Hostetter v. Giffen

Citations

• 268 Pa. 530
• 112 A. 150
• 1920 Pa. LEXIS 731

Syllabus

<p>Principal and agent — Mortgage—Assignment of leases to pay mortgage interest out of rentals — Construction by parties — Set-off —Mortgagee in possession.</p> <p>1. Where the owners o£ real estate subject to a first and second mortgage, assign the rentals to the holder of the second mortgage, and constitute him their attorney to manage the real estate, collect the rentals, and therefrom pay expenses, taxes and interest on the first mortgage, the agent cannot apply the rentals to payment oí the interest on his own mortgage in preference to that on the first mortgage. That is the plain meaning of the contract and the construction the parties put upon it.</p> <p>2. In such case, as the assignee of the rentals receives the fund, as agent and for a special purpose> he cannot assume the position of a mortgagee in possession, and set-off, against any part of the fund, the principal’s indebtedness to himself; the claims are not in the same right.</p>