BOARDMAN v. Bmzzann. 27
loan of $790* from. the complainant, payable November 1, 1884, secur-
ing the same by a mortgage on certain realty situated in Warren county,
Iowa. The present billwas brought for the purpose of foreclosing this
mortgage, it being averred that the principal debt is due and unpaid.
Thedefendant Blizzard avers payment, and shows that for the purpose
of raising the money thatwould be needed for the payment of said mort-
gage he, on or about the 26th day of August, 1884, made anapplication
through the Union Loan Association of Des Moines, Iowa, under which
name Hugh R..Creighton mainly carried on business, for a loan ·of $700,
to be secured by a mortgage upon the realty described in the mortgage V
to the complainant; that through Sanford dr Kelley, loan brokers at
New Bedford, Mass., the desired loan was placed with Warren Gifford,
who advanced the needed sum, and which wason or about September
26, 1884, forwarded by said Sanford & Kelley to Hugh R. Creighton, at
Des Moines, Iowa. A mortgage to secure the amount thus loaned was
delivered to said Gifford, he accepting same in thebelief that his mort-
gage would be the first lien on the land, through the payment of the mort-
gage to complainant. ·Instead of applying the money thus received to
the purpose for which it was borrowed, to-wit, the payment of the debt
due complainant, Creightonembezzled the same, and the real question to
be determined is upon whom the loss must fall. r
The rascality of Creighton has created such a state of facts that it is
impossible to avoid a serious loss to one of two really innocent parties,
to neitherof whom can-the slightest bad faith, or even ordinary negli-
gence, be attributed. No matter, therefore, how the cause may be de-
‘ cided, the party adjudged to bear the loss will doubtless feel aggrieved;
for no amount of logical reasoning will overcome the natural feeling that
it is an outragethat one should be compelled to submit to heavy pecu-
niary loss when the party is not conscious of any failure of duty or of
care on his part. It is not questioned that the complainant loaned the
sum for which the defendant Blizzard executed the mortgage in the bill
of complaint described, and that the latter received the same. Unless,
therefore, this sum has been repaid, the complainant has a just claim to
recover theamount thereof. The case, therefore, turns upon the plea
of payment interposed by the defendant. It is admitted in the stipula-
tion of facts signed by the parties hereto that the money procured from
Gifford never reached the complainant, nor was the same used by Creigh-
ton in the interest of or for the benefit of complainant, but the same was
converted by Creighton to his own use. To make the complainant re-
sponsible therefor it must be made to appear that when Creighton con-
verted the money he was holding the same as agent for complainant.
There is evidence in the case tending to show that Creighton collected
the annual interest accruing on this loan, and on others held by- com-
plainant; and it may be assumed that the evidence would justify the
finding that Creighton acted for the complainant in the collection of the
principal and interest of the loans that had been negotiated through
Creighton. It is equally, or even more, certain, that Creighton had also
acted as agent for the defendant Blizzard. The money actually embez-