Opinion ID: 2176933
Heading Depth: 1
Heading Rank: 6

Heading: Discharge of Junior Mortgages in Equity

Text: Another principle which was well-established in the English common law was that courts of equity should apply the same rules of property as those applied in the courts of law, unless doing so would work injustice. See 3 Blackstone, Commentaries on the Laws of England -36. [10] Section 371 reflects the General Assembly's application of that principle to equitable foreclosures and sales of real property ordered in the Court of Chancery, which may be given the same force and effect as sales pursuant to writs of scire facias sur mortgage in Superior Court. See also Stidham v. Brooks, 5 A.2d at 526. Accordingly, the Court of Chancery has both the common law and statutory authority to order the sale of real estate with the same effect as a sale ordered by the Superior Court: Such sales shall be as available in law to the vendees [in the Court of Chancery], as sales of land seized and sold upon judgment and execution are available by virtue of any law of this State. 10 Del.C. § 371. The recognized purpose of the Delaware recording statute is to afford notice of the document's contents, and of all rights, title, or interests, legal or equitable, created by or embraced within it, to every person subsequently dealing with the subject matter whose interest or duty it is to make a search of the records. Conly v. Industrial Trust Co., Del.Ch., 29 A.2d 601, 602 (1943) (emphasis added) (quoting 2 Pomeroy, Equity Jurisprudence § 649 (4th ed.)); Winchester v. Parm, Del.Ch., 141 A. 271, 275 (1928). The Delaware statute reflects a legislative judgment that requiring constructive notice by timely recordation in virtually every case, rather than permitting the consideration of a third party's actual notice, promotes the reliability and consistency of the mortgage priority system for real property. [11] See Conly v. Industrial Trust Co., 29 A.2d at 602. See also 4 Kent, Commentaries on American Law . Delaware's mortgage recording statute for lands or tenements is a pure race statute. 25 Del.C. § 2106. As such, the time of recording is determinative of priority. Id.; First Mortgage Co. v. Federal Leasing Corp., Del.Supr., 456 A.2d 794, 795 (1982). In this case, the CoreStates mortgage was recorded in compliance with Section 2106. The record reflects that Handler had both constructive and actual notice of the CoreStates prior mortgage. It should have also known that as a matter of established Delaware law, the CoreStates mortgage was valid and enforceable in equity. Monroe Park v. Metropolitan Life Ins. Co., 457 A.2d at 735-36. In fact, the record reflects that the Court of Chancery noted that the assignors of the mortgage to Handler, Grossi and Vilone, had acknowledged in writing to CoreStates that the CoreStates prior mortgage had priority over their subsequent mortgage. In an equitable foreclosure action: The correct form of a decree in a bill [in equity] by a mortgagee is to find the making of the mortgage; the lien acquired thereby, in case there are other incumbrances or rights; the amount due thereon, if it be security for a debt; and an order for a sale of the mortgaged property so that from the proceeds of sale the debt may be paid. Malsberger v. Parsons, Del.Ch., 100 A. 786, 787 (1917) (emphasis added). The record supports the Court of Chancery's determination that CoreStates equitable mortgage was a valid first lien on the Hitchens Farm property. The final form of decree correctly provided for the extinguishment of all liens which were junior to the CoreStates equitable mortgage. Therefore, the Court of Chancery properly discharged Handler's subsequently recorded legal mortgage.