Court Opinion

ID: 7964447
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:49:19.299378+00
Date Added: 2024-06-11T16:34:36.010332
License: Public Domain

Mitchell, J.,
dissenting. I do not think that the term “in good faith,” as applied in this statute to a subsequent purchaser or mortgagee, includes the element of want of notice of the prior mortgage ; or, which is the same thing, I do not think that the fact of such *524■notice renders the subsequent purchaser or mortgagee a purchaser or mortgagee in bad faith. It seems to me that the term “in good faith,” as here used, has the same meaning when applied to the subse-' tquent as when applied to the prior mortgagee, — that it means one who has purchased the property, or taken a mortgage upon it, fairly, and for a valuable consideration, without any fraudulent intent on his ■own part, and without being cognizant of, or implicated in, any fraudulent or dishonest intent on part of the vendor or mortgagor, — that is, who, neither committing nor participating in any fraud, pays a fair price, or takes a mortgage to secure an honest debt. It is important to notice the last clause of the section, which is, “unless it appears that such mortgage was executed in good faith, and not for the purpose of defrauding any creditor,” and which I do not find in the statute of any other state. The opinion of the court gives no intimation as to what meaning they would put upon this, or what force they would give to it. But if the construction they place upon the expression “in good faith,” as applied to a subsequent purchaser or mortgagee, be correct, this clause is without force or meaning; for if want of notice be essential to good faith, there never could be a subsequent purchaser or mortgagee in good faith when the prior mortgage was filed, for the filing is notice to all the-world. Again, if the .term “in good faith,” as here used, implies want of notice, why add, “and unless the mortgage, or a true copy thereof, is filed?”
No doubt, under most circumstances, the expression “purchaser in good faith” implies want of notice of prior conveyances, but not always or necessarily so. This depends on the nature of the case and the object of the statute. You cannot in every case inject into a statute which uses the term “purchaser in good faith” the additional term “without notice.” Sanders v. McAfee, 42 Ga. 250; Thornton v. Bledsoe, 46 Ala. 73. “Good faith” is the opposite of “bad faith.” “Bad faith” implies fraud or wrong motive.
Under mere registration laws, the essence and sole .object of which is to give notice, of course a person cannot be a purchaser in good faith who has actual notice of a prior conveyance, for he has all that the statute was designed to give him. This has been often so held, *525even under recording acts which, do not contain the expression “in-good faith.” So, too, in equity, a party will not be deemed a purchaser in good faith who buys with notice of prior equities. Cases of this kind have little or no application to the present case. Notice of a prior conveyance will not render a subsequent purchaser a purchaser in bad faith, unless the act of purchasing with such notice would be a wrong or fraud upon the prior vendee.
Our statute on chattel mortgages is not a mere registry laiv, as seems to be often assumed. It is a statute declaring certain mortgages void as to certain persons, unless certain things exist or are affirmatively made to appear. Its object is not merely to give notice to subsequent purchasers, or to protect those who purchase without notice-, of prior mortgages, as would be the case if it were a mere registration, act. How, in view of the provisions of this act, can it be said to be an act of bad faith, or a lack of good faith to a prior mortgagee, to take-a conveyance of property found in the possession of the mortgagor, simply because the party has notice of another mortgage which the law declares presumptively void, and conclusively so, unless the holder can make certain things appear? It seems tome that the object of the statute was to authorize all persons who, for an honest and fair purpose, have occasion to deal with the property, to do so on the assumption that any existing mortgage is presumptively void, and conclusively so unless the holder affirmatively proves its bona fieles. There is nothing novel in this. In many states, such as Massachusetts, Maine, Illinois, Missouri, and Wisconsin, chattel mortgages are declared void as against subsequent purchasers with or without notice, unless possession of the property has been delivered or the mortgage filed. I concede that, under common-law rules, defendant would not be in any better position than his grantor to attack plaintiff’s mortgage, for only he who had a prior right could have done so. But under this statute the rule is different, and under it actual notice on part of a subsequent mortgagee of a prior mortgage does not relieve the latter of the burden of making it affirmatively appear that his mortgage was executed in good faith, whenever he has permitted, the possession of the property to remain in the mortgagor. In short,. *526the term “in good faith,” as here applied to the subseV it purchaser or mortgagee, does not include want of notice of th prior mortgage. For this reason I am of opinion that the judgment a^uld be affirmed.