Court Opinion

ID: 4004517
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:05:43.206794+00
Date Added: 2024-06-11T13:56:42.755621
License: Public Domain

Since writing the above opinion I find in Vol. 2 Jones on Mortgages, p. 431, this statement: "By the weight of authority, a subsequent assignee of the mortgage or a subsequent purchaser *Page 468 
or mortgagee of the mortgaged premises, taking in good faith and for value in reliance upon the mortgagee's apparent ownership and discharge of the security is protected against the claims of a prior assignee of which he had no knowledge." Cited in support of the text is Williams v. Jackson, and numerous cases from seventeen states. In addition thereto may be cited Porter v. Stuart, 227 F. 840, and Re Buchner, 205 F. 454. I have not critically examined the cases cited by the above author, but note that in Ogle v. Turpin, 102 Ill, 148,Ayers v. Hays, 60 Ind. 454, Vann v. Marbury, 100 Ala. 438, the obligations secured were not due at the time the fraudulent releases were executed and recorded. In the instant case Ross had express authority from the holders of the obligations secured by the trust deed to release, upon satisfactory evidence produced to him that the obligations had been paid. Whenever Ross was satisfied of the fact of payment, they told him to release. They made him their agent for that purpose, relying upon his integrity. I repeat that the innocent purchaser of the lot was entitled to repose like confidence in his integrity. Should she suspect he was a rascal, and investigate the weight of the evidence of payment which moved him? Note the authority to release is upon satisfactoryevidence being produced to him, not to anyone else. In Vann v.Marbury, supra, the subsequent purchaser was falsely told by the payee of the obligation secured that they were paid. He told her that one of the notes (the one in the hands of an assignee) was mislaid, and he would produce it the next day. Relying upon him she purchased; Vann then released the mortgage, and the court protected her against the holder of the note in due corse. In our case of Bank v. Coal Co. and Thompson
v. Bennett, cited, the record disclosed to the purchasers that the persons who released did not have that express power, and put the purchasers on inquiry. In the instant case if a purported holder of the bonds had undertaken to release the trust deed, the purchaser would have been under notice to inquire and satisfy herself that the releasor owned the obligations in fact. But the situation is entirely different. The trustee acting for the owner of the equity of redemption and the holders of the obligations with express authority to release, has *Page 469 
exercised that authority in conformance with the power given him. "Where somebody must be the loser by reason of a deceit practiced, he who employs and puts trust and confidence in the deceiver should be the loser, rather than a stranger." The principle is stated another way as follows: "Where loss is caused by the fraud of a third person, such loss should fall on the one whose act enabled such fraud to be committed." See Maxims of Equity, 10 Rawle C. L., p. 378, p. 128. These are only different ways of stating the principle contained in the syllabus. The majority of the Court think that Bernard and the beneficiaries in the trust deed are the ones who first put trust and confidence in Ross, and thereby enabled him to deceive, and they should be the losers.