Court Opinion

ID: 6127022
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:35:57.854522+00
Date Added: 2024-06-11T08:38:27.819140
License: Public Domain

Learned, P. J.:
The case of New York Life Insurance and Trust Company v. Beebe (7 N. Y., 364), is quite similar to the present. It was there held that the declarations of the mortgagee, in substance that the mortgage was given to secure a pre-existing debt did, in effect, deny that he was acting as agent for the mortgagor; and therefore that the mortgagor was not estopped thereby from showing that the mortgage was usurious. But that case was cited on the argument of Ahern v. Goodspeed (72 N. Y., 108), and seems to have been either disregarded or overruled. And this last case is like the present. There is no difference, except that the security sold, in the one, was a note and in the other was a bond and mortgage. The *187bond and mortgage, in tbe present case, like the note in Ahern v. Goodspeed, were without consideration until they were negotiated and they were .negotiated at a usurious rate.
The only question is whether the defendant is estopped iron, setting up usury by the statement made by the person who negotiated the security for him. And it seems somewhat inconsistent that he should be thus estopped, when the very statement that the mortgage was valid was, itself, a denial that the person who made it was an agent of the defendant. For, if the mortgage was, in fact, a valid security in the hands of the mortgagee, then he was not the agent of the mortgagor to sell it. And it is generally thought, that to create an estoppel in pais, the person, to whom the statement is made, must have relied upon it as the statement of the person estopped.
However, the case of Ahern v. Goodspeed necessarily holds that an estoppel may be created, although the person, to whom the statement is made, does not know that the person making it is the agent of the person estopped, and even where the statement itself implies a denial of such agency.
Following that decision we affirm the judgment, with costs.
Boardman, J.:
The mortgagee was the agent of the mortgagor however much he lied. His representation was therefore the mortgagor’s declaration and binds him just as much and just as fairly, as though the mortgagor himself had signed such a declaration to induce a third and innocent party to buy it.
In this way I concur in the affirmance of the judgment, with costs.
LANDON, J.:
I concur. I infer from thé evidence that the purpose of the mortgagor was to enable the mortgagee to represent to the buyer of the mortgage that it was a valid security in the mortgagee’s hands; thus the more readily to sell it. If so the mortgagor should not escape from the representation, upon the faith of which the plaintiff parted with his money.
Judgment affirmed, with costs.