130 Mich. 567 | Mich. | 1902
The complainant, a mortgagee, foreclosed her mortgage, which, when given, covered several distinct parcels of land. Defendant Chateauneuf had, after the execution of complainant’s mortgage, unbeknown to the complainant, purchased, entered upon, and improved one of said parcels, which we may designate as “Lot 8.”
Complainant’s mortgage was made on October 10, 1881. At that time there was no building upon lot 8. Defendant Chateauneuf bought the lot in'May, 1882, erected a house, and moved upon the premises in June, 1882, or thereabouts, and has since occupied it as a homestead. He received a deed from Lewis, complainant’s mortgagor, in 1887, when he gave a mortgage back to Lewis for $192. The evidence shows that the complainant released several parcels of land from the lien of said mortgage after the defendant Chateauneuf purchased and entered upon lot 8. There is, however, an absence of proof that either the complainant or her agent had actual notice of defendant’s rights. It is insisted by defendant’s counsel that complainant had constructive notice. The mere fact that defendant’s deed was of record is not constructive notice. In order to raise an equity in favor of a purchaser, it must appear, either that the mortgagee, before releasing, had notice of the sale by the mortgagor, or that the purchaser was claiming rights which would put a reasonably prudent man on inquiry. In such case he would be held to notice of facts which the record of the deed would disclose.
The defendant asserts that the circumstances of this case should constitute such notice as would put a prudent man on inquiry, claiming that the complainant’s agent was in the city once or twice a year, and must be chargeable with knowledge of defendant’s occupancy. We are referred to the case of Dewey v. Ingersoll, 42 Mich. 17 (3 N. W. 235), as a case in point, where it was held that the facts should have put the mortgagee upon inquiry. The facts were that the mortgaged premises were upon one of the principal streets of the village where the mortgagee resided, and the purchaser promptly recorded her deed and went
This court said, in the case of James v. Brown, supra:
■ “While the law requires every man to deal with his own so as not to injure another, it imposes a greater obligation on the other to take care of his own property than on a stranger to take care of it for him. And to make it the duty of the first mortgagee to inquire before he acts, lest he may injure some one, would reverse this rule, and make it his duty to do for the second mortgagee what the latter should do for himself. To affect the conscience, therefore, of the first mortgagee, — for this whole doctrine is one of equity jurisprudence, and not of positive law, — it would seem that he should have actual knowledge of the second mortgage. We do not say notice from the second mortgagee is absolutely necessary to enable him to claim the rights of which we have been speaking; but we do think that the existence of the second mortgage should clearly be brought home to the knowledge of the first mortgagee in such a way. as to show an intentional disregard by him of the interests of the subsequent mortgagee.”
We think, therefore, that the complainant has not impaired her security by her releases.
We are unable to find that anything was paid to Lewis upon the mortgage after the trust deed was made, and, if it- could otherwise be claimed that the trust deed operated as an assignment of the mortgage to the complainant’s agent, it is not clear that it had not been previously paid to Lewis. Nor is there any proof that Balen ever heard of the mortgage. The record does not warrant us in saying that rents received by Mr. Lewis .were not applied in accordance with the trust deed, and we find no evidence showing how much, if any, collected by Lewis was not paid over. Neither does it appear how much, if any, was collected by the family after Lewis’ death, nor how much has been uncollected, if any. We must assume that the amount reported due upon the mortgage is correct, and feel constrained to hold that lot 8 should not be discharged from the mortgage. It should be the last parcel to be