Page:Federal Reporter, 1st Series, Volume 7.djvu/753

 PALMBR V. OALIi. 741 �authority. If he is a general loan agent, the limitation is that he muet keep within the usual and ordinary scope of the business committedto him. The borrower must deter- mine the extent of the authority by considering what is the nsual and ordinary course of that business. Is it within the usual and ordinary course for an agen* to take excessive interest in violation of the lavr? Such a practice is extra- ordinary. It is without the usual course of business- The natural and proper inference for the borrower to draw from the f act of the agent's proposing to take illegal interest, would be that in so doing he would be acting without the authority of his principal. It may be said that the principal is respon- sible for the frauds of his agent in the course of the business committed to him, even though the principal should be igno- rant of the fraudulent acts or should expressly prohibit them. Very true ; but in this case there are two innocent parties — the principal and the party defrauded. One of the two must needs suffer from the fraudulent acts of the agent ; and it is the dictate of reason and justice that where one or the other of these innocent parties must suffer, the loss should fall upon him who put it in the power of the agent to commit the fraud, rather than him who had no lot nor part in choos- ing the agent, or placing him in a position to do the mischief. But in the case of usury contracted for through an agent the borrower is not innocent. He participates knowingly in the violation of the law. He has no merit to plead in his defence ; while the lender, in the absence of authority given by him, or knowledge of the violation of the law, is wholly innocent and entirely free from moral guilt. Indeed, it smacks strongly of fraud in the borrower to enter into a contract with the lender's agent to pay usurious interest, without any inquiry whatever into the authority of the agent to make an unlawful contract, which the borrower knows cannot be enforced; for in this way the borrower, in conniv- ance with the agent, gets the lender's money with the intent, demonstrated by his subsequent plea of usui-y, to avoid the fulfilment of his contract. Now if the principle thus stated, which is 80 just in itself and so firmly eupported by author- ��� �