
    THE MASSACHUSETTS LIFE INSURANCE COMPANY, Plaintiffs and Respondents, v. JAMES CARPENTER, Defendant and Appellant.
    
      [Decided December 31, 1870.]
    Where the defendant mixed the money and funds of the plaintiffs with moneys and funds of his own and of third parties, and a portion of the moneys so mixed was subsequently stolen, but it was impossible to determine to whom the money stolen actually belonged—held, that this action of the defendant made him liable to account to the plaintiffs for the money received from them, even though a loss had occurred.
    By this act of the defendant the identity of plaintiffs’ money was lost, and the loss should fall on the defendant as a “ penalty ” for not keeping plaintiffs’ money separate from his own and that of others.
    Before Monell, McCunn, and Spencer, JJ.
    This cáse was tried before a referee.
    The action was brought to recover of defendant an alleged balance of account due from him as the agent of plaintiffs in New York.
    The only defense claimed and urged rested upon the fact that one William W. Cain, a clerk of' the defendant (employed, as defendant claimed, in the business of plaintiffs), had embezzled the amount sought to be recovered, and consequently defendant was not liable. That the plaintiffs had acted in the premises, and in their dealings with defendant, upon this theory, and were estopped from denying the same.
    The referee found in favor of the plaintiffs.
    The defendant appealed from the judgment entered upon the report of the referee.
    
      Mr. Amos G. Hull for appellant.
    
      Mr. John L. Cadwalader for respondents.
   By the Court:

Spencer, J.

I have examined critically the findings of fact and law made by the referee in this case, and conclude they are fully supported by the evidence, and that the judgment in this action should be affirmed. This fact clearly appears from the evidence, and does not seem to be contested, “ That the defendant mixed the money and funds of the plaintiffs with moneys and funds of his own and of third parties, at the office and the bank, and that the money embezzled by the clerk was taken from these moneys and funds, which were so mixed and commingled that it is impossible to determine to whom the money embezzled actually belonged at the time.” This action on the part of defendant made him liable to account to the plaintiffs for their moneys received by him, even admitting that a loss had occurred.

By the act of defendant the identity of plaintiffs’ moneys was lost, and the loss should fall upon the defendant, as Story justly remarks, “ as a sort of penalty ” for the agent’s negligence in not keeping his principal’s money separate from his own and that of others. When he chose to mingle these funds of the plaintiff with his own, etc., he made the same substantially his own, and incurred the liability and duty of answering to the plaintiffs for the full amount of the same. A loss of a part of these joint and mixed funds must be sustained wholly by the defendant.

The judgment should be affirmed, with costs.  