Jordan v. Cheney

• Decision Date: 08 February 1883
• Citation: 74 Me. 359
• Parties: EBENEZER JORDON, administrator in equity, v. CHARLES J. CHENEY and others.
• Court: Maine Supreme Court

74 Me. 359

EBENEZER JORDON, administrator in equity, v. CHARLES J. CHENEY and others.

Supreme Judicial Court of Maine.

February 8, 1883

BILL IN EQUITY.

Heard on bill, answer and proof.

The bill was brought by the administrator of Ebenezer Jordan deceased, against Charles J. Cheney, Henry W. Oakes, assignee in insolvency of Charles P. Jordan, Junior, and John Smith and after stating the facts, the material parts of which are disclosed by the opinion, (Charles P. Jordan, Junior, was the mortgagee, who transferred and delivered the mortgage notes to the complainant, and John Smith was the mortgagor in the last mortgage which was assigned to Cheney,) the complainant prayed " that said mortgage so held by said complainant in his said capacity as administrator may be decreed to constitute a prior lien on said real estate to the mortgage so held by said Charles J. Cheney; and that a just and true account of all sums due said complainant from said Charles P Jordan, Junior, on the several notes aforesaid may be taken; and that said Charles J. Cheney be decreed to pay the same to your complainant; and in default thereof to place said complainant in possession of said real estate; and that said Charles J. Cheney, John Smith and Henry W. Oakes may be absolutely debarred and foreclosed of and from all right and equity of redemption in and to the said mortgaged premises or any and every interest in the same and every part thereof."

Charles J. Cheney was the only respondent who filed an answer.

Wm. P. Frye, John B. Cotton, Wallace H. White and Seth M. Carter, for the plaintiff, cited: Moore v. Ware, 38 Me. 496; Jones, Mortgages, § § 817, 820, 870, 872, 874; Eaton v. Simonds, 14 Pick 104; Hunt v. Hunt, 14 Pick. 384; Simonton v. Gray, 34 Me. 50; Stantons v. Thompson, 49 N.H. 279; Dexter v. Harris, 2 Mason's C. C. 531; Bailey v. Myrick, 50 Me. 171; Purdy v. Huntington, 42 N.Y. 334; Edgarton v. Young, 43 Ill. 464; Wolcott v. Winchester, 15 Gray 461; Greene v. Warnick, 64 N.Y. 220; Crooker v. Crooker, 46 Me. 250.

N. and J. A. Morrill, for the defendants, urged that the interest of the plaintiff in the mortgaged premises was only an equitable interest and that Mr. Cheney was a purchaser in good faith for a valuable consideration without notice of the trust and is therefore entitled to have the claim of the plaintiff postponed to his claim under the Smith mortgage. R. S., c. 73, § 12.

When a trustee sells a trust to a bona fide purchaser for a valuable consideration without notice of the trust such purchaser takes the estate discharged of the trust. 2 Story's Eq. Jur. (12 ed.) § 1264; Pierce v. Faunce, 47 Me. 513; Basset v. Nosworthy, 2 White and Tudor's Lead. Cas. Eq. 57.

The rule laid down in Greene v. Warnick, 64 N.Y. 220, is not law in this state. See Pierce v. Faunce, supra; Carpenter v. Longan, 16 Wall. 271.

Mr. Cheney was not bound to take notice of an assignment of the notes alone. 1 Jones, Mortgages, § 820.

The statutes and decisions of this state require that for the due protection of the public, the assignment of a mortgage should be recorded. Mitchell v. Burnham, 44 Me. 303.

Otherwise the purchaser would be held to the notice of a claim against which with the greatest diligence he could not guard.

It is to be noticed that Cheney was not taking an assignment of the mortgage, where a part of the notes secured by it had been previously assigned as in Moore v. Ware, 38 Me. 496.

Nor does the case at bar resemble the case supposed, in 1 Jones, Mortg. § 474, where are cited cases relied upon by the plaintiff here.

The case of Torrey, Adm'r, v. Deavitt, Adm'r, recently decided in Vermont, is just in point; the court there say, " If the assignee of the mortgage debt fails to take such precaution (to take and record an assignment of the mortgage) he is guilty of negligence and places power in the hands of the original mortgagee to commit a fraud upon innocent parties and must be postponed to the rights acquired by such parties in good faith, without notice of his antecedent rights in the premises."

WALTON J.

One who takes a mortgagee's title holds it in trust for the owner of the debt to secure which the mortgage was given. If a mortgage is given to secure negotiable promissory notes and the notes are transferred, the mortgagee and all claiming under him will hold the mortgaged property in trust for the holder of the notes. To secure this result it is not necessary that there should be any recorded transfer of the notes or mortgage. Nor is an assignment of the mortgage necessary. If the mortgage is duly recorded, the record is notice to all the world of the character of the mortgagee's title; and one taking title from or through him will obtain only a mortgagee's title, and be chargeable with notice that the notes are liable to be transferred, if they are not already transferred, and that he must hold the estate in trust for the holder of the notes to secure which the mortgage was given, whoever that holder may be. No...