Spalding v. Heideman

Mr. Justice Waterman delivered the opinion of the court.

It is a.fundamental duty of an agent to obey all reasonable and lawful instructions given to him by his principal; and this although the agent may think he knows of a very much better way. If the agent disobeys instructions' given to him, and because of such disobedience, loss or injury come to the principal, the latter may recover from the agent such substantial damages as he has sustained by reason of such disobedience. Mechem on Agency, Sec. 473-4.

Father Heideman having exceeded the authority given to him by Bishop Spalding, and thereby charged the bishop's property with liens amounting to several thousand dollars and quite likely involved the bishop in a large personal liability, was responsible to the bishop for all costs and .expense he was put to by reason of such disobedience.

In the sworn answers made to the cross-bill the bishop and Father Heideman state also that the latter was personally liable for the mechanics’ liens resting upon said church. It was therefore entirely proper that Father Heideman should secure the bishop against the consequences of his disobedience. By so doing he was not only endeavoring to make the bishop whole, but to have his personal obligations to the parties who held the mechanics" liens discharged. The liens upon the bishop’s property created by .the acts of Father Heideman, as well as the undertaking of the bishop to satisfy such liens and thereby relieve Father Heideman of his personal obligation to the holders thereof, constituted an entirely sufficient and valuable consideration for the mortgage executed by Father Heideman upon his property.

In order to discharge the indebtedness resting upon the church the bishop placed a mortgage thereon. This was not necessary to the validity of the mortgage executed by Father Heideman, but certainly did not impair it. Appellant urges that the mortgage executed by Father Heideman was given merely as security against the mortgage made by the bishop upon the church, and that if the bishop is not called upon to pay said mortgage, then he will have no right to insist upon the security given him by Father Heideman.

There is in the answer of the bishop and of Father Heideman a statement that the mortgage executed by the latter was made to secure the bishop against the mortgage by him made upon the church. If Father Heideman should come forward and out of his own means pay off and discharge the mortgage resting upon the church, there might be some reason for the contention that the mortgage made by Father Heideman upon his own property should be postponed to the lien of appellee’s judgment.

The present situation is that Father Heideman has not discharged any portion of the indebtedness for which the mortgage upon the church was given; that such mortgage is scant security for the indebtedness represented by it, and that Father Heideman is insolvent.

Appellee urges also that the contributions were made by the parish in which the church is located, toward its erection, and that if the parishioners by further contribution shall discharge the mortgage on the church, then the bishop will have in. equity no right to insist upon the mortgage given to him by Father Heideman. If the parishioners see fit to pay off the mortgage given by Father Heideman, they have the right so to do, and in that case the lien of appellee’s judgment will not only be operative but valuable. If the parishioners see fit to pay off the incumbrance made by the bishop upon the church, they will not only be doing what they have a right to, satisfying the bishop’s debt, but not contributing anything to appellee, nor giving her any right in a court of equity to insist that her judgment lien shall take precedence over the mortgage which the bishop holds.

Appellee in her cross-bill called for an answer under oath by the bishop and Father Heideman, and they have so answered. Such answers unequivocally deny any combination or confederation against appellee, as well as any and all attempt to secrete anything from her, or put anything out of the reach of her judgment. Hor is there in the entire record of this case anything which shows that the bishop in obtaining his mortgage upon Father Iieideman’s property did anything that he was not fully warranted by the law in doing.

True it is that the mortgage made by Father Heideman was executed five days after appellee commenced her suit against the latter. The bishop under oath denies that'at the time of such execution he had any notice that she, had begun such suit, and states that the mortgage was made in pursuance of a previous arrangement, and without any reference to any claim of or indebtedness to appellee. If it were the case that the bishop and Father Heideman, being informed of the commencement of appellee’s suit, had, for the purpose of giving a preference to the bishop—that is, of securing the payment of Father Heideman’s obligation to the latter in preference to paying appellee—had the mortgage to the bishop executed, it would not have given appellee a right to have the lien of such mortgage postponed to that of her judgment. Father Heideman had a right at the time he executed this mortgage to prefer one creditor over another. He seemed to have preferred to secure the bishop, and thus get rid of his obligation to the parties who held the mechanics’ liens, rather than to pay appellee. This was his right, as it was the right of appellee, if she could, to induce him to prefer her and give her a mortgage instead of the bishop. The bishop in obtaining his mortgage and appellee in securing a judgment as soon as possible, each proceeding under their lawful rights. In a pecuniary point of view the bishop has been more successful than appellee, but he has not proceeded any more lawfully.

The decree of the Circuit Court foreclosing the mortgage made by Father Heideman to the bishop is affirmed. So much of the decree as postpones the lien of such mortgage to that of the judgment of appellee is reversed. And the cross-bill of appellee is dismissed. Affirmed in part and reversed in part.