The action was brought to foreclose a mortgage made by the defendants Collins to the plaintiff to secure by its terms the payment on demand of twenty-two thousand dollars according to the condition of a bond made by the mortgagors of date April 13, 1888. The purpose of the mortgage was to raise money to enable the defendant Theresa B. Collins, to proceed in the erection of houses upon the mortgaged premises of which she had the title. The plaintiff advanced to the defendant only three hundred and fifty dollars in money. Mrs. Collins afterwards conveyed the premises to the defendant Tilney. The plaintiff claimed and the referee found that the amount of the principal sum secured by and due on the mortgage was five thousand three hundred and fifty dollars, and the controversy relates to the claim of the five thousand dollars. The defendant, Jeremiah J. Collins, was the husband of Theresa, and as her agent, had charge of the work of construction on these and other premises of houses, which had, at the time the mortgage was made, progressed to considerable extent, and for that purpose he had on her behalf purchased materials from Hobby Doody. The evidence on the part of the plaintiff tended to prove that at the time the mortgage was prepared at the office of the plaintiff the amount then due from Mrs. Collins to them was agreed upon between her *Page 188 husband and Mr. Doody as five thousand dollars, and it was then understood it should be paid by the plaintiff or an assignment of it taken by him from Hobby Doody, and that such sum should be a part of the amount secured by the mortgage. This was contradicted by the evidence of the husband, and the referee found that on the thirteenth day of April, in the presence of the plaintiff, it was mutually agreed between the defendant Jeremiah J. Collins, as the agent of his wife, and Doody that there were due his firm of Hobby Doody from the wife five thousand dollars; that the plaintiff, relying upon such agreement, purchased from that firm their claim against her and paid them therefor five thousand dollars; that on that day it was agreed between the plaintiff and Mr. Collins, as agent for his wife, that the plaintiff should make to her a loan of $22,000 to be secured by her bond and a mortgage upon the premises, the amount to be advanced as the buildings progressed, except as to the five thousand dollars assigned to the plaintiff by Hobby Doody, which should be part of and included in the consideration of the bond and mortgage; and that pursuant to such agreement the bond and mortgage were on that day prepared. They were on the same day executed by the defendants Collins and delivered to the plaintiff. The defendant, Mrs. Collins, was not personally present at the time such agreements were made, and so far as appears had no knowledge of them at the time she executed the mortgage. And presumptively she was not chargeable with any arrangement made by her husband in respect to the purpose for which the mortgage was given other than such as was imported by its terms. (Gilbert v. Deshon,107 N.Y. 324; Craver v. Willson, 14 Abb. [N.S.] 374;47 N.Y. 673; Bank of Albion v. Burns, 46 id. 170; Smith v. Fellows, 9 J. S. 36.)
The mortgage purported to have been given to secure the payment of a sum certain which Mrs. Collins had by the bond undertaken to pay the plaintiff. And the husband without some authority from her to do so, could not by having the possession of the mortgage and delivering it, charge by it her *Page 189 premises with anything other than her debt. She testified on the subject that she signed the mortgage with the understanding that the money secured by it, amounting to $22,000, was to be drawn as required to finish the buildings. That evidently was substantially the purpose of the mortgage, and it was intended to secure whatever up to such sum should be advanced on that account by the plaintiff. The husband was the agent of the wife in attending to the work of construction, purchasing and paying for the materials and making use of her money for that purpose. And in that agency was the authority to settle with parties who had performed work upon or furnished materials for the buildings and adjust the amount due them from the wife. (Anderson v. Coonley, 21 Wendell, 279.) This is what the referee found he did with Hobby Doody. The payment of the amount due them may be treated as within the purpose for which the husband was authorized to raise money upon the mortgage; and if the plaintiff had upon the adjustment of the amount owing to those parties advanced it at the request of the husband as the agent of his wife it would have fairly been within the security contemplated by the execution of the mortgage. But is that the situation presented by the evidence and findings of fact? This inquiry is rendered material by the finding of the referee that the amount then actually due from the plaintiff to Hobby Doody was only three thousand nine hundred and twenty dollars and seventy-six cents. The plaintiff did not advance the money to pay the debt due to them, but advanced it to obtain an assignment of their claim to himself pursuant to arrangement with the husband. It was not within the scope of authority of the latter as the agent of his wife to adjust the amount due those persons for the purposes of an assignment of their claim to the plaintiff and, therefore, the wife was not estopped from questioning the actual amount due upon it. (Bickford v. Menier, 107 N.Y. 490.) The plaintiff, having advanced the money not to pay the debt, but to obtain, which it seems he did, an assignment of it, stood in the same relation to Mrs. Collins in respect to the claim as had his assignors *Page 190 before the transfer to him; and it was subject to the like inquiry by her into the amount due upon it, as if it still had been held by them. The adjustment of it with them by the husband at a specific sum it seems, was erroneously made and was subject to review and correction.
These views lead to the conclusion that the judgment should be reversed and a new trial granted, costs to abide the event, unless the plaintiff stipulate to deduct from the recovery one thousand and seventy-nine 24/100 dollars and interest, upon the sum so deducted, from April 13, 1888, and in that case the judgment be so modified and as modified affirmed without costs in this court to any party.
All concur.
Judgment accordingly.