Henry v. Wilkes

Henry v. Wilkes. Ratification. If one who is hound to satisfy a mortgage, borrow the money for that purpose, falsely assuming to act as agent for the owner of the equity of redemption, the latter is in no wise responsible, though the money he appropriated in discharge of the mortgage, of which he had the benefit. Appeal from the general term of the Supreme Court, in the first district, where a judgment entered in favor of the defendant, upon the report of a referee, had been affirmed. This was an action by Elizabeth V. Henry, assignee of Elizabeth Henry, against Charles Wilkes, to recover a sum of $2080, alleged to have been loaned by plaintiff’s assignor to the defendant, through his alleged agent, Henry Wilkes, and to have been applied by said agent to pay off a mortgage on certain lands in New York city, the property'of the defendant, which, by an agreement between Henry Wilkes and the defendant, was to be paid by the former. The case was tried before a referee, who found that on or about the 28th January 1847, Elizabeth Henry, the plaintiff’s assignor, advanced and paid to Henry Wilkes, claiming to act as the agent for the defendant, the sum of two thousand and eighty dollars ($2080). That the said Henry Wilkes had no authority to receive or borrow the said sum of money for the defendant, and that the defendant never requested the advance of such sum, or any part thereof, nor sanctioned or ratified such advance, or the request of Henry Wilkes that the said Elizabeth Henry should advance the said sum of money to the'defendant. That the said Henry Wilkes used and applied the said sum of money, with the knowledge of the said Elizabeth Henry, but without the request or knowledge *of the ' defendant, for the purpose of paying off a mortgage on certain lands and premises in the city of New York belonging to the defendant. That the said Henry Wilkes, by reason of a valid agreement between him and the defendant, had assumed and was bound to pay the said mortgage, and, in paying the same, paid his own debt. That the said Henry Wilkes paid to the said Elizabeth Henry, in two several payments, out of funds of the defendant, the sum of $145, as and for the interest on the said sum of $2080 claimed to have been advanced by the said Elizabeth Henry to the defendant ; but that such payments were never authorized or ratified by the defendant. That the said defendant had not paid to the said Elizabeth Henry the said sum of $2080, nor any part thereof, nor any part of the interest thereon. And that the claim had been duly assigned to the plaintiff. And he found and reported, as matter of law, that the defendant was not indebted to the plaintiff in any manner or form, by reason of the matters and things in the complaint alleged. And he also decided, as a conclusion of law, that the defendant was entitled to judgment against the plaintiff for his costs and disbursements. The plaintiff duly excepted to the findings of the referee. The exceptions taken on the trial are fully stated in the opinion. Judgment having been entered in favor of the defendant, in accordance with the findings of the referee, and the same having been affirmed at general term, the plaintiff took this appeal. Tremain, for the appellant. Parker, for the respondent. Also reported in 5 Trans. App. 204. See Fitzhugh v. Sackett, 50 N. Y. 699. [MAJORITY — Miller, J.] Miller, J. (after stating the case.)—It has been held in numerous cases, that the finding of a referee upon questions of fact presented upon a trial, cannot be reviewed in this court. (Macy v. Wheeler, 30 N. Y. 231; * Young v. Davis, Id. 134; Sandford v. Eighth Avenue Railroad Co., 23 Id. 343; Hoyt v. Thompson, 19 Id. 207, 212; Oldfield v. New York & Harlem Railroad Co., 14 Id. 310.) We cannot, therefore, examine the facts determined in the subordinate courts, if they are covered by the findings of the referee. It is claimed, however, that the referee does not find against the plaintiff, as to the fact that the defendant had the benefit of the money loaned to Henry Wilkes; and, therefore, he is liable to account for it to the plaintiff. The money was applied to the payment of a mortgage upon the defendant’s real estate, but it being received by another party, and applied by him in the payment of a debt, which that party was bound to pay, it does not necessarily follow, that the plaintiff can maintain an action to recover it of the defendant. The finding of the referee, that Henry Wilkes, claiming to act as the agent of the defendant, obtained the loan and applied the money to pay an incumbrance upon the defendant’s land, which Henry was bound to cancel, does not, of itself, necessarily and absolutely raise an obligation upon the part of the defendant to refund the money, because he was benefited by the discharge of the mortgage. The defendant was a stranger to the transaction, and had no lot or participation in it. The money was not paid to him, but to Henry Wilkes, and he had no knowledge in regard to it, at the time it was obtained,. or when it was appropriated. The mortgage was can-celled, without his privity or procurement, and the money used in procuring its satisfaction was never received by the defendant at all. So long as Henry Wilkes was obligated to pay the mortgage, it was of no consequence to the defendant, of whom he obtained the money, provided he acted without the authority or knowledge of the defendant. Nor was the defendant under any obligation to pay the demand, because the money was obtained by a fraudulent misrepresentation, so long as he did not assent to it. The party procuring it was not in any sense his agent in the transaction, and the facts found do not present a case of money received by the defendant in payment of an antecedent debt. differ entirely from a *case where goods are purchased fraudulently, and pass into the hands of a bond fide creditor in payment of a preexisting debt. (Root v. French, 13 Wend. 570.) In the latter case, the party was prosecuted for the goods thus procured, and the proceeding isagainst the property as well as the person who has it in possession. Here, the money has been applied, withojit the knowledge of the defendant, and he has had no connection either with its procurement or its application. He was entirely innocent of any knowledge of the circumstances under which it was obtained, and the mortgage was discharged in accordance with an obligation by Henry Wilkes, without his instigation or request. It is difficult to see how there can be any relationship between the defendant and the plaintiff's assignor, which imposes a legal liability upon the defendant. I am not aware' of any principle of law, which authorizes this court to adjudge, that, without privity, possession of the property, knowledge of its being received, or any act showing connection with the matter,, an implied obligation can arise against an innocent party, which will sustain an action like the one now presented for our consideration. To do so, it seems to me, we would be obliged entirely to ignore the well-settled rule, that when one of two innocent persons must suffer from the fraud of a third, the one shall suffer who, by indiscretion, has enabled such third person to commit the fraud. It is said, that- the referee erred in admitting evidence, upon the cross-examination of Henry Wilkes, of an agreement between him and the defendant, that as between them, Henry Wilkes was to pay the mortgage upon the defendant’s property. I think, that the testimony was competent, for the purpose of showing that the money was paid for the benefit of Henry Wilkes, and to cancel an obligation he had assumed, as well as for the purpose of rebutting any presumption which might arise from the facts proved, that Henry Wilkes had any authority from Charles Wilkes to borrow the money, or to appropriate it to the payment of the mortgage. The question in the case was, whether the money was loaned to Henry Wilkes or Charles Wilkes. To *establish that-it was loaned to the defendant, the plaintiff had proved, that it was used for the purpose of paying off a mortgage upon the property belonging to the defendant, thus primd facie showing, in connection with the acts and declarations of Charles Wilkes, a liability on the part of the defendant. These facts, I think, made it entirely competent to prove, that by the agreement between the parties, the mortgage was the debt of Henry Wilkes, and was to be paid by him and not by the defendant. The proof of the plaintiff necessarily led to this inquiry and opened the transactions between the parties, and the evidence introduced threw light upon the question in controversy. And even if it did not establish that no loan actually was made, yet, with conflicting and contradictory testimony as to the principal issue which was litigated upon the trial, it certainly had an important bearing upon the subject. For reasons of a similar character, and as a part of the transaction between Henry and Charles Wilkes, which had been opened by the plaintiff’s testimony, it was competent to prové mutual dealings between these parties. The letter from the defendant to Henry Wilkes was also evidence as to a portion of the transaction, and-tended to establish that Henry Wilkes had acted without authority in making the loan. It was a portion of the correspondence between the defendant and Charles Wilkes, and showed a state of facts irreconcilable with the idea that the defendant ever gave any authority to Henry Wilkes to boi*row the money for him. It is insisted, that the referee erred in allowing the defendant to cross-examine the witness, Henry Wilkes, in regard to the papers in the suit brought by the plaintiff against him, to recover the same money for which this action was instituted, and as to the contents of the letters written by him to the defendant, without first producing the papers and showing them to the witness. The witness denied making the statements in the papers in the suit specifically asked about; no evidence was then introduced to show that he had, and the papers in the action were put in evidence in a subsequent *stage of the case, by the plaintiff, when the same witness was again interrogated on the subject. The witness did not remember particularly as to the contents of these letters, and they were also introduced upon the examination of the defendant. One of the reasons of the rule requiring the production of papers, under such circumstances, is, in order that the court maybe possessed of the whole; and if any error was committed by the referee in his ruling, I think, it wa-s entirely obviated, by -the introduction <3f the papers afterwards. I do not see that any injury could result to the plaintiff, or advantage to the defendant, by their non-production at an earlier period.. I think, that no error was committed by the referee upon the trial of the case, and that the judgment should De affirmed» Judgment affirmed.