Court Opinion

ID: 5461222
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:37:03.809543+00
Date Added: 2024-06-11T08:32:53.649056
License: Public Domain

By the Court, B. Darwih Smith, J.
The referee correctly held that the rights of the defendant Calvin Huntington, as a purchaser of the premises embraced in the mortgage previously assigned by his vendor to the plaintiff, are to be determined by the records in the clerk’s office and the facts fairly to be inferred from what was there fairly stated. It is immaterial whether Huntingtoh actually searched or examined the records. He is to be charged with all the knowledge *396and information which the fullest inspection of them would have imparted. From such inspection he would have learned, and must be presumed to know, that the premises which Minot Mitchell was proposing to sell to him were formerly-owned by said Mitchell, and were, on the 4th of June, 1855, conveyed by him by deed, for the consideration of $3000 therein expressed) to Joseph S. Mitchell, the latter at the same time giving back a mortgage ón said-land for the sum of $2000, part of the purchase money therefor, which mortgage was accompanied by a bond which provided, according to the recital in said mortgage, for the payment of said sum of $2000 in three years from date, with semi-annual interest. He wpuld also have learned from said records that three years afterwards, and four days after said bond and mortgage became due and payable, (July 10, 1858,) the said Joseph Mitchell re-conveyed the premises to the said Minot Mitchell for the same consideration expressed in the deed to him of July 4, 1855, ($3000,) by deed without covenants.
The legitimate inference from these facts, which embraced all the information to be derived from the registry of deeds and mortgages in the county clerk’s office of Monroe where this land was situated, was that the sale from Minot Mitchell to Joseph S. Mitchell was rescinded, and Minot took back the land for the balance remaining unpaid of the original purchase money and secured by said bond and mortgage, and repaid to Joseph S. the $1000 of purchase money paid on the purchase by the said Joseph S. to the said Minot Mitchell. This is the conclusion which would be naturally drawn by the simple inspection of the records. The reconveyance of the land would be presumed to be in discharge and satisfaction of the mortgage, inasrnuch as it did not appear that said mortgage had ever been assigned; no assignment of it appearing upon the records. The legal and equitable title thus appeared to be united in Minot Mitchell. The mortgage, I think, from these facts would be presumed to be merged in the legal title, and thus extinguished. Such, I think, would *397"be the natural inference and language of the records, and this the interpretation which would ordinarily be put upon the facts therein and thereby disclosed. But the learned referee who tried the case was of the opinion that the record of the mortgage was notice to Huntington, sufficient to put upon him the duty to inquire in respect to it, and require its production or discharge, and that he was not therefore a bona fide purchaser in contemplation of law, under the recording act. The opinion of the referee is based upon the cases of Brown v. Blydenburgh, (7 N. Y. Rep. 141,) and Kellogg v. Smith, (26 id. 18.) These cases would be entirely in •point and would be quite conclusive as authority upon the question, if Huntington had been a purchaser of the bond and mortgage executed -by Joseph S. Mitchell to Minot Mitchell, instead of being a grantee of the land. In Brown v. Blydenburgh, the mortgagor paid off his mortgage by a conveyance of the land to one Atwell, an assignee of the mortgage, instead of requiring the production of the bond and mortgage, and the court held that he remained liable upon the bond, which had been previously assigned to the plain-jiff. Judge Buggies says, in his opinion in the case: “In the common and usual course of business Atwell, if he had been the owner of the bond and mortgage, would have delivered them to Blydenburgh when the satisfaction was acknowledged, and it is against all probability that Blydenburgh would have paid the debt either in money or by a conveyance of the land, without inquiring for his bond.” So in Kellogg v. Smith, Buckley and Clafflih purchased of Bedell, the mortgagee, the bond and mortgage in question without requiring the production of either of the bond or mortgage, .and it appeared that the same had been previously assigned and delivered to the plaintiff, but said assignment had not been put upon record. The court held that it was the case of the purchase of a bond and mortgage which could be transferred simply by assignment and delivery, and was not •within the statute, and that the recording act was designed *398to protect purchasers of land, and not purchasers of debts or things in action. Judge G-ould said: “ The recording act can not be tortured into exercising any power over the sale of the bond.” Four of the judges concurred that the non-production of the bond and mortgage was such notice as to put the defendants on inquiry, and to deprive them of the protection given by the recording act to purchasers without notice. This was a case where the parties, the respondents, claiming to hold the bond and mortgage by assignment, purchased it without requiring its production or delivery, resting upon the fact that no assignment appeared upon record. Clearly this was not within the object and intention of the statute. They purchased property which passed by. delivery, and did not get possession of it or insist on its delivery. In this case Huntington purchased the land. He- had a right to rely upon the registry. He had a right to assume that it contained and showed all the' conveyances or liens which affected the title to the premises. The registry acts were designed for that purpose, to protect grantees and purchasers and mortgagees of the land against unrecorded conveyances or liens. Huntington purchased of, and took his title from, the party appearing by the record to have the legal and equitable title to the land, and he took a deed with covenants of seisin and warranty, which protected him against the mortgage, as against Minot Mitchell, the mortgagee, and his grantor. But supposing he was bound to inquire about this mortgage and whether it had been assigned or was outstanding as a valid security, of whom should he have inquired ? He did inquire of Minot Mitchell if the premises were unincumbered, and was informed by him that there was no incumbrance on the property, and that 'the title was good. How could he have ascertained that the plaintiff had the bond and mortgage ? It seems to me that he was not bound to inquire further. As a purchaser of the land from Minot Mitchell he had, I think, the right to assume that the mortgage-was merged in the legal title, and satisfied. Burchas*399ing for a good consideration and putting his deed first on record, he has the right of a purchaser in good faith, and is protected by the registry act from the lien of the plaintiff's unrecorded assignment of said mortgage. If this be not so, it seems to me it must be upon the ground that the original record of the mortgage remains notice to all the world of its existence and validity, till paid, and that the assignment of a mortgage need not in any case be recorded, under the statute.
[Monroe General Term,
September 3, 1866.
But the statute requiring all assignments of real estate to be recorded, (1 R. S. 756, §§ 1, 38,) certainly applies to assignments of mortgages. It was so intended by the revisers, who say in their notes, (3 R. S. 2d ed. p. 607,) “Assignments of mortgages will be included in the term conveyances,'' and Chancellor Walworth, in Vanderkemp v. Shelton, (11 Paige, 28,) so held. And see also Fort v. Burch, (5 Denio, 187.) To give the registry act, so far as relates to the assignment of mortgages, any effect, it must be held that subsequent grantees or mortgagees of the land for a valuable consideration without any actual notice of the unrecorded assignment, are to be regarded as purchasers in good faith, under said act. They must know of the existence of the original mortgage, but if such mortgage does not appear by the record to have been assigned, they may assume that it is still held by the mortgagee, and may contract with him upon that assumption; and if they do so, as the defendant Huntington did in this case, in entire ignorance of the unrecorded assignment and in perfect good faith as matter of fact, the title so acquired, I think, should prevail over such assignment. If this view is concurred in by my breth-r ren, it follows that the judgment below should be reversed, and a new trial granted, with costs to abide the event.
Judgment reversed.
WeUes, E, JDanvin Smith and Johnson, Justices.]