Court Opinion

ID: 6961545
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:46:25.815405+00
Date Added: 2024-06-11T16:08:27.472584
License: Public Domain

Mr. Justice Dickey : I concur in this decision. When the mortgagee bought the lands, or rather the equity of redemption, had he been at that time the holder of the notes secured by the mortgage, the mortgage would have become merged, and the title would have stood, by operation of law, complete in the mortgagee, divested of any lien of the mortgage, unless, for some peculiar reason, he chose to keep the mortgage alive. The release of the mortgage of record was a declaration that he did not so choose. Bunyan having assigned the notes, was a trustee for Ogle, but his trust relation was not known to the bank. Under, the circumstances there was no presumption that the payee of a promissory note had assigned the same. . The second mortgagee in this case, as I think, had a right to assume that the payee of the notes, if they were not paid, still held the same, and that the mortgage had merged. The release by the mortgagee in the first mortgage was simply a declaration on his part that he did not desire to keep alive that mortgage made upon property which he himself then owned. There is no hardship in this. When a man buys notes secured by mortgage he becomes thereby the equitable assignee of the mortgage, and acquires an equitable interest in the mortgaged lands. If he wishes to protect that interest against subsequent purchasers, he may do so by taking a written assignment of the mortgage, and placing that assignment upon record. Possibly a record of the assignment of the note would be sufficient. Where it is the duty of any one to see that commercial paper is paid, a payment to the payee not in possession of the paper will not affect the assignee. That was the case in Keohane v. Smith, and on that point that case turned. In that case, had the second mortgagee sold and assigned to an innocent purchaser the note and mortgage, and had that assignment been placed upon record, the ease ought to have been decided against the holder of the note secured by the first mortgage. The distinction between that case and this consists, in my judgment, in the fact that there the second mortgagee, in substance, undertook to pay the debt in the first mortgage, and by her own negligence paid the wrong .man. Here the second mortgagee did not undertake to discharge the first mortgage debt. He relied upon a release by the trustee, who he had a right to assume had done his duty.