Case Name: Foster v. Beals
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1860-03
Citations: 21 N.Y. 247
Docket Number: 
Parties: Foster v. Beals.
Judges: 
Reporter: New York Reports
Volume: 21
Pages: 268–273

Head Matter:
Foster v. Beals.
Receipt.—Constructive Notice.
A receipt, signed by a mortgagee, is not, per se, sufficient evidence that the money was paid at the time it bears date, as against a bond fide as-. signee of the mortgage.
The non-production of a mortgage, at the time a payment is made on account, for which a plausible excuse is given, is not sufficient to afiect the mortgagor with notice of a prior assignment; even though the mortgagee be insolvent.
Appeal from the general term of the Supreme Court, in the seventh district, where judgment upon the report of a referee had been affirmed.
This was an equitable action to stay the foreclosure of a mortgage by advertisement, and to compel the holder to discharge the same, on receipt of an amount tendered by the plaintiff.
th® 23d May 1851, the plaintiff executed the mortgage in question to one Boyce, conditioned for the payment of $2983, with interest, on or before the 1st April 1854. On the 4th June 1851, Boyce assigned the mortgage to the defendant Beals. On the 6th June 1851, the plaintiff, in good faith and without notice of the assignment, paid to Boyce’s agent the sum of $850,.on account of the mortgage-debt. The securities were not produced, though the plaintiff inquired for them; but it was suggested, they must be at the county clerk’s office for the purpose of being recorded. On the 30th June 1851, the plaintiff made a-further payment, under similar circumstances. The referee allowed both these payments; and also another payment of $234, the only evidence in reference to which was a receipt in the handwriting of Boyce, dated the 31st May 1851; there was no proof of the time of its execution, other than the date. The de fendant excepted. The question was, whether these facts were sufficient to affect the defendant with constructive notice of the assignment of the mortgage, and to put him on inquiry. *The referee decided that they were insufficient for that purpose; and judgment having been entered on his report, and affirmed at general term, the defendant took this appeal;
Smith & Lapham, for the appellant.
Ghesebro, for the respondent.

Opinion:
Davies, J.
After stating the facts, and coming to the same conclusion as the referee on the question of bona fides, and holding that the facts were insufficient to put the plaintiff upon inquiry, proceeded:—
We think, however, the referee erred in admitting the receipt of Boyce of May 31st, 1851, as evidence of the payment to him, on that day, of the sum of $234, on the bond and mortgage. A written receipt for money is but the admission of the party giving it, and is always capable of explanation; it is the'declaration of the party, attested by his signature. It has no greater significance from the circumstance that it is reduced to writing and-signed by him; if made by paroi, it would be of equal value. It has been supposed, since the decision of Paige v. Cagwin (7 Hill 361), in the court of errors, that the rule was settled in this state, that the declarations or admissions of the assignor of a chose in action could not be given in evidence against an assignee for value. This case was reviewed by Parker, J., in Smith v. Webb (1 Barb. 230), where he says, it was held in that case, that the declarations of a prior holder of a note, transferred after maturity, or of a vendor of a chattel, are not admissible in evidence against a subsequent purchaser, who acquired title for a valuable consideration; and that such declarations are only admissible, when made by a party reall>T *n illierest, or by one through *whom the plaintiff claimed by representation. The rule is only applicable, where there is an identity of interest between the assignor and assignee. This identity of interest is said in Fitch v. Chapman (10 Conn. 8), to exist " when the nominal party was suing in fact for the benefit of a third person."
This court, in Booth v. Swezey (8 N. Y. 276), approves of thti cases of Paige v. Cagwin and Smith v. Webb. In that case, it was held, that in an action, brought by the assignee of a mortgage to foreclose the same, the declarations of the mortgagee, -made by him prior to the assignment, were inadmissible to impeach the mortgage, and to show that it was given upon a usurious consideration. It is true, that Judge Morse, in his opinion, says, that a receipt given by the mortgagee stands upon a different footing, as an act of the parties. The ground of the distinction is not perceived; the making of a usurious agreement which, if proved, would invalidate the whole mortgage, is as much the act of the parties, as the payment of a part of the moneys secured thereby, and the giving of an acknowledgment by the party receiving it, that it had been paid. Suppose, in Booth v. Swezey, the mortgagor had offered the written history of the inception of the mortgage, signed .by the mortgagee, and which would have shown its usurious character, would the offer have been in any the less objectionable form ? We do not see that it would, and the same reasons which would require its exclusion in one form, are equally applicable to its exclusion in the other.
The great objection to this class of testimony is, that it seeks to establish by hearsay or'secondaiy evidence, what can be shown by better and more satisfactory proof. The case of Jermain v. Denniston, in 6 N. Y. 276, is relied upon as holding a contrary doctrine. That case was decided the year before Booth v. Swezey, and some of the judges who sat in that case, and who concurred in the decision of it, took part in the decision of the former case. In Jermain v. Denniston, it was said, that admitting the doctrine of Paige v. Cagwin to the fullest extent, it ¿ould not apply, when the previous holder of a note, while he owned it, put into the hands of the maker, in the usual course of business, "written evidence of its payment and t * J discharge. That is not the present ease, and does not therefore control it.
The judgment in this cause must be reversed, and a new trial ordered, with costs to abide the event of the action.