Opinion
April 21, 1938.
May 9, 1938.
Principal and agent — Mortgage-Payment of money to agent — Execution of bond and mortgage in blank — Fraud — Two innocent persons.
1. A principal who delivers a bond and mortgage executed in blank, together with settlement papers similarly executed, to his agent entrusted with all the negotiations to procure a loan, is bound by the delivery of the mortgage and the payment of the mortgage money to the agent, notwithstanding the agent's misappropriation of the money. [336]
2. Where one of two innocent persons must suffer loss by reason of the fraud of another, the loss must fall on him by whose act the wrongdoer has been enabled to commit the fraud. [336]
Argued April 21, 1938.
Before KEPHART, C. J., SCHAFFER, MAXEY, DREW, LINN, STERN and BARNES, JJ.
Appeal, No. 210, Jan. T., 1938, from decree of C. P. No. 4, Phila. Co., Sept. T., 1937, No. 5385, in case of Paul Gramigna et al. v. The Board of Ministerial Pensions and Relief of United Presbyterian Church of North America. Decree affirmed.
Bill in equity.
Preliminary objections sustained and decree entered dismissing bill, opinion by FINLETTER, P. J. Plaintiffs appealed.
Error assigned was final decree.
Samuel King, with him Edward B. Duffy, for appellants.
Roland C. Heisler, with him Drinker, Biddle Reath, for appellee.
This appeal raises the issue whether a principal who delivered a bond and mortgage executed in blank, together with settlement papers similarly executed, to his agent entrusted with all of the negotiations to procure a loan is bound by the delivery of the mortgage and the payment of the mortgage money to the agent, notwithstanding the agent's misappropriation of that money. "Where one of two innocent persons must suffer loss by reason of the fraud of another, the loss must fall on him by whose act the wrongdoer has been enabled to commit the fraud": Mielcuszny v. Rosol, 317 Pa. 91, 96. The court below correctly so held.
Decree affirmed, costs to be paid by appellants.