Page:Federal Reporter, 1st Series, Volume 4.djvu/282

 268 TEDEBaii BEFOBTEB. �rial facts in the case are that when complainant origînally took the mortgage in question, it, by its agent, knew the state of the title of the mortgaged premises ; that in the erection of the building on the premises, in causing it to be insured, and in coUecting rents, and paying premiums and taxes, the defendant J. Y. Scammon dealt with the property as if it were his own ; and that the entire business conneoted with the loan from complainant, from the time of its original negotiation down to the time of the before-mentioned agreement in relation to the insurance, was transacted by the defendant Scammon. The evidence tends to show that he kept an aecount with the property on his bank ledger, in whioh rents received by him were credited; and that, either in this or in a separate aecount, moneys paid by him for insurance premiums were also entered. �It appears, f iirther, that the defendants Florence A. D. Eeed and Arianna B. Scammon knew nothing at the time of the insurance obtained upon the property, nor of the agreement in relation to the insurance money between their father and complainant, made in 1872. There is no doubt that when cpmplainant consented to the payment of the insurance money to Scammon, it was expected that it would be used in rebuild- ing, and that it was paid to and received by him in good faith for that purpose ; and there is evidence to the effect that the officers of the bank understood at the time that this money was placed in the bank in the character of a special deposit, and subject to the conditions of the agreement between com- plainant and Scammon. Further, it seems clear that Scam- mon was never expressly authorized by complainant to draw out or appropriate the money as he seems to have done. Indeed, the performance of the agreement, under which the insurance money was surrendered to Scammon and deposited in the bank, seems to bave been abandoned by both parties thereto, as it does not appear that the contract was at ail regarded by Scammon in the appropriation of the money, nor was it insisted upon by complainant, so far as the evidence discloses. �The two mortgagors, Florence A. D. Eeed and Arianna E. ����