217 Mass. 526 | Mass. | 1914
The power to borrow money or to execute and deliver promissory notes is one of the most important which a principal can confer upon an agent. It is fraught with great possibilities of financial calamity. It is not lightly to be implied. It either must be granted by express terms or flow as a necessary and inevitable consequence from the nature of the agency actually created.
It was said in Smith v. Cheshire, 13 Gray, 318, at page 320, “An agent who has authority to pay the debts of his principal, to disburse his moneys, to settle with his creditors, or even to bind him by a contract or agreement to pay money, is not authorized to sign negotiable paper by which his principal will be bound.” In Paige v. Stone, 10 Met. 160, at page 168, is this statement: “The power of binding by promissory negotiable notes can be conferred only by the direct authority of the party to be bound, with
There is no essential distinction in this respect between the power to borrow money upon negotiable instruments and the power to borrow money upon a credit manifested by non-negotiable obligations. It is an unusual and extraordinary authority. It is not commonly incident to the relation of principal and agent. The nature and extent of the results to the principal might be as disastrous in the one case as in the other. The substance is the borrowing of money upon the principal’s responsibility. The kind of pledge which is given for the money borrowed is incidental to the main matter. The burden imposed upon the principal is no different in kind nor greater in its extent when a negotiable promissory note is given by the agent than when a non-negotiable agreement to repay the money borrowed is given. In Warren v. Pazolt, 203 Mass. 328, 349, it was held that trustees in whom was vested the legal title to property and the duty of its management had not by inference the right to borrow money. A mere agent without express authorization can have no such power. Jacobs v. Morris, [1902] 1 Ch. 816. Bickford v. Mener, 107 N. Y. 490. Spooner v. Thompson, 48 Vt. 259.
The rule that a principal is held for acts done by the agent within the apparent scope of his authority is not in conflict with this proposition. The borrowing of money is not within the apparent scope of an agent’s authority unless directly granted or indispensable to the execution of the power actually conferred or approved by a long course of dealings of such nature as inevitably to have been brought home to the knowledge of the principal. See Ashley v. Dowling, 203 Mass. 311, 319.
The facts in the case at bar are that the defendant appointed Edward Dugan her attorney in fact by an instrument which authorized him "to sell, take charge of, and control any and all real estate and rights in real estate now or hereafter owned by me; to care for, and manage the same; to execute, acknowledge and deliver any and all deeds, or other instruments in writing which may at any time become necessary or advisable to convey the title thereof; to collect the interest and principal of any mort
The general power of attorney is couched in comprehensive terms. But no specific authority to borrow money is given. The agent is empowered to pay taxes, and respecting the subject matter has the full power which the defendant herself might have, with the further stipulation that the enumeration of specific powers does not cut down the general grant. But these words are used with reference to the powers expressly granted and
The agent did not assume to act under the powers of attorney which authorize the execution of mortgages on real estate. The first one expressly is confined to the power to execute “mortgage notes.” Manifestly the note in question is not a mortgage note. The power to execute “all promissory notes necessary in the premises” cannot be dissociated from the chief function of the other power of attorney, which was to execute mortgages upon real estate. It did not confer authority to execute promissory notes independent of a mortgage upon real estate. It is not necessary to inquire whether these powers of attorney authorize the borrowing of money on mortgage or simply to perform the technical acts necessary in case the principal should authorize borrowing by way of a mortgage.
It is not necessary to consider whether the plaintiff may have relief in equity under the doctrine of subrogation set forth in Newell v. Hadley, 206 Mass. 335. It follows that the plaintiff-is not entitled to recover upon any of the counts in his declaration. Foote v. Cotting, 195 Mass. 55.
The case comes before us upon an agreed statement of facts. It therefore is ordered that the entry be
Judgment reversed and judgment for the defendant.