Court Opinion

ID: 7092742
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:07:43.596015+00
Date Added: 2024-06-11T16:13:08.496696
License: Public Domain

Lowe, J.,
dissenting. — I dissent from the foregoing opinion as failing, in my judgment, to reflect the law of the case. It is, confessedly, one of hardship and delicacy, *557because the facte show that both parties were alike innocent and Iona fide lien holders, and that one or the other must sustain, in all probability, a loss. The record discloses no fact that either impairs or displaces the equities of the plaintiff. It does not appear that he either did an act or omitted to do an act required by. any rule of the law merchant or the statutes of this State, which could legitimately have the effect to postpone his lien to that of the Artisans’ Bank.
When the plaintiff became the owner by assignment of Anderson’s notes, the mortgage given to secure the same, by operation of law, and without any additional formal act, followed it as an incident, and he became also the owner of it, in the same sense, and to the same extent, that he did the notes. At that time there was no other rival claim or incumbrance upon the property. His ownership was complete, and the bona fides of his security undisputed. Has he forfeited his character as an innocent purchaser and assignee? How? It is submitted he has done nothing himself or omitted to do anything that in law or equity can have this effect. It is true, without his consent, knowledge or procurement, that an intermeddler attempted to destroy the mortgage security by discharging the same of record without the slightest authority. This attempt being an acknowledged fraud, the act, so far as it affected the rights of the plaintiff, was wholly void; or if it had any significance whatever, it was to change his relation of assignor to the plaintiff to that of mortgagor, by taking to himself all the right, title and interest legal and equitable which Anderson had in the premises.
That the plaintiff failed to have the mortgage assigned in writing upon the margin of the record where- the same was recorded, is entitled to no serious thought, for the reason no such formality is legally required at hiá hands in order to preserve intact- his equities. Nor was he bound *558by any provision, of law or prevailing custom to have had the assignment of the mortgage acknowledged and recorded, in order to guard against the fraud of the assignor, or protect himself against the subsequently acquired rights of third persons. Such an act would be wholly inefficacious for the purpose of notice. This has been frequently ruled by the courts. The recording acts of Pennsylvania are quite as broad and comprehensive as ours, requiring all instruments affecting real estate to be registered. Yet it was held in the case of Mott v. Clark, 9 Barr, 401, that the assignee of a mortgage is not bound under the recording acts to register his assignment.
The same was held in the case of Pratt et al. v. The Bank of Pennington et al., 10 Ver., 293. This case was in some respects similar in its facts to the one at bar and determined in favor of the assignee, against a subsequent purchaser who had no notice of the assignment.
In the case of James v. Morey, 2 Cow., 288, Wood-worth, J., remarked, “ that the principle is well settled, that when an assignment of a mortgage takes place, without the privity of the mortgagor, the assignee takes, subject to the account between the mortgagor and mortgagee, and that payments to the mortgagee after assignment without notice, must be allowed by the assignee,” but further remarks: “I apprehend this is all the risk the assignee incurs. I have not met with any case that places the rights of the assignee on other or different grounds, or that gives countenance to the suggestion that the assignee must, at his peril, give notice to a subsequent assignee or purchaser from the mortgagee. Such a doctrine is not only most unreasonable in itself, but would shake the foundations of security by mortgage assignment, hitherto deemed equal to that of the original mortgage.” * * * “ When the mortgagee makes.a second assignment, the assignee knows that a prior assignment may have been made, and conse*559quently must, as to that fact, repose on the- responsibility and integrity of his assignor. If he should be deceived, it is more equitable that he should suffer than to divest the right of the first assignee.”
And all this for the plain reason, that the law will not intend that'to be known, for the existence of which there is no legal necessity. No presumption can be indulged, that if the assignment had been recorded, the defendant would have become apprised of the fact. We are not to suppose that he would examine the records, unless he was bound to do so in law. The question, therefore, is not what the plaintiff might have done in this case to apprise subsequent grantees or mortgagees that he was himself an incumbrancer, but what he was bound in law to do in order to preserve the priority of his lien against junior claims. It is claimed that it was in his power to have prevented the fraud committed by Mobley, or rather to have protected subsequent grantees or lien-holders, by putting his assignment upon record, and having failed to do this, his rights should be postponed to those of the defendant. It is true he could have done so, but he was under no greater moral or legal obligation to do so than the defendant was, when he found the Anderson mortgage satisfied, to have inquired of Anderson whether said mortgage had not been transferred before satisfaction, and whether he had taken up his notes and paid the debt. If he had observed this prudence, the probability is he would have suffered no loss. Still no laches in law is imputed to him for the omission; and the two banks should be regarded as equally innocent and bona fide mortgagees, and in this attitude of the case, without indulging in further comment upon other phases of the case^ I will state briefly what I conceive to be the law applicable to the facts of this case.
I. A mortgage, under the laws of this State, is simply a lien or security without (if it is upon real estate) convey*560ing to the mortgagee the legal title, usufruct, or possession until after default, foreclosure and sale.
II. That the notes of Anderson, indorsed by Mobley to the plaintiff in this case, carried with them, as appurtenant thereto, the mortgage given to secure the same, by which act Mobley parted with all right to, or' control over, said notes and mortgage, until he paid the debt for which he had given them in pledge.
TTT. That a cancellation and discharge of the mortgage by the assignor after its transfer and before the payment of said debt, was a fraud in law upon the assignee, and his rights as such were as wholly unaffected thereby as if the same thing had been done by some intermeddling stranger.
IV. That when two parties equally innocent and bona fide, have each acquired a mortgage lien to the same property, equity, as a general rule, will recognize no preference, but will order their claims to be alike paid according to their respective priority of date, that is to say, a prior lien will give a prior claim which is entitled to prior satisfaction out of the fund upon which it attaches, unless such a lien be intrinsically defective, or be displaced by some act of the party holding the same, which may operate in a court of law or equity to postpone his right to that of a subsequent claimant. Rankin v. Scott, 12 Wheat. R. (U. S.), 179; Brown’s Legal Maxims, 264, and authorities there cited.
The facts of this case do not show that the plaintiff’s right of priority, under the above maxim, has been forfeited or impaired by any act of omission or commission on his part, and therefore the judgment rendered in his favor below should be affirmed.