Court Opinion

ID: 7962049
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:46:43.240723+00
Date Added: 2024-06-11T16:34:31.130080
License: Public Domain

The Chancellor.
The rights of the parties are the same now, as before the agreement was entered into between McDowell and Lawrence, to cancel the Tuthill mortgage, and give one running directly to Lawrence, in its place. All parties had notice of the $3,000 mortgage to Simmons, before the change was made ; and what has taken place since cannot affect his rights.
It is said McDowell might have sold, or mortgaged, his contract, but that he had no interest in the land itself, to mortgage, the title being in Lawrence. At law, a contract for the purchase of land gives the vendee no interest in the land; but the rule is otherwise in equity, which considers the vendor, as to the land, a trustee for the purchaser, and the vendee, as to the money, a trustee for the seller. In equity, the land belongs to the vendee, and may be sold, devised, or encumbered by him, and, on his death, will, descend to his heirs. Seton v. Slade, 7 Ves. R. 265, 274; 6 Ves. R. 353. Champion v. Brown, 6 J. C. R. 398. It must be taken, however, subject to the rights of the vendor under the contract. And, McDowell having an equitable interest in the land under the contract, the mortgage from him to Simmons was an equitable mortgage of that equitable interest.
This mortgage was recorded on the day it was executed, and it is insisted that the registry of it was notice, to *182both Tuthill and Lawrence, in their subsequent dealings with McDowell, and with each other. The registry of a deed or conveyance required by law to be recorded, when properly registered, is notice to subsequent purchasers of the existence and contents of such deed or conveyance, in equity, as well as at law. If an instrument should be registered, which the law does not require to be registered, the record of it would be notice to no one; for, no person is expected, much less bound, to examine the registry for that which has no business to be there. Our registry law, it seems to me, has reference to conveyances of the legal estate, or interest in law, only, except where a trust is created, or declared, in writing, which, to be notice to subsequent purchasers, the statute requires to be recorded. The language of the statute is: “No bargain and sale, or other like conveyance of any estate in fee simple, or for life, and no lease for more than seven years from the making thereof, shall be valid and effectual against any other person than the grantor, and his heirs and devisees, and persons having actual notice thereof, unless it is made by a deed recorded as provided in this chapter.” R. S. 260. In Parkist v. Alexander, 1 J. C. R. 397, Chancellor Kent thought the better opinion was, that the registry of an equitable mortgage was notice to a subsequent purchaser of the legal estate. His opinion in that case, however, was based on the peculiar phraseology of the registry act itself. He says: “ The statute I have cited speaks of any ‘ writing in the nature of a mortgage,’ and these words may-reach to any agreement creating an equitable encumbrance.” The language of our statute is not so broad, and the case of Parkist v. Alexander, consequently, is no authority that the registry of a mere equitable mortgage, like the one to Simmons, is, under our statute, notice to subsequent purchasers. (1)
*183The mortgage to Tuthill stood on the same footing with that to Simmons, with this difference, that Simmons’s mortgage was prior in time. They were both liens on McDowell’s equitable interest in the land, and neither of them was an assignment of the bond for a deed by way of mortgage. Neither Simmons nor Tuthill acquired any legal interest in the bond; neither could have sued Lawrence for a breach of its condition; their interest was purely equitable, not legal, and their remedy against Lawrence, as well as McDowell, such as could be had in a court of equity only. What then were the relative rights of Simmons and Tuthill, under their respectiv^¡a^gH§B^ai The rule in equity on this point is well>^p^33(M4^jDfeancellor Walworth, in Grimstone v. Carter, 3 Paige R. 436. He says: “It is the settled doctrinal J^j\We when the equities of the parties are Ipqual, and neitheikhas the legal title, the one who has theVrííí Sj§i^%A's^prevail. Nor will the Court permit the par^^Bssmgrfi^ubsequent equity to protect himself by obtaining a conveyance of the legal title, after he has either actual or constructive notice of the prior equity.” As between these two mortgages, then, Simmons’s mortgage, being prior in time, was prior in right; and this priority was not destroyed, or lost, by the assignment of the Tuthill mortgage to Lawrence without notice of the prior mortgage. Tuthill had no notice of the mortgage to Simmons, when he took his mortgage ; and an assignment of it to a third person, without notice, could not give the assignee a better right than Tut-hill himself had. Lawrence acquired the right of Tuthill, and nothing more. There was not a union of the legal estate and a subsequent equity in the same right, for Lawrence held the legal title in trust for McDowell; and, before the agreement was consummated to cancel the Tut-hill mortgage and give another in its place, when he ac*184quired the legal estate in his own right, both he and Wing had notice of the Simmons mortgage. The English doctrine of tacking, which, perhaps, would be applicable to such a case, has not been adopted in this country. 1 Caines Ca. 112; 3 Pick. R. 50; 1 Hopk. R. 234; 4 Kent Com. 178, 179.
The premises included in Simmons’s mortgage must be sold separately, and, out of the proceeds thereof, the $250 note given by McDowell to Lawrence for the purchase money, must first be paid, (the other note having been paid,) and then Simmons’s mortgage for $3,000; and, with the balance, if any, and the proceeds of the residue of the mortgaged premises, the Lawrence mortgage must then be paid, and then Simmons’s second mortgage.^

 The registry of a similar mortgage was held not to be notice to subsequent purchasers from the mortgagor, after he had acquired the legal title, in the case of The Farmers Loan and Trust Co. v. Maltby, 8 Paige R. 361.