Rapps v. Gottlieb — 51 N.Y. St. Rep. 195

Majority

p. 195

Louis Rapps et al., Resp’ts, v. Henry Gottlieb et al., Def’ts.

(Supreme Court, General Term, Second Department,

Filed February 13, 1893.)

Headnote

Mortgage — Fraud—Bona fide assignee.

Plaintiffs desired to obtain a loan from Gr. on mortgage, and at his re

p. 196

quest left the mortgage with him without payment, he receipting therefor and promising to pay “if everything was correct,” or to return the mortgage. Instead of doing so he put the same on record and sold it to S., who was an innocent purchaser, without notice. Held, that there was no delivery of the mortgage, and it never had life in G-.’s hands, and that S. stood in no better position than her assignor.

Appeal by the defendant, Bettie Stern, from a judgment in favor of plaintiffs, for the cancellation of a bond and mortgage and the surrendering of the same to plaintiffs.

Charles Steckler (Alfred Steckler, of counsel), for app’lt; Jacob Manheim, for resp’ts.

The plaintiffs, being the owners of certain real estate in Kings county, applied to the defendant, Gottleib, for a loan thereon for $1,000. The mortgage was a third mortgage on the property, and Gottleib demanded seventy-five dollars for making the search and examining the property. This was on the 25th of May, 1892. On the next day plaintiffs gave Gottleib their deed, and he drew a mortgage to himself for the $1,000. This was executed the same day, and Gottleib requested the plaintiffs to leave the bond and mortgage with him without payment They objected to that, and Gottleib gave them a receipt for the bond and mortgage, and promised to pay $925 “if everything was correct,” or to return the mortgage. It was expressly agreed that the bond and mortgage were to be of no effect without payment. Gottleib put the mortgage on record, and on the 24th of June, 1892, sold the same to the defendant, Stern, for $1,000. -She was an innocent purchaser, and bought without notice of the fraud committed by Gottleib. There was no delivery of the bond and mortgage to Gottleib. It, therefore, never had life in Gottleib’s hands. A purchaser of a mortgage takes it subject to all equities, and stands in the place of the assignor. Briggs v. Langford, 107 N. Y., 680 ; 12 St. Rep., 461 ; Hill v. Hoole, 116 N. Y., 299 ; 26 St. Rep., 657 ; Trustees of Union College v. Wheeler, 61 N. Y., 88 .

The evidence as to the good faith of the defendant, Stern, is not very clear from a careful examination of the testimony in respect to her purchase. The rule, however, that if she was a bona fide purchaser she stands in no better position than her assignor, Gottleib, renders a discussion upon this point unnecessary. The mortgage was never delivered, and Gottleib never had anything to sell.

The judgment should, therefore, be affirmed, with costs.

Dykman and Pratt, JJ., concur.