Court Opinion

ID: 6576600
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:34:53.412428+00
Date Added: 2024-06-11T15:57:07.432468
License: Public Domain

Poland, J.
The doctrine that the deposit of the title deeds of an estate, as a security for a loan or advance of money, constitutes an equitable mortgage upon the estate, seems to be firmly *502established in England by many decisions, though not without very serious opposition from Lord Eldon, Sir William Grant, and other eminent judges.
It was very justly objected to it by Lord Eldon, that it was in fact allowing a party to make a mortgage by parol, and so virtually repealing that section of the statute of frauds requiring all contracts for the sale of lands, or any interest therein to be in writing. But notwithstanding these objections, the law in England seems to be settled in favor of equitable mortgages, by the mere deposit of title deeds.
It is manifest enough, that under the system of registration of all conveyances of land which obtains so universally in this country, there is far less propriety in holding that a valid mortgage may be created by the mere deposit of title deeds than in England, where formerly at least, and when this doctrine was established there, the possession of the title deeds was the appropriate, if not the only evidence of the owner’s title, and necessary for the assertion and maintenance thereof. Under our registry system, the mere possession of the title deeds is of no practical importance or advantage to the owner of the estate, nor in any material degree essential to the maintenance or defence of his title, nor are they regarged as- the usual or necessary insignia of title by purchasers or incumbrancers of the estate, but all inquiries and examinations as to title are made at the proper office for the record of the title, and the owners of estates do not regard the security and permanence of their titles as depending mainly upon their preserving and keeping in possession the title deeds, but in having them enrolled upon the proper record.
I-Ience it is apparent that the great weight and consequence attached in England to the possession of the title deeds can have properly no such application here.
In this country there seems not as yet to be any settled course of decision upon this subject. In several of the States, especially those which early adopted the doctrines of the English court of chancery with a separate chancery jurisdiction, the English doctrine of creating mortgages by the mere deposit of title deeds, has been adopted. This is true of New York and South Caroliná.
In some other States the English doctrine on this subject has *503been wholly rejected, not only as being contrary to the statute of frauds, but as being wholly unnecessary under, if not incompatible with, our registry system-. This is the case in Pennsylvania aud Kentucky.
¥e are not aware that the subject has ever been agitated before the tribunals of this State, and there has not-, to our knowledge, ever been an attempt before, to create a lien upon real estate by depositing the title deeds. We certainly are not now prepared to say this inode of creating an incumbrance is valid by the law of the State, nor do we feel called upon in the present case to decide the question at all in order to dispose of this appeal. .
The deed of the premises in question, from Bowen to George Bicknell, being duly executed and delivered between the parties-, invested George Bicknell with the legal title in fee, and as between all persons claiming under him, it was immaterial whether the deed was ever recorded or not; it neither made his title better nor worse.
Now, granting to the defendant Hale all that he claims, both in fact and in law, from the transactions between himself and George Bicknell, he had acquired an equitable mortgage upon the premises to secure the advances he had made to George Bicknell to pay for the land and to erect the building thereon. The legal title remained wholly in Bicknell, and if Hale had an equitable mortgage which he could enforce, still, Bicknell owned the equity of redemption, which he might properly convey to the oiato'r, even if the orator had notice of the existence of Hale’s equitable mortgage, so that the title he took would be subservient to it.
In this view, the legal title passed to the plaintiff, subject to the equitable mortgage of Hale, both claiming title from George Bicknell, but Hale had possession of the deed to George Bicknell, and the same was not recorded.
It might admit of doubt upon the proof in the case whether the deed from George Bicknell to Hale was deposited as security for the advances Hale made, or whether it was delivered over merely to have a mortgage made from it, but we do not regard it as material to the decision which way it was. There was no agreement or contract that the deed should not be recorded, and there *504not beirig any, we think any person, who had become the owner of the title or any part of it from George Bicknell, had the right to claim the deed to be -recorded so as to show the title' into George Bicknell, under whom both' claimed. Upon the record the title still appeared to be in Bowen, and the estate might be in danger from attachments by his creditors, or by sale from him to some Iona fide purchaser, without notice; at least, these dangers appear just as formidable as those urged by the defendant Hale, why he should not be required to have the deed recorded, and thus show the legal title on the record, as it is in fact, in the plaintiff. Nor is it apparent to us how this can in any manner affect any rights-between the plaintiff and Hale, or prevent Hale from enforcing his claim upon the premises against the plaintiff, provided he has any valid claim,
There is another ground on which we think the decree of thé chancellor might be supported. The defendant Hale, in his answer, states the contract between him and George Bieküell to be in writing, and professes to set it out, The answer is trav-> ersed, which of course throws upon him the burden of proving the contract. Being in writing it could only be proved by production, or if lost, by proving its conterits. It is not produced Or proved in any manner whatever, and it does not appear to us that there is any proper proof of the contract on which Halé bases his claim to hold the deed, or to establish his interest in the premises.
The decree of the chancellor is affirmed with the costs in this court, and remanded to the court of chancery to' be enforced.