In Junе of 1908, Michael Borbely applied to the Citizen's’ Building and Loan Association of Perth Amboy, New Jersej', for a loan of $800 on lot 8 on the northwest corner of LaYrence and Pine streets, in that city, being twenty-five feet wide by eighty-five feet deep, producing his deed frpm Hoyen and Ostergaard, bearing date March 11th, 1908, recorded March 20th, 1908, which deed was made out to him and his wife under the name and spelling аs follows: “Michael Borbely and Elizabeth, his wife.”,
He was not known by any other name to the solicitor who drew up the bond and mortgage. The bond and mortgage were drawn in the names as they apj>eared in the deed, but when signed by Borbely and his wife,' the signatures looked like “Mezk Barbily,” and “lizi Bourbi,” or a.s nearly in that way- as can be made out from the signatures.
The solicitor procured a search of title to the lot, made by the county clerk of Middlesex county, which showed the deed and mortgage and two lien- claims, both of which were against Michael Borbely and Elizabeth Borbely.
The mortgagors applied for a further loan of $300 which ■was granted, which bond and mortgage arc dated August 5th, 1908. In this second bond and mortgage the names were used as in the prior mortgage and were signed in exactly the same way, with thе exception that on the mortgage the wife seems to have spelled her last name “Barbie” or “Barbei.”
The mortgagors had a pass-book made out in the names as given on the deed аnd in the mortgages, and continued to make payments on account of the mortgages until October of 1912, when they had reduced the amount to the sum of $S76'.5S. At that time they applied for -a further loan of $1,800 which was
A new mortgage was made out to the association for the sum of $1,800, covering both lots, using the names as they had been given. A search was -made on the two lots, which showed the two deeds, the two рrior mortgages and the two lien claims already referred to. The search was made against Michael Borbely and Elizabeth Borbety, the names appearing in the deeds, neither the searcher nor the solicitor of the building and loan association knowing that the parties went under any other name- than that given in the deed and prior mortgages. The new mortgage was executed and acknowledged and recorded.
Borbely was a liquor dealer, and on May 11th, 1910, over two years before the execution and recording of the $1,800 mortgage, he gave a mortgage to the cоmplainant for $800, which mortgage was recorded on May 15th, 191Q. This mortgage was made out in the name of “Mike Barbi and Lizzie Barbi,” sometimes known as “Barboe,” and purported to cover property оn the corner of the two streets, twenty-five feet wide by one hundred feet deep, which, as a matter of fact, was a greater depth by fifteen feet than the parties dwned. The name on the bоok of the brewing company produced in evidence was “Babey.”
. It is admitted that the mortgagors in the mortgages to the building and loan association are the same who executed the mortgаge to the complainant.
The question in issue is, whether the mortgage of complainant is prior to that for $1,800 held by the association.
The first and second mortgage, never having been canceled of record, will undoubtedly take precedence of the mortgage given to the brewery company, notwithstanding that the building and loan association included them in the mortgage for $1,800. That aрpears to be quite plain and needs no discussion.
The complainant contends that the mortgagors held, themselves out at “Barbi” or “Borbi” to the knowledge of the building and loan assoсiation, because the association had in its possession at the time of the making of the $1,800 mortgage two bonds and two mortgages which were so signed by these parties.
Of course, every granteе is bound by everything that appears in his deed, and a nice question arises whether the building and loan association was put on inquiry from the fact that the names as signed by Borbely and his wife, differed from the names in the body of the instruments and the acknowledgments. The solicitor for the building association testified that if his attention had been carefully directed to the signatures at the time the mortgage was signed, he wоuld merely have supposed that it was an illiterate way that the parties had in writing their names. If Borbely and his wife had signed each of the mortgages and bonds alike, namely, “Mike Barbi” and “Lizzie Barbi,” it would seem that this would have been sufficient to put the building and loan association on inquiry, and if they had followed it up, they would have found the mortgage for $800 to the brewery company.
However, such is not the casе. The building and loan association would not have been able, in my opinion, to have found the record of the mortgage given to the brewery association.
Besides this “a grantee is chargeable with knowledge of the title of his grantor as it exists in unbroken sequence on the records of the clerk’s office.” Wallace v. John Silsby and Henry Marlin, 42 N. J. Law 1.
In that ease Chief-Justice Beasley held: “That the title of the grantor, as it appеars in regular sequence and unbroken continuity on the record, is a fact within the consciousness of the grantee at the time that he accepts his conveyance, is a conclusion juris el ele jure. This is а doctrine which I do not think has ever been brought into doubt in this state.” See also Losey v. Simpson, 11 N. J. Eq. 249.
Of course, a deed or mortgage made by a grantor in a fictitious name is perfectly good as between the parties themselves, but,, in my opinion, not as against a purchaser for a valuable consideration, who had neither actual nor constructive notice.
Complainant contends that even though the proper name of the mortgagors is Borbely, and that the name by which they mortgaged the land was-fictitious, yet, he being the real owner of the property, and the mortgage having been recorded, it is noticе to all subsequent purchasers and mortgagees, citing the following c-ases in support of his contention: Weihl, Probasco & Co. v. C. P. Robertson et al., 97 Tenn. 458; 39 L. R. A. 433; Fallon v. Kehoe,
The case of Mackey v. Cole,
1 am, therefore, oil the opinion, that the mortgage of the building and loan association for $1,800 is entitled to priority of payment over the mortgage of the Lembeck & Betz Eаgle Brewing Company, because, at the time the building and loan association niortgáge was given, the mortgage of the brewing-company was not constructive notice, inasmuch as it was recorded in the names of the mortgagors in such form that a search in the real names of the owners -would fail to disclose it. If the searcher is charged with the duty of searching for fictitious names, either in the chаin of title, or for encumbrances in order to locate instruments of record affecting the premises involved, the recording system -would be a nullity, and the searcher would be helpless, becausе he has no means of determining what fictitious name may have been employed by a grantor or a mortgagor in a previous deed or encumbrance.
To sustain the brewing company’s mortgage as the prior lien would be to sustain the illogical and intolerable situation thus outlined, and would make ducks and drakes of the recording system in New Jersey. A search would be useless and the result would be confusion and confusion worse confounded.
Eurthermorе, on the pure equities of the situation, the brewing-company was in an undoubted position of ability to protect itself, as well as the building association, against a situation such as has now arisen, by having а chain of title search made which would have disclosed the correct name in which ownership of the premises then stood, and then insisted upon the mortgage being executed accоrdingly. If that had been done — and in these days no reasonably prudent person takes title or makes a mortgage loan without a search — the brewing company’s mortgage would have been indexеd in the same names as the owners, “Borbely,” and the building association’s search made by .Mr. McWilliams in that name would have disclosed the brewing company’s mortgage, and the building association could thеn have taken appropriate action to protect itself. -The recording of the Borbely deed was unquestionably constructive notice to the brewing company of the real names of the owners.
I will advise a decree in accordance with these views.