Court Opinion

ID: 6502947
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:15:32.575878+00
Date Added: 2024-06-11T15:54:39.304698
License: Public Domain

GOLDTHWAITE, J.
1. Considering mortgages of personal property as conveyances in trust for the purpose of securing debts, they are within the terms of the statute which *923declares such conveyances, unless recorded in the manner therein directed, shall be void against creditors or subsequent purchasers, without notice. [Dig. 256, § 5.] Similar protection had previously been given to bona fide purchasers and mortgagees, for a valuable consideration, of real estate, not having notice, against unregistered deeds. [Dig. 154, § 18.] Prom the similarity of terms used in these statutes, it seems evident, .the notice, to affect the subsequent purchaser, must be the same, whether the purchase is of real or personal estate. ] The question to be decided is, what is notice under these statutes ?
It will be remembered, the English statutes of registration were not common to the whole kingdom, and as we infer from the decisions, contained no exception of notice. [Le Neve v. Le Neve, 1 Vesey, 64; H. & B. Notes on Coke on Litt. 290, b. $ 11.] It was then entirely matter of equitable construction, when the Courts of Chancery first held, it was a fraud in the holder of a registered deed, to take the estate, when he had actual notice of the conveyance of the estate, by one which was not registered. Subsequent decisions there have established that the notice must be such as to fix a fraud on the conscience of the subsequent purchaser, and it is in this view the courts of England held that a lis pendens is not sufficient, as that is only constructive notice. [Wyatt v. Barwell, 19 Vesey, 435.] In the American courts, the rule is believed to be universal, that constructive notice is sufficient to prevent a subsequent registered deed from taking priority of one that is unregistered. [1 Story, § 403.] We cannot suppose the intention of the legislature, in these enactments, to be to exclude the same notice which would prevail against one purchasing property which never was, but only contracted to be, conveyed.
It is perfectly clear, that a bill filed for the specific performance of a contract, in relation to land, will affect a purchaser from the defendant pending the suit. And can it be imagined, that one having the actual title by mortgage, can be in a worse condition ? What distinction in principle is there to allow the rights of the complainant to be defeated by a subsequent purchase, when he has filed his bill to fore*924close a mortgage, and to sustain these rights when the contract is unexecuted by a conveyance?
We apprehend no answer can be given to these questions, which will establish the right in the one instance and not in the other. On principles of public policy, it has always been considered, that a suit in equity for a specific estate, or thing, has the effect to bind all parties who became interested pending the suit. [Murray v. Balow, 1 John. Oh. 566.] The very condition of this case is a strong illustration that the rule should be, as we conceive it to be, universal. It would be impossible in the nature of things, after the omission to register the mortgage, to giVe a notice so general that all the world should know it, and unless the suit affected the title in the possession of Shanes, it would at all times be in his power to defeat the mortgage by a sale to another. We have given more time and space to this case, because we find the Court ofjAppeals of Virginia, under similar circumstances, have decided, that the right of a mortgagor was defeated by a sale or mortgage,pendente lite. [Newman v. Chapman, 2 Rand. 93.] In Kentucky, however, the courts seem to hold an entire concurrence in the views expressed by us. [Thomas v. Southard, 2 Dana, 475; Doe v. Chaudron, 8 Ala. Rep. 570.]
In relation to the costs of the petition, the uniform practice of the court is not to reverse on such a question; it is therefore unimportant to decide whether they should, or should not have been given.
On the whole, we are entirely satisfied there is no error in the decree.
Decree affirmed.