Robertson v. Hay ex rel. McCandless

Mr. Justice Mercur delivered the opinion of the court, This is a case of scire facias on a mortgage. It is conceded that the plaintiff in error executed the mortgage described in the writ of scire facias. He also executed the bond recited in the mortgage. They both bear date the 18th of June 1873, and the mortgage was acknowledged on the 24th of the same month. On the 18th of July following he executed “a certificate of no defence.” It distinctly referred to the bond and mortgage, stating where the latter was recorded, and declared that it, together with the bond accompanying the same, “is justly, fully and entirely owing and payable according to the terms and conditions thereof. And I hereby also further certify to any person or persons who may desire to purchase the same, that I have no drawback, claim, set-off, or other defence of any kind whatever, to the payment of any part of said mortgage, either principal, interest or commissions, when due and payable or collectible by the terms and conditions therein recited as aforesaid.” On the day after its date he duly acknowledged this certificate. He placed these three written instruments in the hands of Mr. Gill, in anticipation of needing money and with the view of a subsequent negotiation of the mortgage. Hay, to whom the mortgage was executed and the bond payable, was the law partner of Gill. [246] The jury has found, and on evidence amply sufficient to justify the finding, that in July following, McCandless, the equitable defendant in error, purchased the mortgage of Gill in good faith and for a valuable consideration, and took an assignment thereof from Hay. It matters not that Gill may have sold the mortgage and caused it to be transferred before he was authorized so to do, under the private instructions given him by the mortgagor; nor that he failed to account to the latter for the money received therefor. These facts are insufficient to defeat a recovery by the assignee. The papers which the mortgagor executed and placed in the hands of Gill, not only impliedly authorized a sale of the bond and mortgage; but invited purchasers by expressly declaring that he had “no defence of any kind whatever:” Ashton’s Appeal, 23 P. F. Smith 153; Hutchison v. Gill, post, page 253. This written declaration fresh from the mortgagor having been shown to the assignee when he was about to purchase, it is idle to say he should have gone to the mortgagor personally and inquired if there was any defence. This certificate was addressed “ to all whom it may concern.” It could not have been more effective and conclusive notice to one about to purchase, that the mortgagor had no defence, if it had been addressed to the purchaser by name. The main purpose of the execution and delivery of such a certificate is to dispense with personal inquiry. At the same time it gives certainty to the declaration and perpetuates the evidence thereof. It is a well-settled rule that where one of two innocent persons must suffer from the tortious act of a third, he who gave the wrongdoer the means of perpetrating the wrong must bear the consequences of the act. By placing the papers in the hands of his agent and attorney, the mortgagor gaye him the means of making sale of the mortgage and of obtaining the money of the assignee. The fraud which Gill may thereby have practiced on' the mortgagor, cannot operate to the prejudice of the innocent and good faith purchaser. It was further contended that the alterations made in the mortgage, and in the certificate after their execution, were sufficient to avoid the instruments. In determining the legal effect of the alteration it is important to consider by whom the alteration was made, and the materiality of the alteration. 1. The assignee was no party to the alterations. He was in no manner privy to their making. They were made by Gill. He was either the agent of the mortgagor, intrusted by him with the papers, and authorized to sell the mortgage, so that the act of the agent became the act of his principal, or he was not such agent, and not intrusted, and not authorized to act for the mortgagor, in which case the alteration was the act of a stranger. Then, although material, the alteration will not affect the validity of the instru [247] ment: Greenl. Ev., sects. 566, 568; Lewis v. Payn, 8 Cowen 71; Jackson v. Malin, 15 Johns. 297; Withers v. Atkinson, 1 Watts 236; Neff v. Horner, 13 P. F. Smith 327. 2. The alteration in the mortgage was by adding a clause waiving the benefit of a specific Act of Assembly, which, in fact, had been repealed prior to the execution of the mortgage. As then the act mentioned had no validity whereby the mortgage could be affected, an attempt to waive its provisions had no effect. It was simply an immaterial act which in no manner prejudiced the mortgagor. As, therefore, the legal effect of the mortgage remained the same, the alteration did not avoid it: Hunt v. Adams, 6 Mass. 519; Nevins v. DeGrand, 15 Id. 436; Gardinier v. Sisk, 3 Barr 326; Miller v. Gilleland, 7 Harris 119; Miller v. Reed, 3 Casey 244; Burkholder v. Lapp’s Executor, 7 Id. 322. The substance of the alteration in the certificate is a recital that the mortgage was renewed and extended another year. It was the declaration of a fact intended for the benefit of the mortgagor. It was made by Gill long after the purchase by the assignee. It did not destroy the title which ‘the latter had previously acquired. It may be further observed, that after this alteration appears to have been made, the mortgagor obtained policies of insurance on the building covered by the mortgage, in which was inserted the clause, “loss, if any, first payable to James McCandless, mortgagee.” The plaintiff in error thereby clearly evinced knowledge, and implied ratification, of the assignment. It is unnecessary to consider all the assignments separately. We discover no error in the answers and charge of the learned judge. Judgment affirmed.