Foley v. German Lehigh Building Ass'n

Opinion by

Kephart, J.,

The appellant can only recover the amount claimed in her statement and in the manner pleaded. She was the owner of a property situate in Philadelphia, which was subject to a first mortgage of $3,000 and a second mortgage of $1,700. She applied to the appellee for a loan of $1,000. This application was made through the appellee’s conveyancer and the money could be paid out only on his recommendation. She could not select any one to do the things necessary to secure the loan except one of the conveyancers designated by the company, and Otterstetter, a conveyancer, was directed by the company to take charge of this loan. It was a part of his duty, under the testimony, to see that the liens that were to be paid off by the loan were in fact paid off. For this purpose the warrant or order was endorsed by the appellee to the conveyancer. The written direction to the conveyancer to receive the money did not change his position with the company. The conveyancer was the agent of the appellee and responsible to the appellant for any negligent act, misuse or misapplication of moneys and for any damage that might flow from such conduct. No money would be paid to a borrower by a conveyancer which might imperil any loan. The appellee kept its hand on the money loaned, either through one of its executive officers or some one who stood in such position that anything he might do would be regarded as the association’s act. Its chief concern was that its lien should have the place on the record that the borrower engaged to give it. The appellant secured a loan of $1,000. She had arranged to pay the second building and loan mortgage, which, by crediting the value of some stock *216owned by her, was reduced to $698.39. The amount nec- . essary to satisfy this mortgage was retained by the conveyancer. He had been designated to receive it and satisfy the second mortgage. The conveyancer appropriated the money and absconded; the second mortgage was not paid. The appellant having defaulted in the payments on account of this mortgage, an execution was issued and the appellant’s property sold for $1,200, subject to the lien of the first mortgage. There was appropriated by the sheriff to the second mortgage from the sale of the property $977.98. The amount now claimed to be due on this mortgage was considerably more than this figure. The difference between the amount paid on this mortgage and the selling price represented costs, water rent and taxes. ' The appellee received nothing from the sale on the mortgage of $1,000. The appellant also defaulted in the payments due on this third mortgage, representing the appellee’s loan. We cannot determine how the appellant regarded the transactions when she discovered the second mortgage still existed against her property. Prior to her application to the appellee she regularly met all charges against her and it may be when she knew she had been defrauded of her money, with three mortgages to pay, she regarded the situation as hopeless and permitted water rents and tax levies to accumulate, as well as the finés and charges due on these mortgages. However, her property was sold on the lien the appellee was to remove and through the malfeasance of its officer the plaintiff’s property was swept away from her. She here sues to recover the sums of money that the appellee should have paid on the second mortgage and fixes that sum as her loss. The action is assumpsit. She does not ground her action on the damages sustained for the malfeasance of the appellee’s officer, nor fix her damages at the value of her property less what ought to have been the lawful encumbrance against it and such other damage she might have suffered. The price paid at sheriff’s sale may or may not *217have been the value of the property. She claims only the sum of money that should have been paid to the second mortgagee. She sues for the fulfillment of her contract. On this phase of the case, she undoubtedly was entitled to performance by the appellee. It should have paid the second mortgage and that not having been done, she is entitled to the money retained by its officer, $698.39; but assuming that she is so entitled to the money she would then owe the appellee the amount due on the bond and mortgage. She cannot escape her liability on the bond and mortgage when she receives from the appellee the money therein stipulated. Had the conveyancer paid to her directly all the money in the first instance and permitted the record to stand as it did stand at the time of the sheriff’s sale, the appellant would have owed the amount as found at the time of the sheriff’s sale to be due on the second and the third mortgages. If later on, or in this present action, she receives the full amount of this loan, the bond and mortgage will be an effective claim against her. We then have the judgment recovered in this action due from the appellee to the appellant and the sum due on the bond and mortgage from the appellant to the appellee. But it is urged that the appellant should have appeared in the court below and by petition have asked that the judgment on the bond be opened and that the amount of said judgment be reduced by whatever sum was found to have been due to this appellant. It was not necessary to follow this practice. The appellant could insist on the performance by the appellee of its undertaking. It had secured from her a bond and mortgage which called for the payment of $1,000 at a future time. In return the association was to give her $1,000. She stands on her undoubted right to receive the sum of money called for in that mortgage. She might have gone into the court below and asked that the judgment be reduced, or dis-affirmed her contract entirely. She did not wish to do this, but wanted the contract performed as originally *218contemplated. She wanted the money for which her property stood as security and which she contracted to get, and the appellee having failed to give her the full amount, she could treat her bond and mortgage as valid and sue to recover the balance. The appellant’s right of action was not, as urged by the appellee, barred by the bond and mortgage. The amount due thereon was not regarded in the appellee’s answer as a set-off, but the bond and mortgage were submitted in bar of the action. However, as we here determine, the appellant is entitled to judgment in this action for the amount claimed in the manner pleaded, when an effort is made to collect, it will be met with the claim of the appellee of the balance due on its loan with interest. It may be, when a calculation is made, that the appellee will not be indebted to the appellant. This can be worked out in the court below. In conclusion we may say that we are not impressed with the appellee’s argument that it was induced by fraud to lend the amount of money that it did on this property, nor do we consider the appellant’s failure to answer the attachment as conclusive. The court below correctly determined the question at the trial, but was led into error in concluding that the appellant was compelled to proceed through the bond.

The judgment of the court below ,is reversed and the record remitted with direction to enter judgment on the verdict.