Court Opinion

ID: 7047090
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:56:15.375914+00
Date Added: 2024-06-11T16:11:34.710349
License: Public Domain

Dissenting Opinion.
Zollars, J.
It will be seen by an examination of the principal opinion, and the dissenting opinion by Mr. Justice jSJiblack, that the point of difference is as to the priority of liens between the bona fide assignees and holders of notes secured by a prior mortgage, and a subsequent mortgagee in good faith, and for value, the prior mortgage having been cancelled and released by the mortgagee named therein, after he had parted with the notes, and before the execution of the second mortgage. To a number of the propositions of law stated in the principal opinion I yield ready assent. ' From the conclusion reached, and the principal reason upon which it is based, I am constrained to dissent.
I concur in the conclusion reached in the dissenting opinion, but do not think it is put upon sufficiently comprehensive ground. The whole controversy, I think, hinges upon the question, whether, at the time the mortgages were executed in 1873 and 1875, there was any law in this State for the recording of assignments of mortgages, and upon the force and effect to be given to the statute in relation to the cancellation of the mortgages upon the records.
In the absence of registry laws, the maxim “ Qui prior est tempore, prior est jure,” applies both to legal estates and equitable rights. The sole purpose of registry laws is to protect subsequent purchasers against prior and unrecorded conveyances. In the absence of such laws prior grantees and mortgagees are superior in right, as they are in time, and *544will be protected as against subsequent deeds and mortgages. It is by reason of these laws only that subsequent grantees and mortgagees may acquire superior rights to prior grantees and mortgagees, who have not recorded their conveyances within the time fixed by such laws. Broom’s Legal Maxims, 353, et seq.; 2 Washb. R. Prop. 148; Jones Mort., sections 572, 576, 607; Wade Notice, sections 96, 162, 196; Ely v. Scofield, 35 Barb. 330; Berry v. Mutual L. Ins. Co., 2 Johns. Ch. 603; Pomeroy Eq., section 413; James v. Morey, 2 Cowen, 246.
It is well settled that the assignment of the notes carries the' mortgage as an incident, and that a mortgagee and his assignee are regarded as purchasers under the registry laws. Bowling v. Cook, 39 Iowa, 200. It is well settled, too, that after a mortgagee has parted with the notes secured, by a mortgage, he has no power to extinguish the mortgage by a release upon the records or otherwise. Such a release does not affect the mortgage as to the assignee or mortgagor. It has no effect other than to postpone the lien as to subsequent encumbrancers in good faith and for value. And it will not have this effect unless the assignee has been guilty of negligence in not taking and recording an assignment of the mortgage under the registry laws, or has been guilty of some wrong or laches whereby the subsequent encumbrancer has been induced to rely upon the release of record, or unless he may rely upon such release in any event. It must be manifest that a party can not sell and convey title to property which he has once sold and conveyed, aud that he can not extinguish a mortgage which has passed from him by assignment, and in which he has no longer any interest.
In all cases where the subsequent grantee or encumbrancer acquires the superior right, it is not because the grantor has the power to convey two titles to the same property, but because the first grantee is precluded by some kind of estoppel, or act of negligence, under the registry laws or otherwise. In the statutes of many of the States, a prior conveyance is *545declared to be void, as against a subsequent bona fide purchaser, unless recorded within the fixed time.
Where rights of innocent third parties have not intervened, a release of a mortgage without authority, or procured by fraud, will be set aside in favor of the assignee. It will not be, however, as against bona fide subsequent grantees or encumbrancers, where the assignee has been guilty of negligence or wrongs that ought to estop him. The authorities cited in the principal and.dissenting opinions are not in conflict, but in harmony with this statement. In the case of McCormick v. Digby, 8 Blackf. 99, no rights of third parties were involved.
The section cited from Thomas on Mortgages is simply that if a mortgage is thus released after assignment, the release will be valid as to subsequent purchaser’s in good faith, but will. have no effect as to others. The author refers to the case of Ely v. Scofield, supra, where it was held that such a release did not affect the validity of the mortgage, but simply took away its priority over the deed of a subsequent purchaser in good faith. The statement in Jones on Mortgages, section 814, that a satisfaction entered by the mortgagee after the assignment of the note may be set aside, is upon the assumption, as therein stated, that there is no statute requiring the assignments of mortgages to be recorded. The cases cited in support of the text are all cases in which no rights of third parties, as subsequent grantees or encumbrancers, were involved. Such were the cases of Gordon v. Mulhare, 13 Wis. 22. The case of Sample v. Rowe, 24 Ind. 208, cited, so far as it bears upon the question, supports the proposition as I have stated it.
In the case of Lapping v. Duffy, 47 Ind. 51, the subsequent mortgagees were not innocent mortgagees, for the reason that there was an unsatisfied judgment of foreclosure, which was notice to them. There is no hazard in asserting that the doctrine as I have stated it is the well settled doctrine, and that the cases in which such releases have been set aside have been *546cases between the immediate parties, and not involving innocent third parties. Occasionally a statement will be found in text-books that such a release will be set aside as against subsequent purchasers; but upon an examination of the casescited in support of the text, it will be found that the subsequent purchasers were not subsequent to the release, but only subsequent to the mortgage thus satisfied. The difference is very apparent, and very important. Such are the cases of Harrison v. Johnson, 3 C. E. Green (N. J. Eq.) 420; Jones Mort., section 967; Robinson v. Sampson, 23 Maine, 388.
It will be found upon an examination of the cases cited in both the principal and dissenting opinions, that the subsequent encumbrancers were protected because of provisions-of the registry laws, or because of the negligence of the assignee in not taking and recording an assignment of the mortgage under the registry laws. In the case of Bank of State of Indiana v. Anderson, 14 Iowa, 544, the question arose between the assignee of notes secured by a mortgage and a subsequent mortgagee, the first mortgage having been can-celled of record by the first mortgagee after he had assigned the notes, and before the execution of the second mortgage. The second mortgagee examined and relied upon the recoi’ds. It was held that, having done this, he was not chargeable with negligence; that under the laws of Iowa an assignment of a mortgage may be recorded; that the assignee of the notes might have protected himself and the second mortgagee, against the fraud of the first mortgagee, by taking an assignment of the mortgage and putting it on record, and that, not having taken that precaution, he was guilty of such negligence as would subordinate his lien to the lien of the subsequent mortgage. This case was not doubted, but cited in the cases of McClure v. Burris, 16 Iowa, 591, Walker v. Schreiber, 47 Iowa, 529, and other cases in that State. The case of Ogle v. Turpin, 102 Ill. 148, is similar in facts with the Iowa case, and a like ruling was made. After holding that the law of Illinois authorizes the recording of assign*547ments of mortgages, the court, per Mr. Justice Dickey, said: “ When a man buys notes secured by mortgage he becomes thereby the equitable assignee of the mortgage, and acquires an equitable interest in the mortgaged lands. If he wishes to protect that interest against subsequent purchasers, he may-do so by taking a written assignment of the mortgage, and placing that assignment upon record.” The case of Lewis v. Kirk, 28 Kan. 497, in its facts, is similar to the Iowa and Illinois cases, and the one at bar. The decision is under a. statute, held to authorize the recording of assignments, and the subsequent purchaser was protected. Section 472, Jones Mort., cited, is in harmony with these cases. It is as follows: “472. The registration laws and the doctrines of priority by record generally extend to assignments of mortgages as well. The assignment is invalid against subsequent purchasers without notice unless it is recorded. Consequently if a mortgagee transfers the note secured by the mortgage, or makes a formal assignment of the mortgage which is not recorded, and afterwards enters a satisfaction of the mortgage upon the record, * * the mortgage ceases to be a lien, as against one who purchases the property in good faith and without notice,” etc., and so of section 820, Jones Mort., also cited. In that section it is said: “Such subsequent purchaser or mortgagee is not bound to take notice of an assignment by transfer of the notes alone. The assignee of the notes can easily protect himself by requiring an assignment of the mortgage and recording it, and thus give notice of his rights; and if he omits to do this, he should be the party to suffer for the negligence,” etc. This section is based upon the Iowa cases.. And so the statement in Thomas Mort., p. 142, is based upon New York cases, which hold that assignments of mortgages ' may be recorded, and charge negligence upon the assignee who neglects to take an assignment of the mortgage, and put it upon record. See the same work, pp. 118, 150,154,159.
In accord with this doctrine is the late case of Williams v. Jackson, decided by the Supreme Court of the United States, as *548we find it reported in The Central Law Journal, vol. 17, p. 148: A. sold land to B., and for the purchase-money took four notes, executed by B. These notes were secured by a trust deed, executed by B. and wife to C., who, upon full payment, was to release and convey the land to D., the wife of B. This trust deed was recorded in January, 1875. These notes were endorsed to Jacksons. After this, on the 15th day of September, 1878, and without the knowledge of Jacksons, the trustee and A. executed a deed of release to D., the wife of B., reciting therein that the debt had been paid. B. and wife about this time were seeking to make a loan upon the land. The appellant agreed to loan the money if satisfied by a conveyancer’s abstract that the land was free of all encumbrance, but not otherwise. The release being put upon record, and the appellant being thereby satisfied as to the title, he advanced $5,000, received a note executed by B., secured by a trust deed by B. and wife. Jackson filed his bill to have the release and subsequent conveyances declared void as against the first trust deed, and the trust created by that deed be declared to have priority over all subsequent encumbrances. After reciting the statute of the District of Columbia, which provides that any title bond or other written contract in relation .to land may be acknowledged and recorded in the same manner as deeds of conveyance, the court, per Mr. Justice Gray, said, that the assignee of the notes, having taken no precaution to obtain, and put on record, an assignment of his rights in such form as would be notice to all the world, was bound by the release, as against any one acting upon the faith of the record, and ignorant of the real state of facts; and, further, as follows: “ If the plaintiffs wished to affect subsequent purchasers with notice of their rigjhts, they should have obtained a new conveyance or agreement, duly acknowledged and recorded, in the form either of a deed from the original grantors, or of a declaration of trust from the trustees, or of an assignment from Augustus Davis (A.) of his equitable interest in the land as security for the payment of *549the notes. The record not showing that any person other than Augustus Davis (A.) had any interest in the notes or in the' land as the security for their payment,an innocent subsequent purchaser or encumbrancer had the right to assume that the trustees, in executing the release, had acted in accordance with their duty. * * * It was suggested in argument that as the first deed of trust showéd that the notes secured thereby were negotiable and were not yet payable, and that the land was not intended to be released from this trust until all the notes were paid, Williams” (appellant) “was negligent in not making further inquiry into the fact whether they were still unpaid. But of whom should he have made inquiry ? The trustees under the first deed, and the original holder of the notes secured thereby having expressly asserted under their own hands and seals that the notes had been paid, and Sweet (B.) and wife having apparently concurred in the assertion by accepting the deed of release and putting it on record, he certainly was not bound to inquire of any of them as to the truth of that fact; and there was no other person to whom he could apply for information, for he did not know that the notes had ever been negotiated, and he had no reason to suppose that they had not been cancelled and destroyed. To charge Williams with constructive notice of the fact that * the notes had not been paid, in the absence of any proof or knowledge, fraud or gross or wilful negligence on his part,, would be inconsistent with the purpose of the registry laws, with the settled principles of equity,.and with the convenient transaction of business.”
As supporting the same doctrine, and upon substantially the same grounds, see Clark v. Jenkins, 5 Pick. 280; Henderson v. Pilgrim, 22 Texas, 464. The case of Summers v. Kilgus, 14 Bush, (Ky.) 449, was decided in favor of the subsequent purchaser, upon the two grounds, viz., that the statute provides for a release of a mortgage lien by the person entitled to the same, and for a register of assigned notes.
The case of James v. Morey, supra, cited and quoted from *550in the principal opinion, was decided upon the ground that 'at the time the rights of the parties became fixed there was' no law requiring or authorizing' the recording of an assignment of a mortgage. It differs with the case in hearing in that there was no cancellation of record or otherwise. The subsequent purchaser bought with the mortgage on record unsatisfied. It was held that the assignee was not guilty of any wrong or negligence in not giving notice, because no way was provided by which he could give such notice, and that as the mortgage was of record unsatisfied, it was enough to put the purchaser upon inquiry, and that he was guilty-of negligence in not making such inquiry and ascertaining whether or not it was a subsisting lien.
It is an enunciation of the doctrine that where loss must fall upon one of two parties by the wrong of a third, he shall be protected who is guilty of the least negligence. If in the present case there was no law for the recording of the assignment of the mortgage, and the subsequent mortgagee was not justified in relying upon the cancellation on the records, no fault or negligence can be charged upon the assignees of the notes; neither can -any wrong or negligence be charged upon the subsequent mortgagee, unless he was guilty of negligence in relying upon the records showing a release of the mortgage. If neither party was guilty of negligence, the rights of the assignees of the notes, being prior in time and equal in equities,, must be protected. This brings us to the statutes of this State and the decisions thereunder. The principal opinion is based' upon the theory that prior to 1877 these statutes contained no provisions for the recording of assignments of mortgages, nor any other provision which protected the innocent subsequent mortgagee in a case like the present. Much importance is given to the case of Lapping v. Duffy, supra, and its citation, in the cases of Marshall v. Stewart, 65 Ind. 243, Teal v. Hinchman, 69 Ind. 379, Evansville, etc., Co. v. State, ex rel., 73 Ind. 219, and Hunt v. Elliott, 80 Ind. 245.
I have already referred to the case of Lapping v. Duffy, *551supra. That case was as follows: A. executed notes to B., and a mortgage to secure them. B. assigned the notes to C., who foreclosed the mortgage. C. assigned the judgment to D. Quite a while after this, and while the judgment was in full force, B., without any interest in the mortgage, and without authority, made an entry of satisfaction on the record of the mortgage. After this, A. executed mortgages on the same real estate to E. and others. The contest was between D., the owner of the judgment of foreclosure, and the junior mortgagees. It was held that B. had no authority to cancel the mortgage; that the mortgage was not so merged in the foreclosure as to destroy its lien, and that the lien in favor of the owner of the foreclosure judgment was, therefore, prior to the subsequent mortgages. It is not stated in the opinion whether this priority was because there was no law for the recording of assignments of mortgages, or because the record of the foreclosure was notice to the subsequent mortgagees. That this record was constructive notice to the subsequent mortgagees I think there can be no doubt. Upon this theory no fault can be found with the decision. The citation of the case, in Marshall v. Stewart, supra, was in support of the single proposition that a promissory note is merged in the judgment upon it. In the case of Teal v. Hinchman, 69 Ind. 379, the contest was as to the priority of an unpaid mortgage, which had been foreclosed, over subsequent mortgages. The Lapping case was cited only in support of the proposition that the mortgage was no^ merged in the- judgment of foreclosure, in such sense as to defeat the lien of the mortgage.
It was also cited in the cases of Evansville, etc., Co. v. State, ex rel., supra, and Hunt v. Elliott, supra, in support of the single proposition, that a mortgage is not thus merged in a judgment of foreclosure. Neither the Lapping case nor any of the cases, supra, in which it is cited, is an adjudication upon the question as to whether or not, prior to 1877, there was any law in the State for the recording of assignments of mortgages, nor does it or any of those cases settle *552what the rights of the parties might have been, had there been no record of a foreclosure. It is said in the principal opinion that these cases, together with the case of Hasselman v. McKernan, 50 Ind. 441, and its citation in the subsequent cases of Coombs v. Carr, 55 Ind. 303, Dixon v. Hunter, 57 Ind. 278, Cain v. Hanna, 63 Ind. 408, and Hosford v. Johnson, 74 Ind. 479, and the support given it in the case of Etzler v. Evans, 61 Ind. 56, constitute “an unruffled line of decisions” in support of the doctrine held in the principal opinion. Let us see if that is so. As already seen, the case of Lapping v. Duffy, supra, and the cases in which it is cited,have but a very remote bearing, if any bearing at, all, upon the questions at issue in the case before us.
In the case of Hasselman v. McKernan, supra, the contest was whether the assignee of a junior mortgage and notes secured thereby could redeem from a sale under a prior mortgage, in the suit to foreclose which he had not been made a party. It was held that as junior mortgagee he could. It is said in the opinion that in the action to foreclose the prior mortgage, the holder of it might have put an interrogatory to the assignor of the junior mortgage, and thus have learned whether or not he had assigned it, and if so, to whom. And that thus the assignee might have been made a party and concluded by the decree. In speaking of the assignee of the junior mortgage, and his right to redeem, it was said : “ We have no statute providing for the recording of assignments of mortgages, and making such record notice; hence the plaintiffs” (assignees of the junior mortgage) “were guilty of no laches.” This is the whole of the decision in relation to the question as to whether or not, under the statutes, assignments of mortgages might be recorded, so as to give notice. It is apparent, I think, from the brief manner in which the question was disposed of, that the learned judge who wrote the opinion did not regard it as vital to a decision of the case, and hence did not give it a very thorough examination. Our registry laws are in no way referred to except by the general statement. It had *553been decided many times previous to this that a junior mortgagee, not made a party to a suit to foreclose a senior mortgage, might redeem therefrom. Proctor v. Baker, 15 Ind. 178; Murdock v. Ford, 17 Ind. 52. I do not take the time to cite the other cases.
Hasselman v. McKernan is cited in the cases of Coombs v. Carr, supra, Cain v. Hanna, supra, and Hosford v. Johnson, supra, in support of the single proposition that junior encumbrancers have the right to redeem from a sale on a prior mortgage. Neither of these cases decides anything in relation to the law for the recording of assignments, nor do they decide anything bearing upon the case at bar. In the case of Dixon v. Hunter, supra, which involved the right of a junior mortgagee to redeem from a sale under a prior mortgage, the Hasselman case was cited with approval, although the decision was based, in the main, upon the case of Lapping v. Duffy, supra, already examined. Here, again, there is no reference to our registry laws except the general statement.
The case of Etzler v. Evans, 61 Ind. 56, cited as in harmony with the above cases, and as supporting the doctrine of the principal opinion, decides nothing akin to any question involved in the case in hearing, except that the recording of an instrument not authorized by law to be recorded is notice to no one. This proposition I do not controvert, nor is it controverted in the opinion by Mr. Justice Niblack. That, however, is decisive of nothing here.
Thus we have one adjudication only once cited and approved, that prior to the act of 1877, section 1093, R. S. 1881, there was no law in this State for the recording of assignments of mortgages. This is the whole of what in the principal opinion is called a line of decisions.
On the other hand, in the case of Fox v. Wray, 56 Ind. 423, it seems to have been taken for granted that, as against the assignee of notes secured by mortgage, a purchaser in good faith, after a release of record had been made by the mortgagee, would be protected. In the case of Ayers v. Hays, *55460 Ind. 452, the question came squarely before the court for the first time as the controlling question in the case, and it was held that the subsequent encumbrancer should be protected.
Without referring to or citing it, the doctrine of this case was distinctly asserted in the case of Burton v. Reagan, 75 Ind. 77. In that case the mortgage had been released upon the records by the mortgagee after he had assigned the notes. The question was whether subsequent purchasers in good faith should be protected. The court said (p. 81) : “But, if the Reagans were innocent purchasers of the land, they took it discharged of the mortgage lien of Hadley.” Hadley was the assignee of the notes secured by the mortgage.
The majority opinion treats the case of Hasselman v. McKernan, supra, and the case following it, as in irreconcilable conflict with the case of Ayers v. Hays, supra, and the cases following it, and hence overrules the latter cases. In regard to the case of Ayers v. Hays, supra, it said in the principal opinion: “Ayers v. Hays, 60 Ind. 452, does decide this question, and against the view here declared; but it is evident that in that case the court proceeded on the theory that assignments were entitled to record. We quote from the opinion the following: ‘In the case at bar, there was nothing on record, when Hays and Butcher purchased the mortgaged property, indicating that Campbell had parted with the note in suit, or that it remained unpaid, or that Campbell was not fully authorized to enter satisfaction of the mortgage, or had made any mistake in such entry of satisfaction/ ” It is further said in the principal opinion: “As between Ayers v. Hays, supra, and Dixon v. Hunter, supra, there is irreconcilable conflict, and we must choose one or the other of them.”
Why is the case of Ayers v. Hays, supra, and the cases supporting it, in irreconcilable conflict with the cases of Hasselman v. McKernan, supra, and Dixon v. Hunter, supra? Because, as stated in the pi’incipal opinion, the Hasselman and Dixon cases are, in a measure, based upon the idea that prior *555to the act of 1877 there was no law in this State for the re-' cording of assignments of mortgages; 'while the Ayers case is based upon the idea that there was such law. What is the result of this irreconcilable conflict? I understand the rule to be well settled that where two cases, by the same court, are in irreconcilable conflict upon a proposition of law, the later decision controls, and overthrows and overrules the former. If that be so, then the Hasselman and Dixon cases, reported in 50th and 57th Ind., have been overthrown and overruled by the Ayers case, reported in 60th Ind.
The question then is, shall we now overthrow the Ayers case, and go back to the overruled Hasselman case, and the Dixon case based upon it, especially when we are informed in the principal opinion that some of the members of the court concurring in that opinion regret the decision in the Hassel-man case? The act of 1877, for the recording of assignments of mortgages, can not properly be said to be a concurrence by the Legislature in the Hasselman case, decided in 1875. It was simply a yielding to the authority of the court in the Hasselman case, and at the first opportunity passing an act to supply a deficiency declared in that case by the court to exist. And suppose we now overthrow the Ayers case, and return to the Hasselman and Dixon cases, what then?
Under the reasoning in the principal opinion, as I understand it, the decision in the Ayers ease would be good law if made under the act of 1877. Under the authorities, there can be no doubt about this. - It will follow, therefore, that in all cases like the one in hearing, arising subsequent to that act, we shall have to reassert the doctrine of the Ayers case. To concede this is to concede what will overthrow the argument in the principal opinion, that the commercial quality of mortgage notes is, in some measure, a controlling consideration in the decision of this case. If that were a controlling consideration, it would not be taken away by the act of 1877. That act does not provide for the recording of assignments of such notes. It provides for the recording of assignments *556of mortgages. The fact is, these are not the notes of the commercial world. In the whirl and rush of business transactions, business men and banks do not stop to investigate titles to real estate to see if the mortgage note is well secured,, but rely upon personal security. Such notes are taken in the commercial world, in the main, from failing debtors only.. The act of 1877 was not intended to, nor does it in any way,, affect the commercial quality of mortgage notes. Suppose a case just like this should arise under that act; the notes are assigned in writing, but the mortgage is not. The assignee of the notes can not record the assignment, because the law makes no provision for such record. Will the commercial quality of the notes protect the holder as against an innocent mortgagee, subsequent to a cancellation of the first mortgage, by the mortgagee therein named? If not, why not? Because registry laws are intended to furnish a ready and reliable means of knowledge to subsequent purchasers. That knowledge may be relied upon with security. That security is the object of the registry laws of whatever nature. The assignee of mortgage notes must use every means furnished by the law, to give notice to subsequent purchasers. Hence, if he may record an assignment of the mortgage, he is bound to procure such assignment and put it on record. If he contents himself with an assignment of the notes only, his rights will be subordinated to the lien of a subsequent mortgagee, acting upon the faith of the records.
For the sake of consistency, uniformity in our decisions,, and because I believe that the Ayers case was correctly decided, I am opposed to the overruling of it. And because I believe that the Hasselman and Dixon cases were not correctly decided, so far as they affect any question involved in the case in hearing, I am opposed to reinstating them, or reaffirming the doctrine of them.
A proper estimate of the above cases, and a proper decision of the question before us, necessarily involve a proper-construction of our registry laws. At the time the mortgage *557was released, there was in force the following statute, with others, viz.: “ Every mortgagee of lands whose mortgage has been recorded, having received full payment of the sum or sums of money therein specified, * * * shall * * * enter satisfaction on the margin or other proper place in the record of such mortgage, which shall operate as a complete release and-discharge thereof.” 2 E. S. 1876, p. 334, section 5.
It has been held by the Supreme Courts of Kentucky and Ohio, that subsequent purchasers and encumbrancers may rely upon such cancellation of record, and will be protected as against the assignees of the notes secured by the mortgage, without reference to laws for the recording of assignment of mortgages.
In the case of Swartz v. Leist, 13 Ohio St. 419, the mortgagee, after he had assigned the notes, and before they were all due, cancelled the mortgage on the records. After this, a party relying upon the record, purchased the real estate covered by the mortgage. The statute of Ohio, in relation to the cancellation of mortgages, is substantially the same as ours. Mr. Justice Scott, in delivering the opinion of the court, said: “But the parties here are not equally faultless, and do not stand in ccquali jure. Swartz negligently or confidingly permitted Little, the mortgagee, to retain the legal title conveyed by the mortgage, and the power of control over it. Little had thus the legal power, and, ostensibly, a-perfect right to discharge and release it. Leist, the purchaser, having no reason to suspect fraud, was justified in regarding the release legally made, by one who was ostensibly the proper party, as an effectual discharge of the lien. And as between these parties, he who unwisely reposed confidence in Little, and gave him the power to defraud, should suffer the consequences. * * It is claimed that the release entered on the record, in this case, was inoperative, under this statute, because the note held by Swartz had not matured at the time, and was therefore not ‘due.’ within the meaning of the statute; and for the further reason, that ‘payment of the money ’ was not, in fact, *558‘ received.’ This statute was intended to facilitate the discharge of mortgage liens. It is remedial in its character, and should be liberally construed. * * * And as to the want of actual payment — so far as respects the lien of the mortgage, the mortgagee is clearly estopped by his recorded release, from denying, as against subsequent purchasers in good faith, the payment thus evidenced by his own act. And this estoppel must be equally effective against the holder of a latent equity, arising from contract with the mortgagee.”
The Kentucky statute provides that “ Liens, by deed or moi’tgage, may be discharged by an entry acknowledging satisfaction of the same on the margin of the record thereof, signed by the person entitled to the same, * * * and attested by the clerk, * * * which, iñ case of a mortgage, * * * shall have the effect to reinvest the title in the mortgagor,” etc. The Supreme Court held that the purchaser, relying upon a cancellation made by the mortgagee, under this statute, should be protectéd as against the holder of the notes by assignment, and said: “ This provision indicates that it was the intention of the Legislature that a release, made in conformity to the statute by the proper person, should have the same effect as a deed of release, and that it should furnish an abiding evidence of the extinguishment of the lien; and we are of the opinion that, fraud aside, it is conclusive when invoked by a subsequent vendee for his protection against liens which it purports to release.” Summers v. Kilgus, 14 Bush, (Ky.) 449. See, also, to somewhat the same effect, Ely v. Scofield, 35 Barb. 330.
These cases support the reasoning of Mr. Justice Niblack,, in his dissenting opinion, and in my judgment they state a reasonable rule. As between the immediate parties to a conveyance or mortgage, the registry laws neither add to nor detract from the instrument. The sole purpose of such laws is to facilitate transactions in real property by affording an easy and sáfe means of ascertaining the condition of titles, and at the same time protect subsequent purchasers. As a *559part of the system, and for the same purpose, we have the statute for the cancellation of mortgages on the records. It will hardly do to charge the subsequent purchaser with negligence because he relies upon the records thus provided for by law. If he finds the mortgage cancelled on the records, by the party declared by law to be the proper party to make-such cancellation, what more can be reasonably required of him? Must he in every case be required to demand a production of the notes secured by the mortgage ? As is very frequently the case, they may have been destroyed by the mortgagor after they were paid, and their production thus rendered impossible. In such case, must the mortgagor be crippled in the conveyance of his real estate, because he can not produce such notes?
Suppose, on the other hand, that the notes have been transferred, and they are not paid, but by collusion between the mortgagor and the mortgagee the latter has. entered a satisfaction of the mortgage on the records in the manner provided by law, of whom, in such case, must the subsequent purchaser make inquiry? He can not go to the assignee of the notes, because he has no .means of knowing who he is — he has no means of knowing that the notes have been assigned.. If he goes to the mortgagor and mortgagee, they will falsify in relation to the notes as they have falsified upon the records. If the release upon the records may not be relied upon, what is the purpose of such release? If the mortgage has been discharged by payment, it is no longer of any force, whether cancelled upon the records or not. Why, then, such cancellation ? Simply to furnish reliable information to subsequent purchasers. I, however, go further, and maintain that the statutes provided for the recording of assignments of mortgages, and that the assignees of the notes were thus provided with a means of protecting themselves and the subsequent mortgagees by taking an assignment of the mortgage and putting it on record, and that, not having done so,they were guilty* *560of negligence, on account of which their liens should be postponed to that of the subsequent mortgage.
We find the following in the statutes as they existed when the release and mortgage in controversy were made:
Section 16, 1 R. S. 1876, p. 365 : “ Every conveyance or mortgage of land, or of any interest therein, * * * shall be recorded,” etc.
.Section 18, 1 R. S. 1876, p. 365: “To entitle any conveyance, mortgage or instrument of writing to be recorded, it shall be acknowledged by the grantor,” etc.
Section 19, 1 R. S. 1876, p. 366: “When any conveyance, mortgage, or other instrument required to be recorded, is acknowledged,” etc.
Section 33, 1 R. S. 1876, p. 368: “The term ‘grantor,’ as used in this act, shall be construed to embrace every person by whom any estate or interest in lands is created, granted, bargained, sold, conveyed, transferred, or assigned.”
Section 34,1 R. S. 1876, p. 368: “All instruments of writing of and concerning lands, or concerning any interest therein, * * shall be deemed a conveyance within the provisions of this act,” etc.
Section 7, 2 R. S. 1876, p. 335: “ The recording of the assignment of a mortgage shall not be deemed, of itself, notice to a mortgagor, his heirs or personal representatives, so as to invalidate any paymént made by them to the mortgagee, or any assignee, before actual notice of such assignment.”
If these statutes did not authorize the recording of assign•ments of mortgages, then the last section above set out is utterly. meaningless. These sections, and especially the last, were evidently copied from the statutes of New York, where they had been interpreted and held to authorize and require the recording of assignments of mortgages. So our Legislature doubtless understood them when they were enacted. If not, what was the purpose of this seventh section ? Is it to have no meaning? Is the Legislature to be convicted of having done a foolish and useless thing? Is there no case to which this section can be applied ? If there is this is the case.
*561This section assumes that such assignments may be recorded, and that when so recorded, the record shall be constructive notice to all parties interested, except those specially named. In my judgment, this section of itself was sufficient authority for the recording of the assignment. It was doubtless, too, the legislative understanding that the other sections of the statute provided for the recording of such assignments when properly acknowledged. The terms are comprehensive. Every conveyance when acknowledged by the grantor shall be recorded. Sections 16, 18 and 19, supra.
The term grantor shall be construed to embrace every person by whom any estate or interest in land is created, transferred or assigned. Section 33, supra.
All instruments in writing of and concerning any interest in land shall be deemed a conveyance within the provisions of the act. Section 34, supra.
Can there be any doubt about these terms being sufficiently comprehensive to embrace the assignments of mortgages ? Is not a mortgage an instrument in writing of and concerning an interest in land, under this statute ? Is not the assignment of a mortgage a transfer and assignment of an interest in the land under this statute? Does not the term grantor embrace the assignor of a mortgage under this statute ? If not, what do these terms mean as used in the statute ? They can not refer to a deed, because a deed can not be assigned. A mortgage does not convey the legal title, but it conveys a greater interest in the land than any other instrument except a deed. Under the above statute, a mortgage is clearly a conveyance of an interest in the land mortgaged.
The 18th section of the statute of descents, 1 R. S. 1876, p. 411, provides that a second wife, in the case named, may not alienate real estate held in virtue of a previous marriage. In construing this statute, this court, in the case of Vinnedge v. Shaffer, 35 Ind. 341, said: “Á mortgage is in some sense an alienation and fairly within the prohibition of the st-at*562ute.” This case was cited and fully approved in the similar case of Bowers v. Van Winkle, 41 Ind. 432. It has been many times cited with approbation; I cite some of the cases: Scott v. Greathouse, 71 Ind. 581; Connecticut Mutual Life Ins. Co. v. Athon, 78 Ind. 10; Schlemmer v. Rossler, 59 Ind. 326; Unfried v. Heberer, 63 Ind. 67; Edmondson v. Corn, 62 Ind. 17; Miller v. Noble, 86 Ind. 527
And so, in the case before us, a mortgage is a conveyance of an interest in the land covered by it.
The registry laws of Kansas beariug upon the question here involved, as we find them set out in the case of Lewis v. Kirk, 28 Kan. 497 (42 Am. R. 173), are as follows: “ Every instrument in writing that conveys any real estate, or whereby any real estate may be affected, * * * may be recorded in the office of the register of deeds of the county in which said real estate is situated.” It is provided further, that the record of such instrument shall impart notice to others. “No such instrument in writing shall be valid, except between the parties thereto and such as have actual notice thereof, until the same shall be deposited with the register of deeds for record.”
Section 3, referred to in this case, is as follows: “ The recording of the assignment of a mortgage shall not be deemed, of itself, notice to a mortgagor, his heirs or personal representatives, so as to invalidate any payment made by them, or either of them, to the mortgagee.” Gen. Stat. Kan., 1868, p. 582.
Another section of the statute provides for the cancellation of the mortgage on the records. ■ The mortgage in the case, supra, had been cancelled by the mortgagee after he had assigned 'the notes. The question in the case is thus stated .by the court: “ The question now arises, who shall suffer > from the fraud of Shaver — the bona fide holder of the note and mortgage, or the bona fide purchaser of the mortgaged property?” In speaking of the statutes above set out, the court said: “ Sec. 3 of the act concerning mortgages recognizes ‘the recording of the assignment of a mortgage/ *563* * * And section 5 of the act relating to frauds and perjuries provides that no interest in lands exceeding one year in duration shall be assigned or granted, unless it be by some deed or note in writing, signed by the party assigning or granting the same. * * * Under these statutes we think it is perfectly safe for any person who has no notice of outstanding equities to purchase real estate which the records of the county apparently show is free and clear from all incumbrances. * * * Or, if the mortgage has been recorded and then has been regularly released on the margin of the record thereof by the mortgagee, then we think that any person, if he does it in good faith, may purchase the property in like manner freed from all liens and equities existing in favor of the holder of the mortgage.”
It will be noticed that the terms of the Kansas statutes are not as comprehensive as those used in our statute, and that section 3, of that statute, is the same as section 7 of ours, above set out. This case thus becomes an authority squarely in point in support of the proposition, that under our statutes in 1873 and 1875, assignments of mortgages might have been recorded, and thus afforded notice to subsequent encumbrancers.
The statutes of Iowa provide that no instrument affecting “ real estate ” shall be valid against subsequent innocent purchasers, unless recorded. E. S. Iowa, 1860, p. 391.
The phrase “ real estate,” as used in this statute, is declared by another statute to include all rights thereto and interests therein, equitable as well as legal. R. S. Iowa, 1860, p. 5, section 29.
In the case of Bank of the State of Indiana v. Anderson, 14 Iowa, 544, the contest, as already stated, was between the assignee of notes secured by a prior mortgage, and a subsequent bona fide mortgagee, after the first mortgage had been can-celled by the first mortgagee. In passing upon the case, and in construing the above statutes, the Supreme Court ¿aid:
“ But, again, a mortgagee is a purchaser within the mean*564ing of our recording acts. Porter v. Green, 4 Iowa, 571; Seevers v. Delashmutt, 11 Id. 176. Under this law, therefore, appellants are purchasers. An instrument affecting this estate is, therefore, invalid as against them, until it is recorded, and by ‘ real estate/ is meant ‘ all rights thereto and interest therein, equitable as well as legal/ * * The statute has thus given a general rule, and, unlike those of many of the States, has not undertaken to prescribe special regulations for the different instruments affecting real property. Some of the States, for instance, after providing a general law upon the subject of mortgages and conveyances, expressly require assignments of mortgages to be recorded. Our law, by using general terms, well defined and understood, obviates the necessity of more specific legislation. And, in view of this legislation, why should the assignee of a mortgage be exempt from the duty of placing upon record that which evidences his title to the ‘right or interest’ thus purchased.”
The statute of Minnesota, after providing that conveyances of real estate, to be effectual against subsequent purchasers, shall be recorded, that the word “ purchaser ” shall include assignees of mortgages, etc., and that the term “ conveyance,” as used in the statute, shall be construed to embrace every instrument in writing by which any estate or interest in real estate is created or assigned, etc., or by which the title to any real estate may be affected, etc., further provides as in section 7 of our statute, above set out, that the recording of assignments of mortgages shall not of itself be notice to the mortgagor, etc. Statutes of Minn., 1849-1858, sections 24, 26, 29 and 30.
The construction given to these sections by the Supreme Court of that State is, that assignments of mortgages may, and must be recorded to protect the assignees of the notes against a subsequent mortgagee in good faith. Johnson v. Carpenter, 7 Minn. 176.
The statutes of Illinois provide that deeds or other written instruments relating to the conveyance of real estate, or *565any interest therein, or affecting the title thereto, etc., shall be acknowledged and recorded in order to affect subsequent purchasers; that the term “real■ estate,” as used in the statute, shall be construed as co-extensive in meaning with lands, tenements and hereditaments, and as embracing chattels real. R. S. Ill. 1874, ch. 30, sections 20, 28,30 and 38. These sections have been construed as authorizing the recording of assignments of mortgages, and it has been held that, unless the assignee of the notes procures and records an assignment of the mortgage, he will not be protected as against a subsequent grantee or mortgagee. Ogle v. Turpin, 102 Ill. 148.
The statutes of New York provide, and have for many years provided, for the recording of conveyances of real estate, and making them void as against subsequent purchasers unless recorded. It is declared by the statute that the term “conveyance” shall be construed to embrace every instrument in writing by which any estate or interest in real estate is created, aliened, mortgaged or assigned, or by which the title to any real estate may be affected in law or equity. Following these provisions is that providing that “The recording of an assignment of a mortgage shall not be deemed in itself notice of such assignment to a mortgagor, his heirs or personal representatives, so as to invalidate any payment made by them or either of them, to the mortgagee.” 2 R. S. N. Y. 1875, p. 1151, section 76; Id., p. 1138, et seq.
It will be noticed that section 7 of our statute, supra, is almost a literal copy of the section above set out. Our registry laws, as most of the western States, were doubtless modelled after the New York statutes, and hence none of them have a provision declaring in explicit terms that assignments of mortgages shall be recorded. That is provided for by the use of general terms, and the section declaring the effect of such an assignment.
In the case of Ely v. Scofield, 35 Barb. 330, the court, in speaking of the New York statutes, supra, said: “ The term ‘ conveyance/ as used in the chapter referred to, shall be con*566strued to embrace every instrument in writing by which any estate or interest in real estate is created, aliened, mortgaged or assigned, or by which the title to any real estate may be affected in law or equity. * * * By section 41 of the same chapter, (p. 763), it is declared that the recording of an assignment of a mortgage shall not be deemed, in itself, notice of such assignment, to a mortgagor. * * * The references to the statutes embrace all the provisions thereof which' can be claimed to bear upon the questions involved in the present case. * * * It' was competent for the plaintiff to have put his assignment on record, and thus have protected himself against the satisfaction of the mortgage by Brockway. Such record would have been notice to all the world, excepting the mortgagor.” The plaintiff here spoken of was the assignee of the notes from Brockway, the mortgagee. This case is fully sustained by many other New York cases. So far as I know, it has never been doubted, but many times approved and followed. See VanKeuren v. Corkins, 66 N. Y. 77; Vanderkemp v. Shelton, 11 Paige, 28; Belden v. Meeker, 2 Lansing, 470; Belden v. Meeker, 47 N. Y. 307; Greene v. Warnick, 64 N. Y. 220.
Under statutes similar to ours, and those above referred to, the Supreme Court of Texas in the case of Henderson v. Pilgrim, 22 Texas, 464, said: “ Not to consume time, by referring to other cases, we think it is the obvious policy of our registry laws, to require all instruments concerning lands to be recorded in the proper county. (Hart. Dig., art. 2752 * *). We are of opinion, that an assignment of a mortgage is ‘ a lien affecting the title to land’ — ‘a written contract in relation to land’ — ‘an agreement’ — ‘an instrument of writing of or concerning land,’ within the meaning of our registry laws, such as ought to be recorded, to make it effectual against subsequent purchasers, for a valuable consideration, without notice.” See again the Supreme Court of U. S., supra, under the statute of Í). C.
It can not escape observation that our statutes, in force *567when the release and mortgage were executed, were as explicit and comprehensive as those of any of the States above referred to, and more so than some of them. The adjudications upon those statutes are authority in the interpretation and construction of ours, and fully support the ruling in the case of Ayers v. Hays, supra.
Filed March 25, 1884.
.If time and space would permit, the case could be further fortified by the decisions in the other States upon similar statutes. No case to the contrary has been cited, and I take no. risk in assorting that a case can not be found under statutes like ours, which supports the principal opinion. It should be observed, too, that in each of the States above named it is held, as in this State, that a mortgage does not convey the legal title, but is of the same force and effect as in this State. In conclusion, I am for jirotecting the subsequent mortgagee in the case before us, by affirming the judgment of the court below.