Hoppock v. Johnson

By the Court, Paine, J. We think there is no sufficient evidence to show that Emmons Johnson had any actual notice of the prior mortgage of the appellants. He was undoubtedly aware that Albert Johnson was endeavoring to make an arrangement with them to their satisfaction and prevent their proceeding in the attachment suit. He understood that the mortgage which he assigned to them at Albert Johnson’s request, was to be used for that purpose. But notwithstanding the ingenious argument of the counsel [305] for the appellants, we think there is nothing to .show that he knew that Albert was to give the appellants also a mortgage on the Janesville land, on which he had consented to take security in the place of the mortgage he had assign-eel. All of his own" acts are entirely consistent with the hypothesis that he merely intended to accommodate his nephew by surrendering a security upon property in New York, which the appellants were willing to take, upon an understanding that he was to have substituted in its stead the mortgage on the Wisconsin property. His interview with his nephew, his proceedings to accomplish that purpose, and his general knowledge that Albert was endeavoring to effect a settlement with the appellants, cannot by any just reasoning be held to furnish ground for the belief that he knew that Albert had promised them a prior mortgage on the property he was to substitute as his own security. And the theory that he had such knowledge is in itself less credible than the opposite one. For it would be very natural for him to accommodate his nephew by substituting one security for another, so as to enable him the better to arrange with other creditors; but it would be much less natural for him to surrender a good security for his own debt, and give the other creditors also a prior lien on the property which he took in its stead. We think the court below was right, therefore, in finding that he had no notice. Nor do we think that the position of the appellants’ counsel can be sustained, that Emmons Johnson is to be charged with notice upon the ground that Albert Johnson was his agent, the latter having, of course, knowledge of the prior mortgage. The general doctrine that where a man acts by an agent, and it becomes essential to charge him with notice, it is sufficient to show notice to the agent, is well understood. But we think it inapplicable here, for the reason that Albert Johnson cannot be considered the agent of Emmons Johnson in this transaction. Albert was dealing with the appellants for himself, and not for Emmons Johnson. The latter had no interest in the negotiation. It is true he had executed an assignment of the mortgage he held, to the appellants, and left it in the hands of Albert to be used by him in com306 ^is ^«^tion with. them. But that did not make him a party to the negotiation. He was so no more than he would hare been had he assigned it directly to Albert, leaving him to re-assign it to the appellants. The substance of the transaction between him and Albert was, that he exchanged with Albert the one security for the other. And the fact that, at Albert's request, he made the assignment directly to the appellants instead of to Albert himself, does not change its character or involve him in the transactions of the others. Neither does the fact that Albert delivered the mortgage to Emmons by sending it to the register, make him the agent of Emmons so as to charge the latter with notice by reason of his knowlege of the prior mortgage. Albert, in so delivering the mortgage, was acting for himself as one of the principal parties to the agreement between himself and Em-mons, which was not completed on his part until he had so delivered it. Suppose A makes a mortgage to B; then he borrows money of 0, who has no knowledge of the first mortgage, and agrees with him to execute a mortgage on the same property and to deliver it to an agent appointed by 0. Does the fact that he thus delivers it under 0’s direction make him the agent of C, so as to charge 0 with notice of B’s mortgage because A knew it ? It seems really too obvious for argument that it does not; and yet such is this case. The appellants’ counsel also objects that the judgment is for too much. It is for the amount due on the mortgage assuming nothing to have been paid. But Emmons Johnson was asked how much was due, and made a general statement of the amount of principal and interest, which was something less than the amount of the judgment. But it does not appear that he had the papers present, and Albert Johnson testified that nothing had ever been paid, and there is no other proof tending to show any payment. It is also suggested that the statement of Emmons Johnson was made with reference to the old mortgage which he had assigned. That may have been so ; but at all events we do not think that his general statement, made without any computation, should be allowed to overthrow the positive evidence derived [307] from the papers and the statement that nothing had been paid. It does not appear to have been intended as an accurate definite statement; nor does it appear with sufficient certainty that he referred to the amount then due upon this mortgage, to give it that effect. It follows, therefore, that the mortgage of Emmons Johnson, being first put on record, was entitled to priority; and the judgment of the circuit court is affirmed, with costs.