Case Name: The Trustees for the Support of Public Schools v. Sallie J. Shotwell et al.
Court: New Jersey Court of Chancery
Jurisdiction: New Jersey
Decision Date: 1889-02
Citations: 45 N.J. Eq. 106
Docket Number: 
Parties: The Trustees for the Support of Public Schools v. Sallie J. Shotwell et al.
Judges: 
Reporter: New Jersey Equity Reports
Volume: 45
Pages: 106–108

Head Matter:
The Trustees for the Support of Public Schools v. Sallie J. Shotwell et al.
A mortgage on lands in the city of Rahway, assigned to the trustees for the-support of public schools, is prior in lien to assessments for improvements on the premises afterwards imposed by the city, although the assignment was-never recorded.
On bill to foreclose.
Mr. W. Y. Johnson, for the complainants.
Mr. Garret Berry, for the defendant city of Rahway.

Opinion:
Bird, V. C.
The bill and the proof show that the complainants' mortgage-was given in May, 1858, and in August of that year assigned to the complainants, who have held it ever since. The property embraced in the mortgage lies within the limits' of the city of. Rahway. In the year 1870 the city imposed an assessment for the city improvements and afterwards other assessments, none of which have been paid. The city claims that these assessments-are prior liens to the 'complainants' mortgage, by virtue of the-act of the legislature giving to such assessments the favor of a first lien in all cases. And the insistment is, that under the circumstances of this case this is so, notwithstanding the case of Trustees of Public Schools v. City of Trenton, 3 Stew. Eq. 667, which declares that the property of the state is not subject to the' provisions of the act upon which the city of Rahway now relies. The circumstance which it is thought so qualifies the case now to be decided is, that the complainants never had the assignment by which they hold their mortgage recorded. Because of this-omission it is insisted that the city was misled, to their prejudice,, and that the State is estopped.
Under the common law, I very much doubt if the State would have been in any peril of losing the benefit of the high prerogative accorded to it in the case cited by holding undisclosed their mortgage by an assignment. "We have, however, a statute re specting the assignments of mortgages and authorizing the recording of such assignments, passed in 1853. Has this enactment so far changed the rule of common law as to subordinate the complainants' mortgage to these assessments? I think the only-penalty to be visited upon the party not complying with the act is fixed by the act. The first section (Rev. p. 708 § 32) declares that such assignee " shall be bound by the proceedings and sale in any foreclosure suit against any previous holder." The third section provides "that any payment made to the assignor in good faith and without actual notice'of such assignment, and any release of said mortgaged premises or any part thereof to a person not having actual notice of such assignment, shall be as valid as if said mortgage had not been assigned."
I do not find anything in the Registry acts which will justify me in regarding this case as outside of the one above cited. In my judgment, the complainants5 mortgage is entitled to priority .in payment.