Blunt v. Norris

Ames, J. The claim of the plaintiff is that, as he acted in good faith, and received the note without notice of any fraud or want of authority on the part of Jackson, the transfer of the note operated as an equitable assignment of the mortgage also. But, as the note was not indorsed to the plaintiff, it could only be sued in the name of Jackson, and was subject to all equities against him; and, even upon the supposition that, so far as it was a matter between the plaintiff and Jackson, the mortgage might be considered as subject to a trust in favor of the plaintiff to the extent of the money which he had advanced, yet he [57] “acquired no right as against the defendant, who was a purchaser for a valuable consideration, and without notice of any claim of the plaintiff. It appears that, although the mortgage had remained for about five months in the hands of Jackson, nothing had been done in the way of raising money for the use of the mortgagor, until the defendant agreed to advance the money upon it. As Jackson at that time was unable to produce the original note, he was driven to the subterfuge that the note intended to go with the mortgage had never been signed at all. The mortgagor in this way was induced to give what was in fact a new note. There can be no doubt that this new note was the one, and the only one, which the mortgagor intended to secure by the mortgage, and that he did not suppose that there was another note of the same tenor and date in existence. We see no ground for the plaintiff’s claim that this new note so given was a spurious note. Up to the moment of the assignment to the defendant, the mortgage was subject to the control of the mortgagor. Jackson was his agent or servant for the purpose of negotiating or transferring it to the actual lender of the money, and with no authority to do anything more. The defendant was dealing with a mortgage which, so far as the public records furnished any indication, was one which the assignment from Jackson would transfer to him, absolutely and free of any incumbrance. While acting in good faith and paying a valuable consideration, he had a right to rely upon the record. “ In the absence of fraud, a conveyance by the party who appears on the record to be the owner of the mortgage should be sufficient to protect a purchaser who has no actual or constructive notice of title in any other.” Welch v. Priest, 8 Allen, 165. See also Young v. Miller, 6 Gray, 152; Warden v. Adams, 15 Mass. 233; Wolcott v. Winchester, 15 Gray, 461. Bill dismissed.