Case Name: Jackson, ex dem. Potter, against Leonard and others
Court: New York Supreme Court of Judicature
Jurisdiction: New York
Decision Date: 1816-05
Citations: 13 Johns. 180
Docket Number: 
Parties: Jackson, ex dem. Potter, against Leonard and others.
Judges: 
Reporter: Johnson's Reports
Volume: 13
Pages: 180–184

Head Matter:
Jackson, ex dem. Potter, against Leonard and others.
L. having by his agent, B. agreed to purchase á farm of iars°r advanced the money to B., for thepiirposeofcomple ting the purchase; and B paid to F„. 1,080 dollars, and gave jiisbond-to F. to pay off a prior mortgage, for the. like sum* tó P., retaining the 1,000 dollars unknown to L Held, that though P.'knew of B^s retaining the 1 o¿8 dollars, instead of paying off the mortgage, anti,had agr.eedwith 15.- that the mortgage should be paid»by land,,forr the purchase of which he had entered into anfagreement'with-B.,- which agreement, however, was. not performed by B; yet his title under the mortgage was'iiotaffectedby the arrangement, there being, no fraud on.fais. pact; but thatL. must bear the loss arising from the misconduct of his/own agent,. . «
EJECTMENT for lot No. 8S.,JaManlkis; tried before Mr: Justice Fan 'Npss, at; the’ Qnondagá circuit, in: June,,. 1815. A vérd.ict was taken for the plaintiff,, subject to the opinion óf the £ court:, on . a case containing the following facts r Both .parties claimed under Lebbeus Foster; the plaintiff, under a. mortgage from Foster to the lessor of the plaintiff, dated the 14th of March, 18Q6, for securing the payment of 1,000 dollars lent, in which it tvas expressly agreed that, for the use of that sum, Potter should have the use of the, premises for two years; ,and if the money was not paid at that time,. Potter was- to keep possession until it Was paid, and have the use of the. premises for the use of the money, , To the execution of this mortgage Charles B. Bristol Was a subscribing. witness.. The mortgage was not registered.
The defendant gave in evidence an absolute deed; with- warn raiity, from Foster to Leonard,, dated the 20th of January, 1808, and duly recorded on the day of its date. .
Charles B. Bristol, who had been discharged under the- insolvent act, was sworn as a witness for thp defendant. He testified that he made the purchase of the premises-of Foster, in the name of Leonard, and for his benefit, for 2,000 dollars that,, previous to the purchase, Leonard viewed the lot. while Patter was in possession. The witness stated’to Foster that Leonard had sent, By him, the 2,000 dollars for the land, and he paid Foster 1,000 dollars, and gave a bond conditioned to pay .1,000 dollars, due on the mortgage to Potter, who was then in possession of the premises; retaining, the other 1,000 dollars, which was unknown to Leonard. The reason assigned for retaining the 1*000 dollars, by the witness, was, that he was in treaty with Potter for the sale of 300 acres of land in Pompey, at 9 dollars per acre.; being part of 600. acres - which the witness had contracted to purchase of James Sackett ; and Potter proposed that the 1,000 dollars', due from Foster, should be applied towards the first payment for the' land in Pompey, which was, accordingly, agreed to be done. Potter removed from the premises, and went into possession of the land in Pompey, and the witness took possession of the premises for Leonard. The agreement was not in writing, though intended to be sp. Potter was to discharge the mortgage. The witness was unable to "fulfil' his contract "with Sackett, and gave it up, relinquishing what he had paid, about 350, dollars, at the instance of Potter, who said he could make another contract with Sackett; and it was.not until after he had made a contract with Sackett that Pottet said any thing about the mortgage money.
Foster, also, was a witness for the defendant, and testified, .that he made the contract for the sale of the land to Leonard, with Bristol, for 2,000 dollars, 1 and executed- the deed to Ireonard. That Bristol paid ] .000 dollars in, cash,: and gave his bond, conditioned to pay Potter the amount of the mortgage, and-to indemnify the- witness: against it; that it was; in consequence of the advice and-request of.Potter /that 'he took thebond. Potter told him that he was about making' a purchase from Bristol of land in Porripey, apd in that way he was to be paid the 1,000 dollars, and the witness to be discharged from it. That, not long since, he was surprised by being told by Patter-, that something had taken place between him and Bristol, in consequence of which he should have to come back to the wit-; ness for the 1,000 dollars. ■' * ' " ; - '
Randall, for the plaintiff,
contended, 1. That Bristol, the agent, haying notice of the mortgage to Potter, it must be deemed equivalent as notice to Leonard, his principal'. And having such notice of the existence of the pr-ipr mortgage, he'is equally bound as if the mortgage liad been duly registered.
2. That' parol evidence of a discharge of the mortgage was inadmissible. ' A fee cannot.be conveyed, .or transferred,, unless by an instrument under. seal. There can be no implied surrender without a consideration. 'And nothing appears to have passed between the parties.
Van Véchten, contra.
That, the .agreement was not reduced to writing was the fault of Bristol and Potter. Their neglect tp reducé it to- writing, must-be considered collusive and fraudulent, as it respects Leonard, If the agreement had been in writing, it will not be pretended that the parties ’would not' have been bound; And shall they be permitted to object to-their,0wii fraudulent, neglect ? Can this agreement be void, as it regards third persons who are to be affected by it ?. 'Will not the colift consider that as done-which ought'to have been done'?'■ .
Again, here was a part'performance of the contract, which takes it out of the statute. .Potter went into possession of, the land.Iñ.Pompey ,}Under the agreement, which, was so far executed as, to render the payment-complete. How can’ it be said that Potter received no consideration ? Leonard furnished the naoney to pay off the mortgage. Potter was to remain in possession, in lieu of receiving the interest; and when the mortgage was paid off, he was to give ap the possession. He did deliver up the possession to Bristol for the use of-Leonard ; and the inference is irresistible, -that the mortgage was paid,- A mortgage may be discharged by parol. Suppose it had been given up; the possession by the mortgagor is, prima facie, evidence of the mortgage having been paid. That a certificate of the payment is necessary, to cancel the registry, is quite á different thing. As it respected the rights of the parties, the mortgage was discharged.. ,
4 Cruise's Dig. 353. 32. 9 Johns. Rep. 163. Sugdent's Law of Vend 498. 2 Ves 440.
110 Johns. Rep. 457 460. 4 Dallas, 145.
2 Johns. Rep. 430 12, Johns. Rep 76
Burr. 1980. 1 Wm. Bl 617. Burr. Rep. 211.
2 Burr 978, Rep. 538.

Opinion:
Spencer, J.,
-delivered the opinion of the court, Ño objeetion has been made to the non registry of the • mortgage, and it would have been unavailing ; for Bristol, the agent of Leonard,. in taking the deed and making the purchase, had full notice of the mortgage; and-this was full notice to Leonard. .
The legal title is.manifestly in-the lessor of the plaintiffs; and it must prevail, unless he has done some act which ' precludes him from resting on. his mortgage. It has been urged, that Potter's agreement with Bristol, that the 1,000 dollars advanced by Leonard to Bristol, for the purpose of discharging the mortgage, should be retained by Bristol, and that the amount due on the mortgage should be paid by Bristol, by the contemplated conveyance by Bristol to. Pjotter,. of land contracted for with Sacket-t, was such an interference on the part of- Potter, and operated so injuriously and fraudulently towards Leonard, that Pptter cannot now insist on his mortgage.
It cannot be doubted, that, in consequence of Bristol's ap'pfopriating, to his own use, the 1,000 dollars placed in his hands by Leonard, to pay off the mortgage, the latter has been defrauded of that amount; but the question still returns, who has been the culpable cause of the loss ? I cannot perceive' that-Patter is chargeable with any direct or constructive fraud. He knew, indeed, that Leonard had sent to Bristol 2,000 dollars; fialf of which was to be paid to Foster, for his right to the equity of redemption, and the other half in discharge of the mortgage. The agreement between Potter and Bristol may have operated to prevent the latter from paying off the mortgage ; but it does not appear that Potter expressly agreed that Bristol should retain the 1,000 dollars inténded. to be applied to the payment of the mortgage, nor does it appear that Potter ¡mew that this retainer was concealed from Leonard*
'The fact is, that the injury to ¡Leopard is. entirely .attributable to the conduct of his own agent, Bristol '; and it'would 'be unj,ust that this loss should be sustained by iPoí¿e*y whose-conduet ap-. pearsfohave been fair, candid, and; upright. . ' 1
If it could be made- out, that Potter deiiyhd some ¿benefit from Bristol's renouncing Ms contract with Sackett; it. 3o.es not occur to me -that the defendants can avail themselves-of that to invalidate Potter's mortgage.. Nothing can produce that effect but.a direct and .positive'fraud on the par-tbf. ,P.o(i«r,. or.nir .aeT tüal payment- of" the'mortgage; Of the latter there is nopre-5 tencé, and I see no evidence to warrant us irrsaying that Potóer. has been guilty of such a fraud as to. be estopped from setting up his mortgage.
It is very quéstionablé whether Potter derived ¡any ' benefit from the. contract between Sackett and Bristol. Sackett testifies, that he-made .no agreement'with Potter, nor-made hint.bny offer of the landi before Bristol relinquished his contract..
There' is nothing that can affect Potter's, right ¡underhis- mortgage.
Judgment foi? the ¿plaintiff