Court Opinion

ID: 9640121
Source: CourtListenerOpinion
Date Created: 2023-08-22 16:57:53.724237+00
Date Added: 2024-06-11T18:10:26.679289
License: Public Domain

WINTERSHEIMER, Justice,
dissenting.
This extended case was completely unnecessary. If only the mortgage had been signed at the end in conformity with the Statute of Frauds, this aspect of the lawsuit would never have been filed, an appeal never *632taken, discretionary review would not have been granted, and this Court would not have considered the matter and rendered an opinion. A great deal of legal and judicial time could have been saved if the law and well-established Kentucky practice had been followed originally.
I respectfully dissent from the majority opinion because the mortgage in question had not been signed at the end prior to being filed for recording. The Court of Appeals was correct when it determined that First National did not have actual notice of the mortgage in controversy.
The mortgage would be enforceable as an equitable mortgage but only between the parties to the document and, thus, would have no effect on First National. The Court of Appeals correctly determined that in order to be enforceable, the first mortgage would have to be signed by the party to be charged with it pursuant to the Statute of Frauds, KRS 371.010. Any document which requires a signature is to be signed at the end of the writing. KRS 446.060. KRS 382.270 requires that a mortgage be acknowledged or proved and recorded in the proper office, which is generally considered to be the office of the county clerk. The signature at the end of Schedule C in this case was not sufficient to validate the mortgage.
It has been held that a mortgage which has not been acknowledged nor proved is not recordable and is not valid nor does it give notice to subsequent creditors. Starr Piano Co. v. Petrey, 168 Ky. 530, 182 S.W. 624 (1916). The trial court found that there was no valid evidence that First National had actual notice of the existence of a valid first mortgage.
In addition, it has been previously held that an equitable mortgage cannot relate back to the date of an attempted legal mortgage and can be enforced only as of the date of a court adjudication that it was an equitable mortgage. Borg-Warner Acceptance Corp. v. First National Bank of Prestonsburg, Ky.App., 577 S.W.2d 29 (1979). Certainly, in certain circumstances, an equitable lien can take priority over a subsequent valid and recorded mortgage acquired by actual notice. Tile House, Inc. v. Cumberland Federal Savings Bank, Ky., 942 S.W.2d 904 (1997). Tile House, Inc. does not apply because the instrument in question was never signed in conformity with the requirements of the Statute of Frauds.
The trial judge was not clearly erroneous when he found that the mortgage document did not contain a signature at the end, was not acknowledged or proved and contained no source of title. Consequently, he determined that there was no actual notice based on the record before him.
It would appear that this case could have easily been resolved through the exercise of professional diligence in obtaining a signature at the end of the document, properly acknowledged, with a source of title.
I would affirm the Court of Appeals and the circuit court.
LAMBERT, J., joins in this dissent.