Rodgers v. Peckham

Mortgage—Reooro or Assignment—Subsequent Payment to Mortgagee —Conveyance in Satisfaction.—Construing together sections 2934 and 2935 of the Civil Code, the record of the assignment of a mortgage by the mortgagee operates as notice thereof to the mortgagor, so as to invalidate any payment made hy him to the original mortgagee, after he has ceased to be a holder of the note and mortgage; and the mortgagor must he deemed to have constructive notice of the assignment, when thereafter conveying the mortgaged land to the mortgagee in payment of the note, and such payment and conveyance is not valid and binding upon the assignee of the notes and mortgage, though the mortgagor had no actual notice of the assignment.

Id.—Assignment as Security—Agency—Authority to Mortgagee to Collect—Conveyance in Satisfaction not Authorized.—The fact that the notes and mortgage were assigned by the mortgagor as collateral security, and that the assignee gave to the mortgagee verbal authority to collect money due on the notes held as collateral security, does not tend to show authority from the assignee to the mortgagee to take the mortgaged land or anything but money in payment of the notes.

In.—Ostensible Agency not Shown—Letter of Agent of Assignee.—A party maintaining that an ostensible authority existed must prove that he knew of the facts giving color of authority to the supposed agent; and a letter written by an agent of the assignee of the notes and mortgage to a third party subsequently to an unauthorized conveyance by the mortgagor to the mortgagee, in which an agency in the mortgagee to collect interest was recognized, does not tend to show ostensible agency in the mortgagee to receive the conveyance in satisfaction of the notes and mortgage, there being no proof that the mortgagor or mortgagee, or a purchaser from the mortgagee, had any knowledge of the existence of the letter.

Ed.—Rights of Purchaser from Mortgagee—Constructive Notice.—A purchaser from the mortgagee, who received the unauthorized conveyance from the mortgagor in satisfaction of the notes and mortgage, has no greater rights against the assignee of the mortgage than those possessed by the mortgagee, but took with constructive notice of the mortgage, and that it had not been satisfied or discharged on the record, and held the land subject to the lien of the mortgage upon it in favor of the assignee.

Id.—Cross-complaint Treated as an Answer at Trial—Improper Default. Where a so called cross-complaint in an action to foreclose a mortgage was in effect only an answer, and was treated as such during the trial, the entry of plaintiff's default long after the trial, for not answering or demurring thereto, cannot aid the defendants upon appeal from a judgment in favor of the plaintiff.