17 D.C. 421 | D.C. | 1887
delivered the opinion of the Court:
In the case of Robert Balloch vs. William R. Hooper and the Massachusetts Mutual Life Insurance‘Company, the record sets forth a somewhat elaborate statement of fact and several questions of law, all of which were considered and discussed by counsel, but which it is not necessary, in the view we have of the case, for us to consider.
Briefly stated it appears that Balloch had purchased a tract of land in Washington, which was laid off in lots, with
Whatever the agreement was it is manifest that the conveyance was in some way to stand as a security, because Balloch .conveyed to Hooper more than the land included in the trust to the insurance company. We think that transaction clearly indicates that there must have been a contract or understanding that this conveyance was to be regarded as some sort of security. Had Balloch’s purpose been merely to give up the enterprise he would not have
The answer of the company states that it did not know of it until a little more than seventeen months afterwards. The houses for some time after this last .conveyance still remained unfinished. Thereupon Hooper, being without the means to do so, applied to the insurance company to carry oil the building enterprise to completion. He undertook, if the company would supply him with the money, to step, as it were, into Balloch’s shoes'and finish the houses. The result was that the insurance company then agreed to- deliver up Balloch’s notes and execute releases of the deeds of trust on the property, and advance further moneys for the finishing of the work; all of which was accordingly done, the company taking Hooper’s note for $71,000 to secure its past and future advances. It appears that besides the money previously advanced to Balloch it cost some $20,000 to finish the houses. Balloch says the agreement was that they were to be finished on his account, and that this expenditure of $20,000 was greatly in excess of what the houses should have cost and. that he is entitled to an account and to have his agreement with Hooper carried out.
' Now, on such a transaction, what are the rights of the parties? It appears that Hooper did not communicate with the company that he proposed to buy on its account; it knew nothing about it for seventeen months, and he took the title to himself. In such a case as that there can be no application of the ordinary principles of agency or trust.
It results that the insurance company was a stranger to the contract between Balloch and Hooper. It is not shown that it was even aware of the terms of the contract; all that it did was to release its original trust from Balloch and take Hooper as the debtor, which might well be done because the land was bound for the whole of the debt. Hooper took the property from Balloch subject to its being swept away from him by a foreclosure of that trust. In such a situation he undertook to become personally liable for the debt by giving the note for $71,000.
We do not perceive that there is a legal or equitable connection established with the insurance company so as to show a trust on its part for the benefit of Balloch. If that is the case it is entirely immaterial whether these houses cost an extravagant and even a fraudulent price or not. That does not concern Balloch; it is a matter which lay between Hooper and the insurance company. Hooper is a principal, and if he borrowed $20,000 for this purpose unnecessarily, and unnecessarily expended it, or even was
The decree below is affirmed.