Sturges v. Hart — 65 N.Y. St. Rep. 695

Majority

p. 695

Stephen B. Sturges, Resp’t, v. John F. Hart et al., App’lts.

(Supreme Court, General Term, Second Department,

Filed February 11, 1895.)

Headnote

Mortgages—Payment—Assignment.

Where the holder of two mortgages on the same real estate assigns, upon payment, one of them to the owner of the real,estate, who is not the mortgagor, and thereby confers upon him the title to the mortgage and the power of disposing of the same, he is estopped from asserting, in favor of his other mortgage, any claim or defense against the assigned mortgage in the hands of a subsequent bona fide purchaser.

Appeal from a judgment in favor of plaintiff.

A. W. Parker and C. D. Rust (Frederick A. Ward, of counsel), for app’lts Asa W. Parker and Sophie G. Parker ; C. W. Wright, for app’lt John F. Hart; Sturgis & Roby, for resp’t.

This is an action to foreclose a mortgage for $8,000, executed by the defendant Hart to the defendant Asa W. Parker, bearing date May 8, 1891, and assigned by Parker to the defendant Daniel Doody, August 27, 1891, and by Doody assigned to the plaintiff, September 3, 1891. On the same day, Hart

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made another mortgage upon the same premises to Parker, lor $20,000, which was recorded five minutes later than the first mortgage for $8,000. Both of the assignments of the first mortgage were recorded on or before September 5, 1891. It is to be gathered from the case that, at the time of the execution of these mortgages, Hart held the legal title to the premises for Doody, who was the real owner, and made the mortgages at his request and for his benefit; and, further, that he subsequently reconveyed the premises to Doody. Doody paid the mortgage in suit to Parker, and took an assignment of it to himself, instead of a satisfaction piece, which he at one time contemplated talcing. Daniel Doody and wife subsequently conveyed portions of the same premises to the defendant Sophie Gf. Parker, and then she, with her husband, reconveyed the premises to Doody, and took hack two mortgages upon the same from him, one for $30,000, and the other for $12,600. Asa W. Parker, Sophie Gf. Parker, and Hart, the mortgagor, all served separate answers to the complaint. All the answers set up payment of the mortgage in suit by Doody to Parker, the mortgagee. The cause was tried before a judge without a jury, and he rendered a judgment in favor of the plaintiff, from which Asa and Sophie Parker have appealed.

It is true that Doody paid the amount of the mortgage in suit .to Asa W. Parker, but it by no means follows that the mortgage was extinguished by such payment. It must be remembered that Doody was not the mortgagor, and although his intention was when he made the first two payments upon the mortgage to have the same canceled, yet, when he made the last payment, he desired to continue the same in existence for the purpose of using the same for a further loan. That intention was communicated to Parker, and with that knowledge he assigned the mortgage to Doody. Parker, therefore, had notice of the intention of Doody to continue the existence of the mortgage, and his written assignment with that knowledge constitutes his solemn assent to such continuance. Parker then held the second mortgage of $20,000, and, if he intended to insist upon the extinguishment of "the first mortgage, that was his time to make such insistence. By failing to do so, and making a written assignment of the mortgage, he furnished Doody with the means of procuring a loan thereon ffom the plaintiff, who thus" became a bona fide holder of the same. The inequity of allowing the defense to prevail in this action against the plaintiff is so palpable that there seems to be no necessity either for further pursuit of the subject or for the citation of authorities. As the mortgagee, Parker, by his assignment of the mortgage to Doody, conferred upon him the title to the mortgage and the power to dispose of the same, he should be now estopped from asserting any other claim or defense against the mortgage. McNiel v. Tenth Nat. Bank, 46 N. Y. 325 . The judgment should therefore be affirmed, with costs.

After the trial of the action, a motion was made to open the case, and introduce newly-discovered evidence. The motion was denied, and the defendants Asa and Sophie Parker have appealed from the order of denial. According to the principle upon which

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we base our decision, it is obvious that the new proof desired to be introduced could not change the result, and therefore the motion was properly denied.

The order should be affirmed, with $10 costs and disbursements.

All concur.

Cases cited

McNeil v. Tenth National Bank 46 N. Y. 325 N.Y. 1871-11-10 p. 696