Court Opinion

ID: 6597596
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:04:32.064579+00
Date Added: 2024-06-11T15:57:54.057244
License: Public Domain

By the Oourt,
Cole, J.
It does not seem hardly possible to entertain a serious doubt of the right and power of Garvey and wife to waive the priority of their mortgage in favor of the subsequent one given to Lyness. IJp to the 27th of July, 1855, the first mortgage belonged to them, and they could release or discharge it, or if they saw proper to do so, they had a perfect right to substitute another in its stead. And it appears that for a good and valuable' consideration, they agreed in writing, under seal, to waive the priority of their mortgage in favor of that given to Lyness ; they executed this agreement in the presence of two witnessess, acknowledged it before a person- competent to take acknowledgements, and this agreement was recorded in the proper office, on the 19th of May, 1855, something more than two months before the Garvey mortgage was assigned to the appellants. Now the simple inquiry is, does not our statute in terms expressly make this agreement, thus executed, and recorded, notice to all the world of the import and meaning of this instrument ? Where a first mortgagee agrees in writing under seal with a second mortgagee, to waive his prior lien in favor of the subsequent incumbrance, does it admit of doubt or controversy as to wliether an agreement of this character is an agreement concerning an interest in lands, within the meaning and sense of section one, chapter sixty of the revised statutes ? Suppose Garvey and wife had filed the bill to foreclose the mortgage given to them, would not the court have given effect to their agreement under seal, and held that the Lyness mortgage had preference? Undoubtedly. But how are the equities of the case strengthened in favor of the assignees ? It is insisted by the counsel for the appellants that our registry law is not retrospective but prospective in'its operation. Admit that this is so, and how does it help the appellants’ case ? As already observed, the agreement of Garvey and wife *375to give tbe mortgage of Lyness preference over their mortgage, was executed and placed upon record more thau two months before the mortgage set forth in the bill was assigned to the complainants, and it appears to us if section three of the chapter before referred to is to have any force whatever, we must hold that the recording of the agreement was constructive notice of its contents to the complainants. Under such circumstances the law declares that the complainants were not bona fide assignees of the first mortgage without notice of the agreement. The only natural and reasonable effect to be given to the recording of the agreement, is to charge the assignees with notice in law of the contents of the instrument.
We have examined the cases cited in the brief of the counsel for the appellants, but we see nothing in them to change • our views of the proper construction of our registry law. We are entirely clear that the agreement to make the Lyness mortgage the prior incumbrance, comes fully within the letter and spirit of this law, and we therefore must conclude that the appellants are not innocent purchasers of the first mortgage, but took it subject to all the equities existing between Garvey and wife and Lyness.
An objection was taken to the directions of the decree rendered by the circuit court, and it was contended that they were unusual, extraordinary, and unauthorized. But we think the decree was in conformity to the stipulation entered into between the parties, bearing date June 6, 1856. As we understand that stipulation, the parties agreed that the appellants might go on under their decree of foreclosure and sell the mortgaged premises without prejudice, and that Lyness was to file his answer and prosecute his defense as though no order pro eonfesso had been entered against him, and that on the salejof the real estate, a sufficient sum of money was to be considered in court to satisfy the mortgage of Lyness, should the court decide that his mortgage had the preference.
In view of the facts of the case, the court very properly decided that the Lyness mortgage was the prior incumbrance, and of course was entitled to be first satisfied out of the *376proceeds of the sale. If the appellants had really taken all the money ont of court, they had obtained more than they had any right to, and in the spirit of their stipulation, and by the power of the court over the fund, they might be ordered to refund a' sum sufficient to satisfy the prior lien. This in good conscience and equity as well as by their agreement they were bound to do.
The decree of the circuit court is affirmed.