Rapps v. Gotleib

BARNARD, P. J. The plaintiffs, being the owners of certain real estate in Kings county, applied to the defendant Gotleib for a loan thereon for $1,000. The mortgage was a third mortgage on the property, and Gotleib demanded $75 for making the search and examining the property. This was the 25th of May, 1892. On the next day, plaintiffs gave Gotleib their deed, and he drew a mortgage to himself for the $1,000. This was executed the same day, and Gotleib requested the plaintiffs to leave the bond and mortgage with him, without payment. They objected to that, and Gotleib gave them a receipt for the bond and mortgage, and promising to pay $925 “if everything was correct,”or to return the mortgage. It was expressly agreed that the bond and mortgage were to be of no effect without payment. Gotleib put the mortgage on record, and on the 24th of June, 1892, sold the same to the defendant Stern, for $1,000. She was an innocent purchaser, and bought without notice of the fraud committed by Gotleib. There was no delivery of the bond and mortgage to Gotleib. It therefore never had life in Gotleib’s hands. A purchaser of a mortgage takes it subject to all equities, and stands in the place of the assignee. Briggs v. Langford, 107 N. Y. 680, 14 N. E. Rep. 502; Hill v. Hoole, 116 N. Y. 299, 22 N. E. Rep. 547; Trustees of Union College v. Wheeler, 61 N. Y. 88. The evidence as to the good faith of the defendant Stern is not very clear, from a careful examination of the testimony in respect to her purchase. The rule, however, that, if she was a bona fide purchaser, she stands in no better position than her assignor, Gotleib, renders a discussion upon this point unnecessary. The mortgage was never delivered, and Gotleib never had anything to sell. The judgment should therefore be affirmed, with costs.