Court Opinion

ID: 8267752
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:13:05.28112+00
Date Added: 2024-06-11T16:43:25.559281
License: Public Domain

The opinion of the court was delivered by
Reed, J.
It is perceived that this case presents no contested questions of fact. It conclusively appears that of the respective mortgages now contending for priority, the Shampanore mortgage was executed first but recorded last; that the Thomas mortgage, although recorded first, was taken by the mortgagee with full knowledge of the existence of the preceding mortgage. As to Thomas, therefore, having actual notice, of the Shampanore mortgage, he took his lien subject to the lien of that mortgage, and he gained nothing by his prior registry.
The questions involved in this litigation arise out of the assignment of the Thomas mortgage to Hoagland, who took it without actual notice of the existence of any prior mortgage upon the property covered by the one he purchased. The inquiry is, whether he, by reason of his purchase, secured a position, in regard to the prior mortgage, which was superior to the position of Thomas, his assignor. It is true that the appellant claims that, by the terms of the recording act, as to both Thomas and Hoagland, the mortgage of Shampanore was void.
This contention is put upon the ground that this act declares that unless a mortgage (where there is no delivery of the mortgaged goods) shall be filed, it shall be absolutely void as against *592the creditors of the mortgagee, and that both Thomas and Hoagland occupied the position of creditors.
But it is apparent that while creditors, their lien, whatever it was, was as purchasers only. Judge v. Vogel, 38 Mich. 569.
This, then, as I observed, leaves as the only question the effect of the purchase of the mortgage by Hoagland without notice. Outside of the operation of the registry act it is clear that the assignee could get no greater interest by his purchase than was possessed by his assignor. Priority of time would ha,ve given Shampanore priority of right. The second mortgagee could have conveyed no better title than he possessed, which was a lien subject to that of the preceding mortgage.
The contention is, that by force of the registry acts this rule was modified—that this first mortgage being unregistered until after the registration of the second mortgage, a purchaser of the second mortgage had the right to rely upon the condition of the record, and so his mortgage gained the position which the record indicated.
But if we accord to the assignee the character of a purchaser, and should extend the protection of the statute to him as such, yet there was a record of the first mortgage at the time of his purchase, and he certainly was not a subsequent purchaser without notice. His right must therefore stand upon his character as assignee of a chose in action.
The general rule is, that such an assignee, even if a bona fide taker, stands in the steps of his assignor. That the assignee of a mortgage takes the place of the mortgagee, and is chargeable with the notice which the mortgagee and assignor had of a preceding unregistered mortgage, was held by the court of chancery in the case of Conover v. Van Mater, 3 C. E. Gr. 481.
The decision was put upon the non-negotiable character of a chattel mortgage, which is a mere chose in action. Mr. Pomeroy asserts that so long as the distinction between negotiable and nonnegotiable obligations is preserved in our jurisprudence, it must be considered as settled that the assignee takes subject to all equities.
In the recent case of Decker v. Boice, 83 N. Y. 215, decided *593in the court of appeals in the state of New York, it was held that the assignee in good faith and for a valuable consideration, of a recorded chattel mortgage, got no preference over a prior unrecorded mortgage by reason of such record, when his assignee was precluded from claiming it by reason of notice of such equity.
I think, therefore, that if Hoagland occupied the position of a bona fide purchaser of the Thomas mortgage, yet as his assignor took it subjected to the prior lien of the mortgage to Shampanore, he is unable to assert a larger right.
The decree below should be affirmed.

Deeree unanimously affirmed.