Swift v. Smith - 102 U.S. 442 (1880)
U.S. Supreme Court
Swift v. Smith, 102 U.S. 442 (1880)
Swift v. Smith
102 U.S. 442
1. A party who, before its maturity and for a valuable consideration, purchases mercantile paper from the apparent owner thereof acquires a right thereto which can only be defeated by proof of bad faith or of actual notice of such facts as impeach the validity of the transaction.
2. A., to secure the payment of his note to B., executed to C. a deed of trust of land of even date therewith, which was duly recorded. A. afterwards conveyed the land to D., and it became the property of C. through sundry mesne conveyances duly recorded, each of which, including that to C., recited that the land was subject to the deed of trust. C. then, to secure the payment of certain bonds, made a deed of trust of the land, which was duly recorded, and subsequently there was filed for record an instrument executed by him purporting to release to his grantor "all the right, title, interest, claim, and demand" which he, C., had acquired by virtue of the trust deed executed to him by A. to secure the note. The release did not acknowledge the payment of the note. C. thereafter made another deed of trust. E. was, long prior to the execution of the conveyances, except the deed of trust and that from A. to D., the lawful holder of A.'s note, it having for a valuable consideration been duly assigned to him before its maturity. Held that E. was entitled to the lien created by A.'s deed of trust.
3. The Court adheres to the rule announced in Brine v. Insurance Company, 96 U. S. 627, touching the statutory right of redeeming mortgaged lands in Illinois after a judicial sale under a decree of foreclosure of a mortgage or deed of trust.
The facts are stated in the opinion of the Court.