3 Yeates 351 | Pa. | 1802
Lead Opinion
Elizabeth Kintzing, though a bona fide creditor, lost the surety of her mortgage, as to all other persons except Burke, and those who were in pari delicto, by not recording her mortgage in six months. Allen was an innocent purchaser, ignorant of the mortgage. He therefore shall not suffer by her default, who by not recording in time, put it in the power of Burke to deceive him. As to Harrison, he was an innocent assignee of Burke; and though in general, an assignee stands in the shoes of the assignor, yet this appears to me one of those cases, where an assignee stands on better ground, than the as
As to Allen’s losing the land by not recording his deed within six months, he does not by this revive the right of Kintzing, but would have subjected himself only to the claim of a subsequent purchaser, who recorded before him. Then as Kintzing could not avail herself of her mortgage as against Allen, and he must pay the amount of his bond to somebody, it must be to •Harrison the innocent assignee.
The true construction of the recording laws, will in my idea, in a great degree, determine the point reserved, in this case.
The mortgage by John Burke to Elizabeth Kintzing is dated 8th October 1795, and was not entered on record, until 2 years, 3 months and 17 days after it was executed. The mortgaged premises were conveyed by Burke, the nominal plaintiff, to Richard Allen the defendant, on the 23d April 1796, and this deed was not entered on record, until 1 year, 9 months and 20 days had expired, being 18 days after the mortgage was recorded. .
Hence it is contended, that the mortgage shall prevail, on the ground of its being first recorded. And if it is an existing le*gal incumbrance, affecting the defendant’s lands, there ,-¥ can be no question, as to its being entitled to be defaulked [*355 out of the present bond.
The 8th section of the law of 28th May 1715, (1 St. Laws 112) is as follows: “No deed, or mortgage, or defeasible deed “in the nature of mortgages, hereafter to be made, shall be “ good or sufficient, to convey or pass any freehold of inheritance, “ or to grant any estate therein for life or years, unless such “deed be acknowledged or proved and recorded, within six “months after the date thereof, where such lands lie, as herein “before directed for other deeds.”
It is objected, that the conveyance to the defendant is comprehended in this description. But it is to be observed, that the words, in the nature of mortgages, run through the whole sentence, and the latter word is in the plural number; they limit and controul the generality of the preceding expressions. Besides, other deeds in the close of the section, contradistinguish the objects of it, from the deeds in general provided for in the preceding parts of the law ; and the uniform construction of the act, since it has passed, has been, that in this particular, it solely relates to mortgages, and defeasible deeds in their nature. It would be highly dangerous at this time, to adopt the words in a different sense, whereby many titles might be affected.
The first section of the law of 18th March 1775, (1 St. Laws 703,) enacts, that deeds and conveyances of lands, which shall not be recorded in the proper county within six months after
I conclude, therefore, that the mortgage to Elizabeth Kintzing does not bind the lands conveyed to Richard Allen, though it would have been effectual against John Burke himself, the mortgagor, if the same was in his hands, agreeably to the authority of Levinz v. Will, (1 Dall. 134,) on this plain ground, that in such case no one would be injured thereby.
I readily agree with the counsel, that if Burke was the real plaintiff, the defalcation contended for would certainly take place, and that an assignee is subject to all the equity which subsisted between the original parties. I lay no stress whatever on the circumstances of the payments of 50 dollars in February 1797, and of 150 dollars in April following, by Allen to Harrison. Such acknowledgments of the debt, or even an express promise to pay the obligation would not conclude the defendant, if made in a state of ignorance of a subsisting defence. 5 Burr. 2670. 1 Vern. 32. 1 Vez. 126, 400. 1 Fonbla. 106. 1 Espin. Ni. Pri. 174. 1 H. Bla. 64. But if Harrison had been led by the assertions or promises of Allen to take the assignment and pay his money, then the defendant would have made himself liable, because his declarations and engagements would form a new contract between him and the assignee, and he would not be permitted to injure an innocent stranger. This doctrine was laid down on full consideration, by Judge Smith and myself at Reading, at Nisi Prius in September 1799, between Ludwig assignee v. Croll, and was again asserted by Judge Smith at the sittings in Philadelphia, between Cairnes for the use of Olden v. Field and Harlan, and afterwards on a motion for a new trial, was assented to by the whole court, March term 1800.
In this case, I view Thomas Harrison as the true and real
The defendant Allen is bound to perform his contract and pay the stipulated price, but not beyond it. Whom then ought he to pay ? Has Mrs. Kintzing or Mr. Harrison the superior equity, or best founded claim to the money ? The former relied on the lands as her security, and at one time had a lien on them, but afterwards permitted it to slip through the fingers ; and if my ideas of the two recording acts are correct, the lands in the defendant’s hands cease to be chargeable with the mortgage. She neglected to perform a duty which the law imposed upon her, and if any injurious consequences result from her laches, she only is blameable. On the other hand, Harrison purchased the bond, relying on the credit and responsibility of Allen and is guilty of no default whatever. When he took the assignment before 21st January 1797, no incumbrances appeared on record to put him on his guard against Burke, and it is admitted that neither he nor Allen knew of the mortgage executed by Burke, until the same was recorded.
On the whole, I think the claim of Harrison much superior in point of equity to that of Kintzing, and that the money intended to be secured by the mortgage of the latter should not be deducted from the sum due on the bond.
Concurrence Opinion
I fully concur in the opinion delivered by my brother Yeates, though we have had no previous conference on the subject.
The dispute in this case, is in fact, between Thomas Harrison, to whom the bond, on which the action was brought, was equitably assigned before the 21st January 1797, and Elizabeth Kintzing, to whom the premises which Burke afterwards sold to the defendant, and for part payment of which this bond was given, had been previously mortgaged, viz. on the 8th October 1795, to secure the payment of 200I. Richard Allen is, or ought
In equity each is entitled to the money; for it is not alleged that Kintzing did not lend, or that Burke was not indebted to her every farthing of the 200I. ; nor is it alleged that Harrison did not give the full value for the bond, by Burke’s being previously indebted to him or otherwise; nor is it suggested, that he had *any notice of the mortgage till it was recorded, *358] which was more than a year after the bond had been assigned to him.
The act of May 1715, requires, that mortgages should be recorded in six months, or they shall not be good or sufficient to convey or pass any freehold or inheritance, or to grant any estate therein for life or years. And the act of March 1775, directs that all deeds and conveyances, &c. for or concerning any lands, tenements, or hereditaments, or whereby the same may be in any way affected in law or equity, and not recorded in six months, shall be fraudulent and void against any subsequent purchaser or mortgagee, &c. These laws are founded in wisdom and productive of justice and security, to purchasers and mortgagees in most cases. A case may happen, in which the protection intended by them cannot reach a subsequent mortgagee, without any want of caution on his part, as the title deeds in Pennsylvania do not necessarily, and in practice, accompany mortgages. In all other instances these laws protect purchasers and mortgagees; but both may lose that protection by their own neglect. Unless Kintzing has been guilty of such neglect, in not duly recording her mortgage, the plaintiff cannot recover, because it was given prior to the sale to the defendant, and if recorded in due time, it will take effect from the time of its execution.
The bond is equitably assigned; but it is a rule in law, that a bond, which is only assignable in equity, (and consequently a bond equitably assigned, or even legally assigned, as it may be in Pennsylvania) is still liable to and attended with the same equity, as if remaining with the obligee. 2 Verm. 765, 692. 1 Wms. 496. Prec. Cha. 522. 1 Equ. Ca. Abr. 45, pl. 5. 10 Mod. 455. 1 Stra. 240. The rule is right, that whoever takes the assignment of a bond, being a chose in action, takes it subject to all the equity in the hands of the original obligee; but length of time and circumstances may vary that, and make the case of the assignee stronger. 1 Vez. 123, per Ld. Hardwicke.
It has been assumed for granted in the argument, that the mortgage would be a good defence to Allen, against a recovery by Burke. I will also suppose the same thing, by which the question will be, whether length of time and circumstances have made the case of the assignee stronger ? I will state and observe upon both.
The mortgage is dated 8th October 1795, and the law required
But because the mortgage was recorded before the deed, which the defendant had also neglected to have recorded within the six months, the mortgagee is said to be yet entitled to recover, by the last clause in the 1st section of the act of 1775, and on the authority of Levinz v. Will, 1 Dall. 434.
The words of this act are certainly sufficiently comprehensive to include mortgages, had there not existed then the act of 1715, the 8th and 9th sections of which relate to mortgages exclusively. The 8th section declaring, that “ no deed or mortgage, “ &c. shall be good or sufficient to convey or pass any freehold “ or inheritance, or to grant any estate therein for life or years, “ unless recorded in six months,” it would be a strained construction to say that the clause referred to in the act of 1775, extends to mortgages, and gives them an effect by implication, contrary to the express words of the act of 1715, to the injury of innocent third persons. By the 8th section of the act of 1715, the recording of mortgages in six months is made a condition precedent; before the performance of it, no estate is conveyed or passed. But when this condition is performed, the mortgage takes effect by relation from the sealing and delivery. Cro.
By the act of 1775, recording is not necessary to pass the estate. It is declared, “that it shall be adjudged fraudulent and “void against any subsequent purchaser or mortgagee for a “valuable consideration.” As against all other persons, it is bona fide and valid, although never recorded; and even as against them, if it be recorded before their deeds, though after the six months. So by constraction, if they had notice of it, express or implied, it is valid against subsequent purchasers or mortgagees. 1 Equ. Ca. Abr. 358. 2 Equ. Ca. Abr. 482. Cowp. 712. 3 Atky. 654. 13 Vin. 550, pl. 9. 1 Vez. 64. Hargr. Co. Lit. 290, b. Ambl. 436, 624. Therefore the last clause in the first section of the act of 1775, for recording of deeds, does not apply to mortgages, not recorded within six months.
I have considered the case of Levinz v. Will with much attention, especially as I understood some years ago, that at least one of the bar, whose legal abilities I highly respect, had expressed dissatisfaction at the decision. I am free to own that at times my mind has been inclined to waver on the subject; but I cannot go so far as to say, that had I then been obliged to give my opinion, I would not (after hearing the strong reasoning of the late Chief Justice,) have concurred. Even if my doubts had been much stronger than they were, I would hold myself bound by the decision. But it does not reach this case. There was no innocent purchaser without notice to be affected by the neglect of the mortgagee. It does not appear that any of Levinz’s creditors had trusted him on the credit of the mortgaged property, or that the neglect of the mortgagee had enabled Levinz to commit a fraud upon any person. PIere, let me repeat, as one of two innocent persons must suffer, the loss ought to be borne by the person who is guilty of laches. I am therefore of opinion that judgment be entered for the plaintiff.
All the members óf the court have formed the same judgment, without communication between themselves.
When the legislature made bonds and notes assignable, and in the case of a bond with the solemnity of two witnesses, I scarcely think they had in view, that a defence could be set up against the assignee. But it has been early decided that it could be done, and we are bound by the decision. An exception has been taken to the general rule, and it has been lately decided, that where the taking an assignment is contemplated by a person, *and on application to the debtor, he is given to *361] understand that the bond will be paid, a defence cannot be afterwards set up. It might have been said in this case, that the debtor in saying that the bond was good, could mean no more than that for any thing he then knew, the bond was good
It would not lie in the mouth of the assignor to set up this. But an action of assembly has provided, that on the sale of real estate, it shall lie in the mouth of a purchaser without notice. There is not the same reason that it should lie in the mouth of an assignee of a bond, the consideration of which was the sale of the real estate; for the consideration does not appear upon the bond or note. He cannot by searching offices, or inspecting records, obtain information, of the validity of the writing, and that the sum on the face of it is recoverable. The debtor may say to the assignee, what have I to do with seeing you ? you took the assignment on the credit of the assignor. I am blameable for not supposing it possible that my consideration might fail by the dishonesty of the vendor, and by vigilance secured myself against it. You are blameable in not supposing it possible that the assignor might be dishonest, and made enquiry before the assignment, or secured yourself in the contract, or have had nothing to do with him at all; there is no privity between you and me in this transaction, that your taking this assignment should put me in a worse situation than I should otherwise have been in.
These were my ideas on first thinking on the subject, but I concur with the opinions which have been delivered.
In the case before us, a second class of exceptions have been stated; something done, or not done which ought to have been done by the debtor after the assignment. On application to the debtor, he says the bond is good. This may be under a mistake and ignorance of his defence ; it can mean no more, than that for any thing I know, the bond is good. It has been so decided *in the case at Reading, and even after such application, [*362 a defence was admitted against the assignee.
But payments have been made upon the bond. A bond may be payable by instalments, and the payment of the whole sum due would amount to no more than saying generally, the bond is good ; but the paying of the sum due and taking time from the assignee, and inducing him to forbear, would be another matter. He is laid asleep as to the assignor, to whom his eye had been before. For though it has been decided, or collected from the decisions of this court, that a covenant does not run with the assignment, that the bond or note shall at all events be.
Judgment for the plaintiff.
