54 Barb. 375 | N.Y. Sup. Ct. | 1867
By the Court,
This was an action to foreclose a mortgage. The defendant Spring was the mortgagor, and the other defendants his judgment creditors. The
It was claimed on the trial below, and so held by the court, that A. was the agent of both parties, and standing in that position he could not execute a mortgage as the attorney of one, for the benefit of the"other.
A party who is of capacity" sufficient to do an act himself • may do it by attorney. Of Spring’s capacity no question is made. The authority in this case was under seal.-
A contract made by one individual as the agent of both parties is not void, (14 John. 418,) but only voidable, at the election of the principal, if he come into court on timely application. (5 Vesey, 678. 4 Cowen, 718.) The-rule seems to be founded on the danger of imposition; and such agreements are regarded as constructively fraudulent. (9 Paige, 242.) It is not necessary for a party seeking to avoid such a contract to show that any improper advantage has been gained over him; it is at his
As between the plaintiff and the defendants, who are creditors, the equities are equal. In this case, however, the principal himself repudiates the mortgage; and if the defense is good as to him, being fatal to the mortgage, it is beneficial to the other defendants.
But the plaintiff" "insists that A. was not his agent or attorney) nor did he act as such in this transaction; that his instructions were to attach Spring’s property, which he wholly disregarded and ignored; that whatever A. did in this matter,.he did as the agent of Spring. I am unable to reconcile the facts with any such construction. The telegram constituted A. or his firm the attorneys and agents of Greenwood for the particular debt against Spring; and it was that telegram that caused A. to act in the matter of•securing such debt. It was A., the attorney at law, who set A., the attorney in fact, in motion, and produced the mortgage from his principal to his client.
In this view the* mortgage was voidable, and must be declared a nullity, unless the defendant Spring, by his delay, he deemed to have waived this defense. The mortgage was made June 15, 1855, and it came to Spring’s knowledge the next month. Ho steps were taken to set it aside. This action was commenced about one year after the date of the mortgage, and then this defense interposed. What is a reasonable time cannot very well be defined,
I am, therefore, of the opinion that.this defense of double agency is fatal to the validity of the mortgage.
The defendant further insists that the power to A. did not authorize him to execute a mortgage as security for a debt'or liability of his principal. The power contained a full authority “ to lease, mortgage, sell and convey any lands, and to make, execute and deliver good and sufficient contracts, deeds and conveyances &c., and to collect and receive all debts, dues, rents, accounts or other demands whatsoever that are or may be owing to us, or either of us, giving and granting unto our said attorney full power,” &c. The extent of the power, and the purpose for which it was given, must be determined from the instrument itself. It can neither be enlarged nor restricted by paroi. "When a power authorizes acts in respect to a particular trade, business or agency, paroi evidence of the usages of such trade, business or agency may be received for the purpose of interpreting the powers actually given. But such principle has no application to this case. It related to no particular trade, business or agency. The power to
But in this case the power to mortgage is given in express terms, and it is only as to the purpose for which the mortgage was given that it is claimed to be unauthorized. It may now be regarded as settled, in this State, even in case of a note made by an agent; that the party receiving it “ is bound to look to the power, and in so doing must take notice of its legal effect at his peril; he is bound to See that "the attorney does not go beyond his power by making and indorsing notes for the 'benefit of himself or persons other than his principal.” (Stainer v. Tyson, 3 Hill, 279. North River Bank v. Aymar, Id. 262; approved, Farmers and Mechanics’ Bank v. Butchers and Drovers’ Bank, 16 N. Y. Rep. 125, 139, 143.) “It is a general rule, that when an attorney does any act beyond the scope of his power, it is void as between the appointee and principal. The ground on which the rule rests is this: the appointee need not deal with the attorney unless he choose; if he do, he is bound to inspect the power, and shall be holden to understand its legal effect, and must see at his peril that the attorney do not go beyond it.” (3 Hill, 266.)
In. this case the plaintiff is not a bona fide holder for value: no new consideration was parted with by him as a condition for the mortgage; nor was any antecedent debt discharged. It was simply given as a security for a prior indebtedness, and that, too, after a refusal by the principal. The plaintiff is not, therefore, entitled to any consideration as an innocent bona fide holder of paper authorized by the principal, but perverted from its original purpose, by the agent. He holds his mortgage as security for an antecedent debt; he took it with full knowledge, as the law pré
The judgment must be affirmed.
C. L. Allen, James and Rosekrans, Justices.]