Aсtion to determine adverse claims to certain real property, in which plaintiff had judgment, and defendant appealed from an order denying a new trial.
One McKelvey was formerly the owner of the property, lot 22, block 2, Wann’s addition to St. Paul, and in 1895 mortgaged the same to Bessie M. Kern to secure a loan of $500. The mortgage wаs recorded at about the date of its execution, but has never been paid. On November 12, 1903, McKelvey by quitclaim deed conveyed the lot to plaintiff for the consideration of $5. The deed was not recorded until after the commencement of this action. On November 8, 1906, McKelvey by warranty deed in due form conveyed the lot to defendant Kush B. Wheeler; the consideration paid being the sum of $15. On November 3, 1906, prior to the conveyance just mentioned, defendant Wheeler purchased and became the owner of the Kern mortgage, paying therefor the sum of $25. The transfer of the mortgage was by written assignment in due and proper form. Thereafter Wheeler pаid all the taxes due upon the property' by a purchase of the same at a forfeited tax sale held on November 12, 1906. On November 16, 1906, he caused to be recorded in the office of the register of deeds his deed from McKelvey, the as
From this statement it will be seen that both parties claim title through McKelvey. Plaintiff’s deed was first in time, but defendant’s, second in time, was- first recorded. Plaintiff’s deed was therefore void as to defendant’s, provided defendant was a bona fide purchaser. Defendant claimed on the trial that he purchased the property in the ordinary coursе of business, for a valuable consideration, and without notice of the prior deed to plaintiff; while plaintiff contended that defendant had knowledge of the deed on the date of its execution, and was again expressly informed of its existence at about the time and before he recorded his deed and the satisfaction of the Kern mortgage.
Two questions are presented: (1) Whether the finding of the trial court to the effect that the defendant, at the time he obtained his title had notice of the prior deed to plaintiff, is sustained by the evidence; and (2) whether, even if he had such notice, and was not, therefore, a bona fide purchaser, defendant is entitled to judgment reinstating the satisfied mortgage.
1. Upon the first question little need be said. A careful examination of the record leads to the conclusion that the findings of the trial court are sustained by sufficient competent evidence. The testimony shows that 'defendant was familiar with the- property, that some years prior to the time plaintiff рurchased the same defendant sold it to McKelvey and negotiated for his client, Mrs. Kern, the mortgage here involved. He was well acquainted with McKelvey and transacted business for him. He also knew and had had previous business relations with plaintiff’s husband. The testimony of plaintiff’s husband is clear that at the time he procured for her the deed from MсKelvey he expressly informed defendant of the fact. The evidence is also clear that, two days prior to the date oh which defendant recorded his deed and satisfied the mortgage, he was again informed of the existence of plaintiff’s deed. Defendant testified that1 he had no recollection of any conversatiоn with plaintiff’s husband, in which he was informed of plaintiff’s deed. He did not expreásly deny the fact, but said he did not remember any such conversation or-
Counsel for defendant with much earnestness urge upon our attention a question of burden of proof, insisting that in cases of this kind, where the holder of the subsequent deed offers evidence that he acquired the same in the usual course of business for a valuable consideratiоn, and the transaction is free from suspicious circumstances, a prima facie case of bona fides is made out, and the burden of proof shifts to the shoulders of the unrecorded deed holder to overcome it by a fair preponderance of the evidence; and he insists that in this case plaintiff in her evidence failed to meet the requirements of the rule as invoked. The learned trial court correctly disposed of this point. There -is no “shifting” of the burden of proof in cases of this kind. When McKelvey deeded the property to plaintiff, he parted with all his interest therein, and he had nothing to convey at the time of the execution of his deed to defendant. All his title and beneficial interest had previously passed to plaintiff. Defendant’s, deed, therefore, was of no force or effect as a transfer of the property to him, except by virtue and force of the recording statutes, and then only upon an affirmative showing of the bona fides of his purchase. The statutes declаre that an unrecorded deed is void as against a -subsequent purchaser in good faith, and to give effect to a
2. The second question, namely, whether defendant is entitled to a reinstatement of his mortgage, must be answered adversely to his contention. This branсh of the case was presented by defendant’s counsel mainly on the theory of the law of subrogation; and he insists that, to entitle defendant to the relief prayed for, it is not necessary that either fraud or mistake be shown. We are unable to sustain this position. There can be no doubt of the authority of a court of equity, in a propеr case, to reinstate a satisfied mortgage or other lien upon real estate, when it appears to have been given under mistake, inadvertence, or procured by fraud. 27 Cyc. 1430, and authorities there cited; Banta v. Vreeland, 15 N. J. Eq. 103,
But where the mortgagee, or other holder of the mortgage, voluntarily discharges the same, he pays no money tо a third person to»
We therefore pass to the question whether any other recognized ground for the relief sought, fraud or mistake, is shown by the record. No fraud is claimed, and it is clear that relief cannot be granted on that ground. The satisfaction was the voluntary act of defendant, without inducement or suggestion from plaintiff. Nor do wе find any substantial reason for disturbing the conclusion of the trial court that there was no mistake of fact. Defendant was the owner of the mortgage, and, under the findings, satisfied it of record with knowledge of plaintiff’s deed. He was informed of that deed at the time of its execution, three years before the transaction in question, and again two dаys before he satisfied the mortgage. He was, with respect to this property, an adversary of plaintiff, who was under no obligation to pay the mortgage, and in the face of her claim of title to the property discharged it, not to protect any interest of his likely otherwise to be prejudiced, or because of any fraud оr unfair dealings on the part of plaintiff, but to perfect a title claimed by Mm to be adverse and superior to that held by plaintiff. Clearly, under such circumstances, he is not entitled to relief. Wadsworth v. Blake,
Nor is defendant entitled to relief on the the’ory that he mistook his legal rights, or did not understаnd the legal effect of the cancellation of his mortgage. Mistake of law, unattended by any misunderstanding of the facts, presents, as a general rule, no ground for the interposition of equity.' As remarked by Chief Justice Start in Truesdale v. Sidle,
Ignorance 'of 'the law was held, in Garwood v. Eldridge, 2 N. J. Eq. 145,
In the case of Talbot v. Garretson,
A situation like that at bar was presented in Bentley v. Whittemore, 18 N. J. Eq. 366, where the court held that if “a mortgage on land is paid off by the purchaser of the equity of redemption, and canceled in fact on the record by the purchaser, while under the misаpprehension that his title is good, he cannot, upon discovering that his title is not good, have the canceling set aside and the mortgage declared in force, on the ground that, had he then known of the defect in his title, he would have taken an assignment of the mortgage to perfect his title. The mistake must be a mistake as to matter оf fact, and not as to a question of law.” That case was substantially like that at bar, and follows and applies the general rule that mistakes in matters of legal rights furnish no basis for equitable relief. In disposing of that case the court said: “Courts of equity have power to correct mistakes and to protect from the consequencеs of them. It is one of the well-established heads of equity jurisdiction. * * * But it is only mistakes as to fact that entitle to this relief. It is well settled that this court will not relieve for a mistake as to the law.
There is pothing exceptional in the facts of the case at bar. The amount involved certainly presents no sufficient reason for extending relief or declaring the case an exceptiоn; for defendant’s pecuniary investment in the property does not exceed $100., and no other facts disclosed by the record remove the case from the general rule. Defendant erroneously assumed that his title was superior to plaintiff’s, because his deed was first recorded; and from this error, one solely of law, no equitablе relief can be granted on the facts disclosed.' The •authorities cited by defendant’s counsel have reference more particularly to the rule of subrogation, and have no application to facts like those here before the court. If, gs suggested in his brief, the facts were such as to constitute “legal notice” of рlaintiff’s rights, “without in any sense impugning the good faith of defendant,” a different case would probably'be presented. But, as we understand the law, actual .notice of plaintiff’s rights completely negatives good faith on the part of defendant. The case is wholly unlike Benson v. Markoe,
There was no error in the refusal of a new trial on the ground of newly discovered evidence.
Order affirmed.