Van Hook v. Somerville Manufacturing Co.

Citations

• 5 N.J. Eq. 633

Syllabus

<p>On bond and mortgage by corporation, bill to foreclose and decree pro eonfesso against the corporation and some of the defendants: an answer by the other defendants admitting the execution in the manner sot forth in the bill of complaint precludes all inquiry into the fact and manner of execution.</p> <p>Tile Company executed a bond and mortgage to S., its financial agent, for $9600, for the parpóse (as alleged in the answer) of raising funds by the sale of these securities for the use of the Company. S. sold and assigned them to the complainant and appropriated tho proceeds of the sale to his own use. Held, That, admitting the fraud charged, the Company was still liable for the payment of the bond and mortgage in tho hands of bona fide purchasers without notice of the fraud. The Company having held out S. ’ as tho owner of the bond and mortgage, must in such case abide the consequences of the fraudulent conduct of its own agent.</p> <p>Upon an examination of the testimony of this case, Held, (contrary upon this point to the view taken by the Chancellor,) that there was no satisfactory evidence of any knowledge by the complainant of the alleged fraud of the agent; that the complainant stood in the position of a horn fide purchaser and assignee of the bond and mortgage and held a valid-and subsisting lien on the mortgaged premises.</p> <p>The defendants Loomis and Lyman took a conveyance from the corporation of the mortgaged premises, absolute on its face, but subject to a separate agreement signed by them and others, that they would hold- said promises for the benefit of themselves and sueh-of the parties to said agreement as should pay, pro rata, for the purchase, according to their respective interests. No trust appearing on the face of the conveyance to Loomis and Lyman, and it'not appearing in any way that the others had contributed to tho purchase and thereby become interested, Held, that the latter need not bo made parties to the suit.</p>