This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
-(c) Power or authority to execute. Since the satisfaction or release is merely an acknowledgment of the discharge of the debt or, if the debt is not discharged, a relinquishment of the right to proceed against the land to obtain payment thereof, the proper veyance by maker of trust deed to beneficiary); Bunger v. Pruitt, 73 Wash. 569, 132 Pac. 237.
46. Center v. Elgin City Banking Co., 185 111. 534, 57 N. E. 439; Gillig v. Maass, 28 N. Y. 191.
47. Waters v. Waters, 20 Iowa, 363, 89 Am. Dec. 540; Willhite v. Berry, 232 111. 331,-83 N. E. 852; Washington County R. Co. v. Canadian Mills Co., 104 Me. 527,
72 Atl. 491; Gille v. Hunt, 35 Minn. 357, 29 N. W. 2; Nickell v. Tracy, 100 N. Y. App. Div. 80, 91 N. Y. Supp. 287; Mason v. Beach, 55 Wis. 607, 13 N. W. 884.
48. Wade v. Howard, 6 Pick. (Mass.) 492; Allen v. Leominis-ter Sav. Bank, 134 Mass. 580; Mutual Building & Loan Ass'n v. Wyeth, 105 Ala. 639, 17 So. 45.
49. Ante, $ 640(e).
A release or satisfaction of the mortgage may bo executed or effected by the agent of the holder of the mortgage debt, and the statutes quite frequently contain provisions as to the mode of authorization of such attorney. Apart from statute, and so far as the release or satisfaction can be regarded as merely a discharge of the debt, it would seem that a verbal authority would be sufficient. But a release or satisfaction executed by one acting under merely verbal authority would afford but little, if any, protection to subsequent purchasers of the property, and the same may be said as to a written authority, if this is not recorded. It has accordingly been decided that a purchaser of property is not bound to accept the title if the satisfaction of a mortgage is by an attorney in fact whose authority does not appear of record.51 And it has been decided that in the case of any satisfaction or discharge by a person other than the apparent owner of the debt, a subsequent purchaser is under an obligation to inquire as to the authority by which such person is acting.52 The fact, however, that the authority to execute the satisfaction or other discharge does not appear of record obviously does not show a lack of such authority, and that the satisfaction or discharge purports to be executed by an agent has been held to put a subsequent purchaser of the mortgage debt on notice as to whether he did not have authority, though his authority does not appear of record.53 One having authority to release on payment is ordinarily presumed, in executing the release, to have acted only in accord with his authority.54
50. Wall v. Bissell, 125 U. S. 382, 31 L. Ed. 772; Heilig v. Hei-lig, 215 Pa. 256, 64 Atl. 442.
51. O'Neill v. Douthitt, 40 Kan. 689, 20 Pac. 493.
52. Swartout v. Curtis, 5 N. Y. 301, 55 Am., Dec. 345. That one purchased land on the strength of a satisfaction of record by a third person, attested by the recorder, such third person having intended to satisfy another mortgage, was held not to protect him.
Brown v. Henry, 106 Pa. St. 262.
As to the effect of cancellation by the clerk, without authority, under the New Jersey law, as protecting a subsequent purchaser, see Harris v. Cook, 28 N. J. Eq. 345; Harrison v. N. J. R. R. & T. Co., 19 N. J. Eq. 488; Baldwin v. Howell, 45 N. J. Eq. 519. 15 Atl. 236; Baldwin v. Howell, 45 N. J. Eq. 519, 15 Atl. 236; Collignon v. Collignon, 52 N. J. Eq. 516, 28 Atl. 794.
In the case of a deed of trust to secure a debt, which authorizes the trustee to execute a release upon payment, a subsequent purchaser of the land is, by the fact that a release by the trustee was executed before the maturity of the debt, ordinarily regarded as put on inquiry as to whether the debt was paid, so as to justify the release.55"56 But this has been held not to be the case when there was an option to pay the debt before the date of maturity,57 or when the beneficial title to the land appeared on the records to be vested in the holder of the debt secured.58 And ordinarily, it seems, a release executed by the trustee after the maturity of the debt secured will protect a subsequent bona fide purchaser of the land.59 A purchaser of the
53. See Adams v. Hopkins, 144 Cal. 19, 77 Pac. 712.
54. Williams v. Jackson, 107 U. S. 478, 27 L. Ed. 529; Porter v. Stuart, 227 Fed. 840, 142 C. C. A. 364. Compare Hutchings r. Clark, 64 Cal. 228, 30 Pac. 805.
55-56. Jackson v. Blackwood, 1 MacAr. & M. (Dist. Col.) 188; Lang v. Metzger, 86 111. App. 117. See Weldon v. Tallman, 67 Fed. 986, 15 C. C. A. 138; Murto v. Lemon, 19 Colo. App. 314, 75 Pac. 160;McPherson v. Rollins, 107 N. Y. 316, 1 Am. St. Rep. 826, 14 N. E. 411. So where the beneficial interest in the land had become vested, as appeared of record, in the trustee at the time of the release made before maturity of the debt. Swift v. Smith, 102 U. S. 442, 26 L. Ed. 193; Appelman v. Gara, 22 Colo. 397, 45 Pac. 366. The expressions in Vogel v. Troy, 232 111. 481, 83 N. E. 960, appear tc be to a different effect.
57. Lennartz v. Quilty, 191 111. 174, 85 Am. St. Rep. 260, 60 N. E. 913.
58. Havighorst v. Bowen, 214 111. 90, 73 N. E. 402.
59. Day v. Brenton, 102 Iowa, land with notice that the debt has not been paid is obviously not protected by a release made by the trustee.60 Nor is a purchaser, whether with or without notice that the debt is still unpaid, protected by a release made by the trustee, if the statute provides that the trustee shall have no authority to execute a release or satisfaction.61 A release by one named as mortgagee in a mortgage securing a note in favor of another, but payment of which to the mortgagee was authorized, has been regarded as sufficient in favor of a bona fide purchaser of the land.62
- (d) Execution by assignor. After the assignment of the mortgage debt, as the assignor has no right to receive payment on account of the obligation,63 so he has no right to give a release or satisfaction of the mortgage.64 If he undertakes so to do, the assignee, suffering loss by such action, may recover damages.65 And, in case the rights of innocent third persons have not intervened, the assignee is entitled to have the release or satisfaction cancelled by the decree of a court of equity.66