Case Name: Nancy Sumner, administratrix of Azel Sumner, deceased, against Rhodes and others
Court: Connecticut Supreme Court
Jurisdiction: Connecticut
Decision Date: 1841-06
Citations: 14 Conn. 135
Docket Number: 
Parties: Nancy Sumner, administratrix of Azel Sumner, deceased, against Rhodes and others.
Judges: In this opinion the other Judges concurred.
Reporter: Connecticut Reports
Volume: 14
Pages: 135–140

Head Matter:
Nancy Sumner, administratrix of Azel Sumner, deceased, against Rhodes and others.
Where A and others, being jointly indebted to B, gave him their joint note, and mortgaged lands to secure the payment thereof, after which A paid to B the amount due on such note, and took from him an assignment of it and of all B’s interestin the mortgaged premises; it was held, that the purchase of the mortgage by A operated as payment only of his share of the debt; and that for the balance, he, or his assignee, was entitled to a decree of foreclosure against his co-mortgagors, or their assignees of the equity of redemption.
If A sells and conveys lands to B, upon his agreement to give A a note and a mortgage of the same lands ; and B gives a mortgage deed imperfectly executed ; B may resort to a court of equity, and have his title perfected.
And in such case, B is entitled to this relief, not only against A, who made the agreement, but against all subsequent purchasers having actual knowledge of B’s equitable title.
The record of a valid deed is constructive notice of the state of the title created by that deed, but it is not actual notice.
The record of a deed defective in a statute requisite, is not constructive notice.
Before a party having the legal title, can be postponed to one claiming a prior equitable title under a defective deed, it must appear that the former had actual notice of süch equitable title.
This wás a bill in chancery for a confirmation of title.and for a foreclosure.
In January, 1828, Silas Smith and Samuel E. Joy, being the owners of three lots of land in Thompson, sold and conveyed them to James Cunningham, Thomas Dike, Augustus Howe, Jacob Levins, John Chollar, Jude Sabin, James Dike and Erastus Buck. These grantees, who had constituted themselves a company for manufacturing purposes, agreed to give, for a part of the purchase money, one note to Sniitk and another to Joy, and to secure the payment of them, by a mortgage of the lands purchased. The note to Joy was given, and subsequently paid. The note to Smith was signed by all the members of the company, except Chollar. The mortgage deed was duly executed by two only of the company. Chollar did not sign it. The remaining five signed it, but did not acknowledge it; and*their execution was attested by only one subscribing witness. The note and mortgage deed were then delivered to Smith, who, by mistake, received the deed as one duly executed by all the company, except Chollar, and carried it to the town-clerk to be recorded. The titles of the several defendants were derived from the members of the company, by conveyances made subsequently to the delivery of the mortgage deed ; and they all had notice of Smith’s equitable title, at the times of taking their respective conveyances, except Rhodes and Hicks, who had no notice, unless the record of the mortgage deed was constructive notice to them. Some time after the delivery of the note and mortgag&, Cunningham paid to Smith the balance due to him upon his note, and took from Smith and Joy an assignment of the note, and of all their interest in the mortgaged premises ; and afterwards assigned them to Azel Sumri.er, who commenced the present suit, but having died during its pendency, it is now prosecuted by the plaintiff, as administratrix upon'his estate. •
,. The case, embracing these facts, (with others, which it is not necessary for the present purpose to state,) was reserved for the consideration and advice of this court.
Strong, for the plaintiff,
after remarking, that the plaintiff, being the holder, by assignment, of the note to secure which the mortgage in question was given, is entitled to the relief sought, unless some of the objections urged by the defendants ought to prevail, contended, 1. That the want of a due attestation and acknowledgment of the deed, did not preclude the plaintiff from such relief. In the first place, as between the original parties, these défects will not, in a court of equity, deprive the mortgagee of the benefit of the security. It was agreed to be given, and supposed to hate been given. A court of equity will consider that as done-, which was agreed to be done. . 1 Story’s Eq. 179, Secondly, subsequent pur- ■ chasers with notice, stand in the same situation as those from whom they purchase. 2 ⅜⅛. 254. 307. 301. 1 Story’s Eq. 383. Thirdly, this is true where the prior interest of which the subsequent purchaser has notice, is but an equitable one. 1 Story’s Eq. 384,5. Cobte’s Mort. 378. Fourthly, it makes no difference, with reference to this matter, whether the notice to subsequent purchasers, be actual or constructive. 1 Story’s Eq, 387. 2 Sug. Vend. 340. Fifthly, what is sufficient to put a party on inquiry, is sufficient to constitute notice. Shaw & al. v. Poor, 6 Pick. 86. Pidge v. Tyler (fe jal. 4 Mass. Rep. 541. 2 Sug. Vend. 335. Booth & al. v. Barnum & al. 9 Conn. Rep. 286. Peters & al. v. Goodrich, 3 ‘Conn. Rep. 146. Sigourney v. JWunn & al. 7 Conn. Rep. 324. Bolles v. Chauncey & al. 8 Conn. Rep. 389.
2. That the mortgage debt was not paid, by the assignment to Cunningham. First, the fact is not so found. Secondly, it was not so designed by the party. The object was an assignment of the mortgage security. Thirdly, courts of equity will look to the real object of the transaction ; and will not, except from necessity, give a construction to a finding that will defeat that object.
3. That the conveyance by Cunningham to Sumner was valid. First, it is not found to be fraudulent, but the reverse appears. Secondly, if it were so, creditors only could avoid it. [The counsel proceeded to anticipate and reply to other objections, which were not much insisted on, by the opposing counsel, nor taken into consideration, by the court, in their decision.]
Child and Backus, For the defendants,
contended, 1. That the plaintiff, as assignee of Cunningham, had no equitable claim. First, there was gross negligence on his part. Smith and Joy knew the facts; much more so did Cunningham. Secondly, the note was paid by Cunningham. Thirdly, there was not a bona fide transfer of the note to Sumner, the plaintiff’s intestate. He paid nothing. This is a contrivance between him and Cunningham to throw the debt upon the other parties. As against purchasers, Cunningham has no right to set up the deed;
2. That at any rate, the plaintiff, as against Hicks and Rhodes, was not entitled to relief. They are bona fide mortgagees and purchasers, without notice. They had no actual notice ; and the registry of the defective deed was not constructive notice to subsequent purchasers. Carter v¿ Champion & al. 8 Conn. Rep. 549. Watson & al. v. Wells, 5 Conn. Rep. 468.
3. That the want of acknowledgment rendered the instrument not merely defective, but void, as a deed. Pendleton v. Button, 3 Conn. Rep. 406. Stanton v. Button, 2 Conn. Rep. 527. Hayden & al. v. Westcott, 11 Conn. Rep. 527; [Some other objections were suggested, which it is not necessary to state.]

Opinion:
Waite, J.
The question arising upon these facts in the case, and upon which our opinion is asked, is, what are the equitable rights of the plaintiff against the other defendants.
It is very evident, that if each member of the company had given to Smith a separate note for his part of the debt due to him, and secured the payment by a separate mortgage of his interest in the lands, Cunningham might have paid his own debt, purchased of Smith the other mortgages, and sustained a bill for a foreclosure against each mortgagor. And had they all united in a joint note and mortgage, their equitable rights, as among themselves, would remain the same. It would have been the duty of each one to pay his portion of the debt; and his interest in the lands would in equity be considered as pledged for the payment of his share.
Smith indeed might have sued all, and collected his debt of either, and might have retained his lien upon all the lands mortgaged until his whole debt was paid. And had he compelled Cunningham to pay the whole debt, Cunningham would in equity have been entitled to the benefit of the mortgage given by the other members of the company, for the security of their respective shares. So, if he has purchased of Smith the mortgage, and taken an assignment to himself, that part of the debt which it belonged to him to pay, must be considered as paid, and as to the balance, he may be considered in equity as the assignee of Smith, and become entitled to hold the respective shares of the other mortgagors until their portions of the debt are paid. And we see no difficulty in his sustaining a bill for a foreclosure against them, or their assignees of the equity of redemption.
The plaintiff in the present case stands in the same situation as Cunningham did, and is entitled to the same relief that he would have been entitled to, had no assignment been made by him.
But the mortgage deed in this case has not been duly executed, by all those persons who had agreed to do it. Now, it is perfectly well settled, by repeated decisions, that if Smith had sold his lands to the members of the company, upon their agreement to give him a note and mortgage deed of the same land, duly executed bv them, and they had given him a deed imperfectly executed, he might resort to a court of chancery and have his title perfected. Carter v. Champion & al. 8 Conn. Rep. 549. Watson & al. v. Wells, 5 Conn. Rep. 468. Smith v. Chapman, 4 Conn. Rep. 344.
And he is entitled to this relief, not only against the members of the company who make the agreement, but against all subsequent purchasers having actual knowledge of his equitable title. They take the lands subject not only to all legal incumbrances upon them, but to all equitable incum-brances of which they have notice.
The committee in this case has found, that two of the defendants had no notice of Smith's equitable title, unless the record is constructive notice to them.
Our law makes the record of a valid deed constructive notice of the state of the title created by that deed, but not actual notice.
In a recent case, this court held that the recording of a deed, defective in consequence of having but one legal witness, was not constructive notice of such instrument. Carter v. Champion & al. 8 Conn. Rep. 549. If, therefore, each member of this company had given Smith a separate mortgage deed of his interest in the lands to secure the note, and a part of these deeds had been duly executed, and the others but imperfectly, so as to pass no legal title, the record of the former would be constructive notice to subsequent purchasers ; but, upon the authority of the case just cited, the record of the others would not have that effect. In our opinion, the same effect is produced, by the parties uniting in the same deed. So far as the deed is valid, the record operates as affording notice, but has no effect beyond that.
If indeed it had appeared, that the two defendants had actual notice of the contents of the deed, as recorded, the case would be different. Whether a purchaser has, or has not, actual notice of the contents of a prior deed properly executed and duly recorded, the effect is the same. The policy of our law makes the record sufficient notice. But the case is otherwise when the deed is defective. Before his legal title can be postponed to a prior equitable title, it must appear that he had actual notice of such equity.
Our opinion, therefore, is, that the purchase of the mortgage by Cunningham operates as payment only of his share of the debt, being one eighth part; and that for "the balance the plaintiff is entitled to a foreclosure: that she is entitled to have Smith's equitable title perfected as against all the defendants, who had actual notice of it, at the time of taking their respective conveyances; but that the record of his deed is not constructive notice of the mere equitable title.
In this opinion the other Judges concurred.
Decree for plaintiff.