Stephens v. Ahrens
Before: Sloss
Synopsis
Mortgages—Agency—Placing Money for Investment—Installment Loan—Foreclosure for Amount Actually Advanced.—Where a party placed a certain sum of money in the hands of a loan broker to invest in mortgages and some months later the broker made a loan, taking a note and mortgage in the amount of the balance in his hands and agreeing to advance the money to the borrower in installments as the construction of a building covered by the mortgage progressed, the broker was the agent of the lender, rather than the borrower, notwithstanding the latter paid him a commission; and where all the money to be secured by the note and mortgage had not been paid to the borrower by the broker at the time of the latter’s death, the mortgage could be foreclosed only for the sum actually received by the mortgagor, and, as between the lender and the borrower, the loss of the balance of the money held by the broker should fall upon the former.
Id.—Conditions of Loan—Authority of Agent.—An agent has authority, not only to do the things expressly authorized, but to do everything necessary or proper and usual, in the ordinary course of business, for effecting t'he purpose of his agency; and a loan broker, in exacting a condition that money loaned on a mortgage on land upon which a building was to be 'constructed should be advanced as the building progressed, was making a provision in the interest of the lender rather than the borrower, and acted within his implied authority.
• Id.—Determination of Amount Due—Suit in Equity—Judgment.— Where a suit to foreclose a mortgage was dismissed without prejudice because prematurely brought, the complaint alleging the exercise of an option to accelerate the due date for failure to pay interest, but the court having found that tender had been made of interest on the amount of principal actually received by the mortgagor, the mortgagee is not aggrieved by a judgment in. a separate suit in equity determining that the note and mortgage were valid obligations only for the amount actually received by the mortgagor.
SLOSS, J.
These appeals arise out of cross-actions based on the same transaction. The cases were tried together, and the evidence is brought up in a single bill of exceptions. Both actions and both appeals involve the rights of the parties under a note and mortgage made by Levi A. Stephens and Lulu B. Stephens, his wife, to Henrietta Ahrens, wife of Fred
[745]
Ahrens. For present purposes, we may proceed as if there were but one plaintiff and one defendant in each case, and shall therefore refer to the parties respectively as Stephens and Ahrens.
In January, 1914, Ahrens had placed four thousand dollars in the hands of one Gaut, a loan broker, to be invested in mortgages; one thousand eight hundred dollars still remained in Gaut’s hands in May of the same year. In the latter month Stephens applied to Gaut for a loan, to be secured by mortgage of a lot of land upon which Stephens desired to build a home. The loan was negotiated on May 26,1914, Gaut taking from Stephens a note and mortgage for one thousand eight hundred dollars, payable to Ahrens three years after date, with a provision authorizing the payee to declare the principal due on default in the payment of interest. Gaut arranged with Stephens that the money should not be advanced at once, but should be paid over in installments as the construction of the building progressed. The mortgage was immediately recorded, and it, with the note, remained in the possession of Gaut until his death, which occurred on September 14,1914. At that date Gaut had advanced to Stephens the sum of $1,125.90 on account of the one thousand eight hundred dollars covered by the note. The sum so advanced included payments on account of the building, together with charges for recording the mortgage, a commission to Gaut, and an installment of interest, figured on the face of the note, and paid by Gaut to Ahrens. Ahrens was not informed until after Gaut’s death of the arrangement for partial advancements to Stephens.
The real question is whether the amount due on the mortgage is $1,125.90, the sum actually received by the mortgagor, or one thousand eight hundred dollars, the amount placed by Ahrens in the hands of Gaut.
Ahrens
v.
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