thus placed, Creighton would be notified, and he would have executed a bond and mortgage to the person taking the loan, making the bond payable at the office of the brokers through whom the loan was placed. The money so loaned, after deducting the commission charged· by Creighton, would be paid to the bOITower,and thus the contract for the procurement of the loan would be completed.' IIi order to encourage investors to patronize the association or Creighton, the latter undertuok the collection of the interest principal of the loans thus made, and when necessary, carried through personally or supervised the foreclosure of the mortgages, looked after the insurance on the mortgaged property, the payment of the taxes, and the like. In spring of 1885,Creighton absconded, when it was ascertained that he was a defaulter in a large amount; having carried on a systematic plan for defrauding those intrusting their affairs to his management. The money sent him by Congdon, in May, 1885, for the purpose of paying the debt due Kent, he had not forwarded, but had applied it to his own use; and the question for decision is whether Creighton, as the agent of Kent, had the authority to receive payment on the debt in question. On part of complainants it is argued that throughout the entire transaction Creighton acted as the agent of the borrower. This position cannot be sustained, in view of the facts disclosed in the evidencfl. In the
"irt,the capacity of agentforthe borrower; but when the loan was obtained, the se6ut'ity executed'arid deli Yered, the money paid to the borrower, his agency in this particular' ceased. From the letters of Darius E. Kent to Creighton, in,troduced in evidence, it appears that the general care and oversight of the loans mll-debyKent through the agency of Creighton was intrusted to Creighton., Thu!;! in aletter dated Novetr,lber 25,1884, Kent names a number ofloans needing attention, urged prompt renewllls of insurance policies that had expired on all loans that were not at once paid, discusses an application for an extension of a loan; saying that he had written the party to apply toCreigqton, and that, if he considered the security ample, the extension would be given. Under date of April 8, 1885, Kent again writes to Creighton,enumerating a number' ofloans that needed attention; and in fact such is the purport of all the letters introduced. and they are inconsistent with the theorythat Creighton was npt acting on behalf of Kentio looking after the investments made by Kent in Iowa. But it is said that it does not appear that Kent had intrusted to Creighton the duty of;collecting the sums coming due on his securities, and that authority to receivepayment of moneys due cannot be, inferted from :tbefactthat Creighton exercised stipervisionover some special matters connected with the loans. It clearly appears from Kent's 16tterB that Creighton was intrusted with the duty of foreclosing the mortgages when ,that became necessary. In the letter of November 24, 1884, Kentwrites ,Creighton as follows: "As I tn'ust use here some tnoney, and also use other moneys already promised, I shall need at least $3,600 soon as lean get it from that. as per yours ofeighteenth instant, now on hand, and from the Joseph Sherod, James TE'rell, Lucinda a.Taylor, and the December 1st interest. After that Iahull be ready for more,applications, as I have money." April 8, 1885" Kent writes to Creighton, saying: "Now, mOJ,"e.in regard to the unpaid interest, as was due December 1,1884. There is now unpaid me, as by my books, $i22.75; and also the Lucindl' Taylor mortgage should be paid at once. I find, on.inquiry of S.& T., that all other parties bave secured their interest; and, as my business through them to you bas been far more than any other party, it would seem that I should not be left in arrears. Am hoping all now behind will surely be closed out this month, and no fail. Send drafts as soon as any is collected, not waiting for all at one time, as I am yet in at our bank. I llope you will notify all parties whose mortgages become due May 1st next tbey must be ready in tiIlle. or the mortgages will be foreclosed. There is no use dallying along. . Men must pay whendue." . Theseletters show that Kent expected Creighton to urge collection, to receive the money, and to forward it to him. Bearing in mind that the bonds and mortgages were by their terms made payable at the office of Smith & Tennant, Westfield, New York, it is clear that Creighton had no authority to demand or receive payment thereon unless so authorized by Kent himself; and as it clearly appears that Kent expected Creighton to collect and remit the interest as it fell due, and to push all delin.
KENT fJ. CbNGDON.
procurement of the loan,it may well be said that Creighton was acting quents, the only reasonable conclusion is that Kent had authorized him to collect the sums due, and to forward the same to him as collected. That such was the understanding of Creighton is shown by the faot that he sent demands for payment to the defendant and others. Thus it appears that on the fifth of May, 1885, he sent to the defendant Congdon a postal-card, saying: "Your loan of · $1,200 48 Interest, Was due May 1st, Int. thereon and exchange, ·
If paid before May 10th, .
"Please give prompt attention, "Yours, truly,
The testimony also shows that the defendant never had any correspondence with Kent in regard to the loan, the payment of interest, or the like, but that. Creighton sent him notice of the times when the interellt came· due, and the money therefor was sent to Creighton. When, therefore, the notice of the maturityM the loan was sent by Creighton,· the defendant was entirely justified· in that in demanding payment Creighton was acting in behalf of Kent. In the letter already cited of April 8, 1885, Kent had written Creighton to all parties whose mortgages became due May 1st next, they must be ready in time or the mortgages will be foreclosed," and the notice sent by Creighton to Congdon was only carrying out the press instructions given by Kent. In the same letter Kent instructs Creight(m to forward all sums as soon as collected, and not to wait until all should be collected. It is clear, therefore, that Kent expected Creighton to receive payment on his behalf oftha sumsdrie, and it was for the purpose of having the payments made to him that Kent directed Creighton to notify all, whose debts matured on May 1st, that they must paypromptly; Congdon's debt matured at that date, and in making payment to Creighton he did just what Kent expected and wished him to do. If, according to the contention of complainants, it should now be held that Congdon made thepayinent to Creighton at his peril, because the oond was, by its terms, payable at Westfield, New York, or for the rea, son that Creighton had not possession of the bond and mortgage,: this would be a fraud upon the defendant, for the reason that he was induced to make payments to Creighton by the conduct of the creditor... Having in fact authorized Creighton to make collections· on tllese daims, and having, by the mode of conducting the business, authorized the defendant to believe that the condition in the bond, that payment was to be made at the Gflice of the brokers in Westfield; New York, was waived, and that he (Kertt) recognized payments made to Creighton as properly. made, and having in fact expressly directed· Creighton to make demand for payment of the debt due from Congdon, with others, maturing May
1,1885, he cannot be permitted to claim that payments ma,de to Creigh.. ton were unauthorized, and therefore at the risk of the debtor. The evidence sustains the plea of paYUlent, and consequently the bill must be dismissed at cost of complainants'.
BRIGHTON MANUF'G Co. v. READING FIRE lNs. Co.
(Circuit Court, N. D. Illinois. July 25,1887.) ,
INSURANCE-CONDITIONS-INCREASE OF RISK.
A policy of insurance contained a clause that if the was $ncreased with the knowledge of insured, and without notice to thecotnpany, the policy should be void. _ A manufacturin/f company' stopped worlltfor a few days, cotton being high, andl repaired Its machinery meantime, Whereby no use could be made of a steam-pump and hose, connected with the engine, in case of fire. The policy permitted stappage:for repairs. HelrJ" that there was no increase of risk by thiil temporary stoppage.
SAME-CONl>ITIONS-VACANT AND UNOCCtTPIED PREMISES.
A policy ofinsurance provided that iI the building insured became vacant and unoccupied. without the knowledge and consent of the company, the pol· icy should be void. Defendant, a manufact;.Jring company, temporarily stopped work, and repaired its machinery, the night and day watchmen were on duty, and the employes were at and :about the factory from its closing until it burned. Held, that the building was in no sense vacant and unoccupied.
At Law. Suit to recover on a fire insurance policy. ,; The Brighton Manufacturing Company, plaintiff, sued the Reading Fire Insurance Company for loss by fire. E. 'W. RU88eU, for Gary, Cody &:Garyand Fred'k Ullman. for defendant. BLODGETT, J. This is a suit upon a policy issued by the defendant company, insuring the cottou manufactory and the machines therein owned by.the plaintiff, situate in the south-western portion of the city of Chicago, for the sum of $1,500, from the twenty-third day ofFebruary, 1885, to the twenty-third day of February, 1886. The factory and machinery covered by the policy were destroyed by fire on the sixteenth day ofJuly, 1885,and the loss was substantially total. The facts in the case as they appear from the proof are briefly these: The plaintiff was the owner of the factory and machinery in question, and in possession and operating the same, up to the first of May, 1885, when the same was leased to W. S. Baker and Thomas Kelley, for the term of one year from that date. Kelley and Baker entered into possession, and the leasing of the factory to them was duly assented to by the defendant. Baker and Kelley operated the factory up to the eighth ofJuly, when they stopped manufacturing, and discharged the most of the. employes.. The engineer, firemen, and the employes operating the spinning and batting machinery, were discharged. A portion of the employes connected with the dyeing-house, and some employes connected with the packing"room, were