DeTurck v. Matz

Citations

• 180 Pa. 347
• 36 A. 861
• 1897 Pa. LEXIS 927

Syllabus

<p>Fraud — Liability where one of two innocent persons must suffer.</p> <p>Where one of two innocent persons must suffer in consequence of the fraud of a third, he whose employee the fraudulent agent was must suffer rather than the other.</p> <p>Principal and agent — Mortgage—Fraud.</p> <p>B. was the general agent of T. in the management of her estate. He collected moneys for her, made investments at his discretion, kept balances in his own bank account, and accounted to her from time to time. Having embezzled some of the funds he covered up the deficiency by procuring a mortgage from M. to T.,which he handed over to her. M. had bought a house from K. and needed money to pay the balance due on it. He executed the mortgage in question and delivered it to B. who placed it upon record. B. did not pay any money but promised to pay it to K. in a few days. He putK. off, and never paid any money on account of the mortgage. Subsequently M., without knowledge that the money had not been paid to K., paid the first instalment of interest toB., as agent for T. B. died before the fraud was discovered. Held, (1) that B. was the agent of T. and not of M.; (2) that T. was bound by the acts of B. in connection with the mortgage, and that these were within the scope of his apparent authority; (3) that even if B. exceeded his authority, T. could not avail herself of the benefit of his acts, and at the same time repudiate his acts, declarations and representations; (4) that M. was not estopped from alleging a want of consideration for the mortgage; (5) that in law and in fact no consideration for the mortgage had passed, and T. could not recover from M.</p>