Court Opinion

ID: 7970129
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:54:23.480474+00
Date Added: 2024-06-11T16:34:45.087188
License: Public Domain

CANTY, J.
I concur in the foregoing opinion except so far as it holds that by selling the property subject to the mortgage “the assignee elected to treat the mortgage as a valid lien, notwithstanding its fraudulent character as to creditors of the mortgagor.” In my opinion, it was not in the power of the assignee to make any such binding election; and, if he knowingly attempted to do so, it would be good ground for his removal and the appointment of an assignee who would proceed to redress the wrong attempted to be perpetrated by the assignor. By selling the property expressly subject to the mortgage, the assignee reserved from the purchaser the right to assail the mortgage *132as being without consideration or as being fraudulent as to creditors. If the assignee afterwards discovered that the mortgage was without consideration, or fraudulent as to creditors, he would have a right to proceed against the mortgagee in equity to be subrogated to the lien of the mortgage for the benefit of creditors. It is not necessary to determine whether he could do this if he made such discovery before the sale, but certainly he could not even then bind the creditors by attempting to ratify the fraud by a sale of the property subject to the mortgage.