Case ID: ad_15/html/0246-01.html
Source: Caselaw Access Project
Author: {"author": "Merwin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Mary Jane Armstrong, Respondent, v. Edward Combs, Appellant, Impleaded with Others.
    
      An assignment of a bond and mortgage, acknowledged before one of the assignees, is a nullity—its record is invalid — a subsequent assignee bound by the defect—want of possession of the bond and mortgage.
    
    An assignment of a bond and mortgage, acknowledged by the holder thereof before one of the assignees, is a nullity; the instrument, although in fact recorded, is not legally entitled to he recorded, and does not constitute constructive notice of its existence, and one, claiming under such assignees, being presumed to have examined the assignment to her assignors, is not a bona fide purchaser as against a person to whom the holder had assigned the same bond and mortgage, for value, by an assignment made prior, but recorded subsequently, to the assignment whose acknowledgment is thus invalid.
    In such a case the fact that through the fraud of her assignors the holder of the prior assignment has not possession of the bond and mortgage, does not affect the right of the mortgagor to pay to her the amount thereby secured to be paid.
    Appeal by the defendant, Edward Combs, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Warren on the 3d day of October, 1896, upon the report of a referee in an action brought for the foreclosure of a mortgage.
    
      L. C. Aldrich and D. T. Trumbull, Jr., for the appellant.
    
      Charles P. Coyle and A. Armstrong, Jr., for the respondent.
   Merwin, J.:

The mortgage sought to be foreclosed in this action is dated May 10, 1889, was executed by James M. Tucker to Joseph Wood, and duly recorded May 10, 1889. On March 1, 1890, Joseph Wood assigned and delivered the mortgage, and the bond accompanying the same, to Mary Jane Wood for a good and valuable consideration, the assignment being recorded on May 15,1891. On the 10th of September, 1890, Joseph Wood, as the referee finds, assigned this same bond and mortgage to Charles P. Coyle and JohnH. Cunningham, and delivered to them the same with the assignment, the latter being recorded December 24, 1890. On the 7th day of May, 1891, Coyle & Cunningham executed and delivered to the plaintiff an assignment of the said bond and mortgage. This is expressed to be “ for a good and valuable consideration to them in hand paid by the said party of the second part.” The bond and mortgage were delivered with the assignment, and the latter was recorded on the 12th of May, 1891. On the 28th of April, 1891, Tucker, the mortgagor, conveyed the premises covered by the mortgage to the defendant Combs, the latter assuming and agreeing to pay the mortgage. The deed to Combs was recorded September 23, 1891. On September 1, 1891, Combs paid the mortgage to Mary Jane Wood, and took from her a discharge, which was recorded June 15, 1892.

The question here is whether the payment by Combs to Mary Jane Wood is available against the plaintiff. There is evidence tending to show that Coyle & Cunningham, when they took their assignment, knew of the assignment to Mrs. Wood. The referee, however, does not pass on this question, but finds that the plaintiff was a purchaser in good faith and is entitled to protection, as the assignments from Joseph Wood to Coyle & Cunningham, and from them to the plaintiff, were recorded before the assignment to Mary Jane Wood. The finding that the plaintiff is a purchaser for value, without notice, rests only on presumptions to be drawn from the recital in the assignment to her.

The acknowledgment by Joseph Wood of the assignment to Coyle & Cunningham was taken before Mr. Cunningham, one of the assignees, as notary public. The defendant claims that such an acknowledgment is a nullity, and that, therefore, the assignment was not properly recorded, and, if not, did not give to Coyle & Cunningham or the plaintiff, their assignee, any priority over the prior assignment to Mrs. Wood.

AYe are not referred to any case in this State where the right of a grantee or assignee to take the acknowledgment of the execution of the instrument has been passed upon. In Goodhue v. Berrian (2 Sandf. Ch. 630) it is said that if the witness sworn by a commissioner of deeds to identify the grantor in a conveyance is the grantee, the certificate of the officer of its due acknowledgment furnishes no proof of its execution. In Lynch v. Livingston (6 N. Y. 422) it was held that relationship to the parties did not disqualify an officer from taking the acknowledgment, it being said that the act of taking and certifying the acknowledgment was a ministerial act. This case was followed in Remington Paper Co. v. O'Dougherty (81 N. Y. 474).

In other States the question has been frequently considered, and quite uniformly it lias been held that an acknowledgment by the grantor before the grantee is a nullity. (Groesbeck v. Seeley, 13 Mich. 330; Laprad v. Sherwood, 79 id. 520 ; Hammers v. Dole, 61 Ill. 307; Wilson v. Traer & Co., 20 Iowa, 231; City Bank of Boone v. Radtke, 87 id. 363; Hubble v. Wright, 23 Ind. 322; Bowden v. Parrish, 86 Va. 68 ; Wasson v. Connor, 54 Miss. 351; Hogans v. Carruth, 18 Fla. 587; Tiedeman on Real Prop. § 810; 3 Washb. on Real Prop. [4th ed.] 314 ; 1 Am. & Eng. Ency. of Law [2d ed.], 493, and cases -cited.)

In some cases it is said to be against public policy to allow the grantee to be the acknowledging officer; that such a rule would leave a broad door open to the perpetration of frauds and tend greatly to defeat the purpose of the registration laws. In others it is said that the act is a quasi judicial one and so not to be done by one in his own interest. In the Groesbeck case it was said: “We should have no hesitation in holding that a person could not take the acknowledgment of a deed made to himself. Such a point is too plain for doubt.” In some cases the questions were under recording acts, and the same rule was applied. In the case from 87 Iowa, the mortgage was to a partnership and the acknowledgment was before a notary who was one of the firm, though his name did not appear on the face of the instrument. It was held that the acknowledgment was void and the mortgage not entitled to record, and the record, in fact made, not constructive notice.

The object of acknowledgment and record is to make title secure and prevent frauds in conveyancing as well as to furnish proof of the due execution of conveyances. A history of the practice on that subject in this State will be found in Van Cortlandt v. Tozer (17 Wend. 338). The early acts will be found in 3 Revised Statutes (1st ed.), appendix, 5-46. It is very plain that when the right to acknowledge was provided for, it was not contemplated that the officer could be one of the parties to the instrument. The object of the act and the manner in which it was required to be done were utterly inconsistent with such an idea. A good deal of the formality has since disappeared, but the object remains and the law should be construed in the light of its original object and scope. The statute does not in terms say that a grantee may or may not be the acknowledging officer. It should not be deemed to give that right without an express provision to that effect. ' “ A thing within the letter is not within the statute if contrary to the intention of it.” (People v. Utica Ins. Co., 15 Johns. 358; Riggs v. Palmer, 115 N. Y. 506; Smith’s Comm, on State Const. Law § 701.)

It should be held, I think, that the acknowledgment before one of the assignees was a nullity. He was a party to the record and, therefore, disqualified.

In some cases it is said that if the defect is not apparent on.the record it may operate as constructive notice. (Bank of Benson v. Hove, 45 Minn. 40.) If not duly acknowledged, it is not properly on record, and if not properly there, it is not constructive notice. In 4 Kent’s Commentaries, *174, it is said : “A deed unduly registered, either from want of a valid acknowledgment or otherwise, is not notice according to the prevailing opinion in this country.” (See, also, Doe v. Roe, 1 Johns. Cas. 402; 1 Story’s Eq. Juris. § 404; Lemmer v. Morison, 89 Hun, 277.)

In the assignment to Coyle & Cunningham the parties of the second part are described as Coyle & Cunningham,” and the name of the notary as signed is John H. Cunningham.” In the assignment to plaintiff the parties of the first part are described as “ Charles P. Coyle & John H. Cunningham, composing the firm of Coyle & Cunningham,” and in the body of the instrument reference is made to the prior assignment as “ to Charles P. Coyle and John H. Cunningham, comprising the firm of Coyle & Cunningham.” The plaintiff, when she took her assignment, is presumed to have known its form and contents, and if she examined the assignment to her assignors, as she is presumed to have done, she presumptively knew that the notary was one of the parties. There is no proof that she did not know it, or as to what she paid for the mortgage except the recital in the assignment. We must, therefore, assume that the plaintiff knew the fact constituting the defect, and so, not in a position to say, although in a proper ease she might have a right to say, that as to her the record should not be deemed to be defective.

If the assignment to Coyle & Cunningham had been properly acknowledged and recorded, its priority of record to the assignment to Mary Jane Wood would have been constructive notice to Combs of a prior right. (Brewster v. Carnes, 103 N. Y. 556.) As, however, it was not properly recorded, it would not be such notice, and Combs had a right to pay to Mrs. Wood, although the assignment to plaintiff herself was recorded before Mrs. Wood’s. (Page v. Waring, 76 N. Y. 463.)

It is, however, claimed on the part of the plaintiff, that Combs, in paying Mrs. Wood, without the production and surrender of the bond and mortgage, was guilty of laches, and, therefore, still liable to plaintiff. The assignment to Mrs. Wood was first in time, and is found by the referee to be valid as between the parties. The subsequent attempted transfer by the mortgagee was, therefore, in fraud of the rights of Mrs. Wood. She continued to be the owuer and entitled to payment unless the plaintiff, by virtue of the recording act, acquired a better right. Failing in that, the possession of the bond and mortgage through the fraud of the mortgagee, did not, of itself, give the plaintiff any right to demand payment as against Mrs. Wood, the transfer to whom was on record when the payment was made to her. Mrs. Wood, as against the plaintiff, was entitled to payment. The claim of laches is not, we think, made out. Hop is the evidence sufficient to establish an estoppel against Mrs. Wood from claiming payment, by reason of the fact that she did not have possession of the bond and mortgage.

It follows that the judgment must be reversed.

All concurred.

Judgment reversed, referee discharged, and a new trial granted, costs to the appellant to abide the event.