98 Ala. 539 | Ala. | 1893
In réspect of tbe rights of an assignee of a mortgage securing indebtednesss not evidenced by negotiable paper, there are two distinct lines of authority establishing different doctrines in their respective jurisdictions. In New York, and perhaps in one or two other States, tbe rule is, that tbe purchaser of such a mortgage succeeds only to tbe rights of tbe mortgagee, and is chargeable with notice of j and tabes subject to, the equities existing, not only between tbe mortgagor and mortgagee, but also between tbe latter and third persons, at tbe time of tbe transfer.—Bush v. Lathrop, 22 N. Y. 535.
In other States — Pennsylvania, New Jersey and Michigan among them — tbe assignee of such a mortgage is chargeable only with notice of equities existing between the mortgagor and mortgagee, and this limitation is based on tbe consideration that an assignee can readily inquire of tbe mortgagor what claims he may have against the debt and mortgage which tbe assignee is about to purchase, but be may not be able by tbe utmost diligence to acquire knowledge of tbe latent equity of some third person. — 15 Am. & Eng. Encyc. of Law; pp. 860-1. And this is tbe view taken by Chancellor Kent in Murray v. Lylburn, 2 Johns. Chan. 441, and declared in a dissenting opinion delivered by him as chief justice in tbe.case of Bebee v. Bank of New York, 1 Johns. (N.
We conceive these cases to have established in this State the rule, that defenses and equities existing, between a mortgagee and third persons will not affect the rights of an as-signee of the mortgage, unless he had notice thereof at the time of the assignment, and that an assignee for value of a subsequent mortgage, without actual notice of a prior unrecorded mortgage, is not prejudiced by the fact that his assignor, the mortgagee, took with notice of the first mortgage.
The evidence was without conflict that the mortgage under which plaintiff claims title to the property in suit was not recorded until after the defendant became á purchaser for
Reversed and remanded.