Farmer v. American Mortgage Co.

McCLELLAN, J. On the evidence in this case, Joseph H. Sloss was not the agent of the respondent, The American Mortgage Company of Scotland, in or about or in respect of the transaction whereby said company loaned five hundred dollars to D. 0. Farmer and took a mortgage signed by said Farmer and his wife, the complainant, covering the land in controversy, to secure the payment of said loan ; but, to the contrary said Sloss was employed by D. C. Farmer to secure the loan for him, and the former acted throughout the negotiation and to the consummation of the loan as the agent of the latter. — Ginn v. New England Mortgage Security Co., 92 Ala. 135; American Mortgage Co. v. King, 105 Ala. 358; Land Mortgage & Investment Co. v. Vinson, 105 Ala. 389; Edinburgh American Land Mortgage Co. v. Peoples, 102 Ala. 241. While acting as Farmer’s agent and in the line of such agency he examined the title to the land, upon the security afforded by which he was endeavoring to obtain a loan for Farmer, with a view to giving assurances for Farmer that the latter’s title to the land was perfect in order that persons engaged in the business of making loans on real estate security might be induced to lend Farmer five hundred dollars on this land. Knowledge or notice acquired by or imputable to Sloss, in this examination or because of matters disclosed by it, of the fact that the land belonged to Elizabeth Farmer, and not to her husband, D. C. Farmer, was knowledge of and notice to the agent of Farmer, and was neither the knowledge of nor any notice to the Mortgage Co., which subsequently made the loan relying upon the assurances of Farmer and his agent, Sloss, that the title to the land was in the borrower. There is no room in this case for the operation of the principle of ratification by one of the acts of another whereby that other becomes, now for then, so to speak, the agent of the person ratifying for all purposes in respect of the act done. The mere fact [415] that the Mortgage Co.’ was induced to rely upon the representations of Sloss made to the Corbin Banking Co. in the application for a loan presented as the agent of Farmer, that the applicant had title to the land, was obviously no more an adoption of Sloss as its agent in examining Farmer’s title than its reliance upon the representations of Farmer himself would have made the latter its agent, and charged the company with all his knowledge and notice of the claims of complainant. A party buying land may rely upon the vendor for an abstract or true representation of title, and the vendor may act in this behalf through an agent; and in neither case would the purchaser be charged with notice' of secret equities known to the vendor or his- agent but not communicated. Such would be an unusual but by no means impossible mode of proceeding; and the evidence shows it to h’ave been the mode adopted here. It follows from these considerations that the respondent was a bona jicle purchaser for value without notice of the rights now asserted by Mrs. Farmer, and its rights are, therefore, superior to hers. Affirmed.