Megary v. Funtis — 7 N.Y. Super. Ct. 376

Majority

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Henry T. Megary, Administrator, &c., of Daniel M. Hogan, deceased, Respondent, v. Jacob G. Funtis and Wife, Appellants.

Headnote

The widow of an intestate, in an action brought by the administrator for the recovery of a debt due to the estate, is a competent witness. The suit is not for her “ immediate benefit ”—within the meaning of those words as used in the code.

A payment upon a bond or mortgage, made in good faith, to a son of the mortgagee, who is an attorney at law, and is in possession of the securities, is valid in law.

The debtor, in such cases, has a right to believe that the son has the requisite authority from his father.

But this presumption of authority ceases upon the death of the father, so that payments made to the son after that time, unless there is positive evidence of his right to receive them, are wholly void.

Judgment at special term modified accordingly.

(Before Sandfoed & Campbell, J. J.)

Jan. 12;

Feb. 14, 1852.

This was an action for the foreclosure of a mortgage given to the intestate, and for a sale of the mortgaged premises. The defendants were not the mortgagors, but had purchased and were the owners of the equity of redemption. The principal of the mortgage debt was not due, but the ground of the relief sought was, that one year’s interest, amounting to $98, was due and unpaid.

The defence was, that the mortgage debt, both principal and

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interest, was fully satisfied by different payments made by the defendant, Funtis, to one Thomas R. Hogan, a son of the intestate, and which he (the son) had full authority to receive.

The cause was brought to a hearing before the chief justice at a special term, in June, 1851. A number of witnesses on both sides were sworn and examined, and among other witnesses, Jane E. Hogan, the widow of the intestate, was introduced on the part of the plaintiff, and was objected to, on the ground that she had an immediate interest in the suit. The objection was overruled, and the counsel for the defendant excepted to the decision.

After argument the chief justice held that the defence was not established, and in July he made the usual decree for a sale of the mortgagéd premises.

The following are the facts found by him upon the evidence, and his conclusions of law thereon :

•In stating the facts of the case as they appeared at -the trial at the special term, I have not deemed it safe to rely on the evidence of the witness, T. R. Hogan, any further than his testimony may have been corroborated by other witnesses, or by the circumstances otherwise proved. His connexion with the case, and his conduct relative to it, show such a want of integrity, and the contradictions to various material parts of his evidence were so strong as to satisfy me that I could not safely rely on his sole assertion of any fact.

With this explanation, I consider the following facts to have been established on the trial, as far as it is material to state them.

T. R. Hogan was an attorney at law, and was employed by his father, the intestate, to draw the bond and mortgage in question, given by Cyphers. At the time of the execution of the papers, Cyphers was told by the mortgagee that he might at any time pay to his .son any sum of money on the bond that he might wish. The son deposited the mortgage in the register’s office, and delivered the bond to his father.

D. R. Hogan died on the 2d day of December, 1849. Shortly before his death, and while he was unable to do any business, his wife, without his knowledge, delivered the bond and mortgage to his son, T. R. Hogan, with instructions to get the year’s

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interest then due. The son applied to Funtis, the defendant (to whom, the mortgaged premises had in the meantime been transferred by Cyphers), and received from him the sum of two hundred and fifty dollars, which he endorsed on the bond as so much of the principal, and signed the name of his father to the endorsement. He paid one year’s interest to Mrs. Hogan, and retained the balance. He returned the mortgage to Mrs. Hogan, but kept the bond in his possession.

After the death of D. M. Hogan, and on the 4th day of January, 1850, the son received from Funtis the sum of $663, and endorsed it on the bond, signing the endorsement in his own name ; and subsequently he received from the defendant various small sums, for which no receipts or vouchers appear to have been given, which, together with a note for two hundred dollars, alleged to have been made by the defendant, are endorsed on the bond by Thomas R. Hogan, as in full of the same, and it was delivered up by him to the defendant.

On the trial, the bond was produced by the defendant, can-celled by the tearing off of the obligor’s name. The mortgage was produced by the plaintiff uncancelled, and apparently unsatisfied.

It did not appear that the death of D. M. Hogan was known to the defendant, at the time the bond was delivered up to him, or that he ever personally knew him, or that he had ever heard of the circumstances under which the bond and mortgage were executed by Cyphers, or of any verbal authority given by Daniel M. Hogan to his son, to receive any payment on the bond.

The plaintiff took out letters of administration on the estate of D. M. Hogan, on the 20th day of December, 1849.

On this state of facts my conclusion of law was, that the payments on the bond, made by the defendant under the circumstances, though made in good faith, were not valid, and could not be set up by him in discharge of the mortgage debt, or of the interest due on the 21st day of September, 1850.

The cause was now heard upon an appeal by the defendants from the judgment at special term.

C. Haring, for defendants.

R. E. Mount, for plaintiff.

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By the Court.

The widow of the intestate was a competent witness for the plaintiff, under the code of procedure. The suit was not prosecuted for her immediate benefit within the principle of Davies v. Cram, decided in this court, in December, 1850. The subject was fully examined in that case, and we see no reason to doubt that it was disposed of correctly.

The court below was indisputably right in rejecting the payments made to T. R. Hogan, after the death of the intestate. Whatever authority he had from the intestate, whether direct or inferential, had then ceased.

As to the payment of two hundred and fifty dollars, made in November, 1849, the case is very different. In the execution of the bond and mortgage, and making the loan, T. R. Hogan acted as the agent of his father. The mortgagor applied to him for the loan, and he paid over the money in behalf of his father. When the securities were executed, the intestate told the mortgagor, “ to pay the same ” to T. R. Hogan. And when the payment of two hundred and fifty dollars was made, the bond was in his possession, and he endorsed on it a receipt for that sum. It is true, there is testimony, that he had the posses-. sion of the bond wrongfully at that time, but if such were the fact, it did not affect the defendant, who knew nothing of the wrong, and who doubtless did know of his connexion with the loan originally. Again, it is said there was no evidence that the defendant knew of the intestate’s direction to the mortgagor, to pay the money to T. R. Hogan. We think it is fairly inferable, from the circumstances, that he did know it, and if he did not, he certainly, as the principal debtor, succeeding to the mortgagor’s liability, is entitled to the benefit of that direction in support of a payment made in good faith. He is not to be deprived of the benefit of a fact, which goes to sanction the payment, merely because he was at that time ignorant of that fact.

Without reference to the authority thus given to T. R. Hogan, the possession of the securities at the time of the payment, coupled with his connexion with their inception, his office as an attorney at law, and his relationship to the intestate, was quite sufficient to warrant the defendant in making the payment to

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him in November, 1849. The law on this subject was fully discussed in Williams v. Walker, 2 Sand. Ch. R. 325, and we adopt the conclusion, there enforced, as to the extent of the authority to be inferred from an agent’s or attorney’s possession of the securities. According to that conclusion, the payment in November, 1849, was valid, irrespective of the original direction to the mortgagor, and with that fact added, it seems to us that there is no room for doubt.

With the principal then paid, the defendants paid the interest which had accrued on the same, from September 21,1849. The year’s interest, due on that day, had been paid, as is admitted in the complaint, and as was proved. There was therefore unpaid, eleven hundred and fifty dollars, with interest, from September 21, 1849. The judgment entered must be modified so as to direct the collection of that amount with the plaintiff’s costs in the court below. Neither party is to have costs as against the other on the appeal.