Case Name: Eliza A. Munoz, Admr'x, Resp't, v. George Wilson et al., App'lts
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1886-12-14
Citations: 6 N.Y. St. Rep. 66
Docket Number: 
Parties: Eliza A. Munoz, Admr’x, Resp’t, v. George Wilson et al., App’lts.
Judges: 
Reporter: New York State Reporter
Volume: 6
Pages: 66–70

Head Matter:
Eliza A. Munoz, Admr’x, Resp’t, v. George Wilson et al., App’lts.
(Supreme Court, General Term, Second Department,
Filed December 14, 1886.)
1. Mortgage—At what time it becomes effectual.
One owning the premises in suit in this action on February 6, 1878, conveyed the same with others to his nephew by deed of that date acknowledged on the thirteenth day of the same month and recorded on the following day. This conveyance was without consideration and executed with intent to defraud creditors. The grantee at the same time executed a deed conveying the same premises to his grantor’s wife and bearing even date with the first deed and acknowledged on the same day with it, but not recorded until October 4, 1881. He also, on October 2, 1879, by direction of the grantor, made a mortgage of the premises in question to the mother of this plaintiff, which was acknowledged December 27,1879, and recorded on the thirty-first day of that month. The mortgage was made to secure an indebtedness of the original owner of the premises to the mortgagee. In an action brought to foreclose the mortgage, its validity was attacked on the ground that it had no legal inception. Held, that the fact that the party at whose instigation the mortgage was made retained it after it was recorded, did not affect its validity; that when it was delivered by the mortgagor to the agent of tne mortgagee it became valid and effectual as a mortgage.
2. Recording act—Bona fide purchaser.
Held, that the mortgagee, considering the facts of the case, must be regarded as a bona fide purchaser under 1 R. S., 756, § 1. (Dvkman, J., dissents).

Opinion:
Pratt, J.
The only theory that can be predicated upon the evidence in this case is that expressed by the judge who tried the cause at special term, in his findings of fact:
That Michael K. Wilson was the real owner of the mortgaged premises, was indebted to Mrs. Olay, the mother of the plaintiff, and caused George Wilson, who held the nominal title in trust for Michael, to make the mortgage to secure such indebtedness is undoubtedly true, and it is also true that Michael, with a designio cheat his creditors, made a conveyance of the same property to George, and caused the latter to make a deed of the same to Eliza A., the defendant.
That George held the possession of the property and managed it for the benefit of Michael seems clear, and that the latter controlled the former in all acts concerning the property is the only reasonable conclusion to be drawn from the testimony.
The evidence is abundant and conclusive as to the existence of an indebtedness to the amount of the mortgage from Michael to Mrs. Olay. lío other reasonable construction can be placed upon the conduct of Michael than that he owed Mrs. Olay and intended to secure her by this mortgage. The making of the mortgage without consideration would not aid his scheme to defraud his creditors, unless they were both guilty of a conspiracy and that Mrs. Olay was ready to commit perjury to assist Michael in defrauding his creditors. We can indulge in no such presumption.
The facts are equally clear upon the question of the due execution and delivery of the mortgage.
That George signed, sealed and delivered the mortgage to Michael without condition or qualification, is undisputed, and that the latter assumed to act for Mrs. Clay and received and recorded the mortgage for her benefit, is well established by the proofs.
The fact that Michael retained the mortgage after it was recorded does not affect the validity of the instrument. When it was delivered by George and accepted by Michael for Mrs. Olay, it became valid and effectual as a mortgage and what may have transpired after that was immaterial.
The efficiency of a deed depends upon its being executed according to the statutory formalities and being uncondi tionally delivered by the maker to the grantee or his agent. Wallace v. Berdell, 97 N. Y., 13-23; Fisher v. Hall, 41 id., 416; Church v. Gilman, 15 Wend., 656; Moore v. Giles, 49 Conn., 570.
That George delivered the mortgage and forever ceased to have any control of it afterwards cannot be questioned.
It is equally clear that Michael accepted the mortgage in behalf of Mrs. Clay and intended to make it a valid and effectual security in her hands. Lawrence v. Farley, 24 Hun, 293; Moore v. Giles, supra.
The court below was right in holding that the mortgage in suit was prior and paramount to the deed to Eliza Munoz.
Leaving out of view the principle that a fraudulent conveyance cannot be set up to defeat a junior mortgage, the fact here is that the mortgage was delivered prior in point of time to the deed.
We also think that Mrs. Clay must be regarded, under the facts disclosed, as a purchaser in good faith under the recording act. 1 Rev. Stat., 756, § 1.
Michael managed the whole business; he intended to have the mortgage take effect prior to the deed, and accordingly had it recorded first.
There was evidently no intention to vest any title in Eliza Wilson prior to the recording of the mortgage, and possibly not at all, unless it became necessary in furtherance of the scheme to defraud creditors. This is shown by the fact that Eliza never knew she had any title until the deed was handed to her after it was recorded.
Mrs. Clay has since died, and it is not difficult to find a motive on the part of Michael to defeat this mortgage, but the evidence fails to sustain the defence, and the judgment must be affirmed, with costs.