Page:Harvard Law Review Volume 1.djvu/16

 assignee under a written assignment procured by fraud. This qualification is supposed to be an illustration of the principle of equitable estoppel. But an estoppel implies a variance between the real and the apparent fact. If, however, an assignment is a power of collection and substitution, it follows that in the case of a fraudulent assignment this essential feature of an estoppel is wanting. There is an identity between the real and the apparent fact. The fraudulent assignee not only purports to have, but actually has, the power of collection and substitution. He is in duty bound, it is true, not to exercise the power to the prejudice of his assignor; but his duty is the same as that which fastens upon the conscience of a fraudulent vendee of land not to convey the land to the detriment of the vendor. The decision in Moore v. Metropolitan Bank, is therefore repugnant to the English rule which the courts in New York profess to follow.

In all the cases hitherto considered, the legal title, or other legal right of property, it has been assumed, was acquired at the time of the purchase. But he who advances money on the faith of a legal title that he already has, is equally entitled to protection. Thus, a first mortgagee, who makes subsequent advances in ignorance of a second mortgage, has priority as to those advances over the second mortgagee. He is in the same position as if he had surrendered his first mortgage and taken a fresh conveyance of the legal estate to secure the whole of his advance. Newman v. Newman illustrates the same principle. A cestui que trust, who had mortgaged his equity, released his interest to the trustee, who gave value without notice of the mortgage. The trustee, it was decided, could not be charged with the mortgage.

Ⅱ.It is commonly said that, as between adverse equitable claimants, he who is prior in time is stronger in law, unless by his representation or conduct he has misled the later incumbrancer. But the rule, so stated, requires, at least in point of principle, an