Bebber v. Moreland

Me. Justice Watebman delivered the opinion of the court. Appellants! principal contention is that Moreland, by leaving his note and the mortgage securing the same with Haerther, enabled him to perpetrate a fraud, and he, More-land, should bear the loss thus occasioned, to an innocent purchaser of such securities. The bill in this case is to set aside a release of the mortgage and to foreclose the same. Appellant is presumed to have known that a mortgage is not a negotiable instrument, and that he took the one in question subject to whatever defenses the makers might have thereto. Haerther had no right or authority to sell the mortgage or to place it upon- record until the incumbrance to the building and loan, association had been removed; his sale to defendant was a betrayal of his trust, and the purchase by appellant gave to him, as against Moreland, no right to enforce this' security. What appellant may do with the note he obtained is not before the court. The present case is quite unlike either Seaverns v. The Presbyterian Hospital, 173 Ill. 414, or Greenbaum v. Bornhofen, 167 Ill. 640. We are not here dealing with an authorized transfer of securities for the purpose of thereby obtaining money with which to pay off a prior incumbrance. The authority and the agreement in this case was that the mortgage now under consideration should not be recorded, until the prior mortgage had been “ taken up.” The decree of the Circuit Court is affirmed.