Case ID: hill_2/html/0655-01.html
Source: Caselaw Access Project
Author: {"author": "Cowen, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Rust vs. Morse.
    The right of a bom fide purchaser of goods to contest the validity of a prior mortgage on the ground of continuance of possession in the mortgagor, is one strictly personal to the former; and he cannot be obliged by the latter to avail himself of it.
    Accordingly, where one having mortgaged certain goods, afterwards sold them, fraudulently concealing the existence of the mortgage, and the purchaser voluntarily surrendered to the mortgagee on his demanding the goods ; held, in an action for the fraud, that though the purchaser might have successfully contended against the mortgagee’s claim by reason of possession remaining in the mortgagor, the omission to do so was no defence.
    Case, tried at the Oswego circuit, in June, 1841, before Gridley, C. Judge. The declaration alleged that the defendant exchanged his mares with the plaintiff for a watch of the latter and $50 in money; that the defendant had previously mortgaged the mares to their full value by two mortgages, one executed to W. W. Bracket, and the other to A. H. Hollister & Co.; that the defendant fraudulently represented himself as being the owner, and concealed the fact of his having executed the mortgages, whereby the plaintiff was induced to make the exchange; and that the mares were afterwards taken from the plaintiff in virtue of said, mortgages. Plea, the general issue. On the trial, beside other proof necessary to make out the plaintiff’s case, it appeared in evidence that, after the mortgages were executed, the defendant continued in possession of the mares down to the time of the exchange; after which they were taken from the plaintiff by a constable under the direction of Bracket, to whom the Hollister mortgage had been, assigned, and sold in virtue of the mortgages. The constable had no process, and the plaintiff gave up the mares on their being demanded. The defendant’s counsel requested the judge to charge, that if the mortgages were valid as against the defendant, they were not so in respect to the plaintiff who was a bona fide purchaser ; that he could therefore, have held the mares, and ought to have done so in oppositian to Bracket’s claim, with whom he should have contested the right of property; and that having given them up voluntarily and in his own wrong, he was not entitled to recover in this suit. The judge refused to charge as requested, and the jury rendered a verdict in favor of the plaintiff. The defendant now moved for a new trial upon a case.
    
      W. F. Allen, for the defendant.
    
      W. Duer, for the plaintiff.
   By the Court,

Cowen, J.

Whether the mortgages were invalid in respect to bona fide purchasers, is a question that need not be discussed. They were at any rate good as between the defendant and the mortgagees. The plaintiff might, I admit, as a bona fide purchaser, have successfully contested the claim of the mortgagees; but the defendant has no right to insist on his doing so. The defence against the claim of a mortgagee on the ground of being a bona fide purchaser, is, in all cases, a matter of right strictly personal to such purchaser, and never can be thrown upon him by the mortgagor as matter of obligation. To this effect there are many cases very strong in principle; I think much stronger than the present. A man innocently becomes surety in a usurious obligation, and takes a counter security from his principal; the former may waive his defence of usury, pay the money, and recover against the latter. (Basset Prowe’s case, 2 Leon. 166; Robinson v. May, Cro. Eliz. 588; Gouldsb. 174, S. C.; Button v. Downham, Cro. Eliz. 643, Noy’s Rep. 73, S. C., nom. Dowman v. Butter.) In Noy, Walmesly is made to say, “ so if the surety had been an infant, and had not pleaded nonage.” Take it that this would not be so when the surety knows of the usury and neglects to plead it: the judge was not here requested to dispose of the case on any such qualification, but to decide, that simply because the plaintiff was a bona fide purchaser, he should therefore have defended. The plaintiff might well have been ignorant of the circumstances upon which the mortgagees’ claims stood» It was enough to see that their claims were good as against the mortgagor; and, being on good consideration, that they were valid, notwithstanding a continued possession, in the mortgagor.

But the cases go farther. It has been held that a defence under the statute of frauds, on the ground that a collateral contract to pay was by paroi, is personal to the guarantor, and he is not bound to avail himself of it as a defence, for the benefit of a third person. (Cahill v. Bigelow, 18 Pick. 369.) Again ; a man having a lien may waive it, and is not bound to insist upon it for the benefit of the general owner, who has sold the goods to another. (Barrow v. West, 23 Pick. 270.)

In the case before us, the obligation to indemnify arises out of the defendant’s fraud. His call upon the plaintiff, therefore, to litigate for his benefit, comes with much less reason than if, as in the cases cited, he were defending against a mere innocent contract of indemnity.

I am of opinion that the motion for a new trial should be denied.

New trial denied.