Pickett v. Barrow

29 Barb. 505 | N.Y. Sup. Ct. | 1859

By the Court, E. Darwin Smith, J.

The assignment by Greig to -the plaintiff, of the bond and mortgage in controversy in this action, was a gross fraud. Whether or not the plaintiff can maintain his title to such bond and mortgage, acquired by such fraud, is the question arising on this appeal. At the time of the assignment, the bond and mortgage actually and equitably belonged to the defendant Mary E. Barron, but the assignment to her was not recorded. The statute (2 R. S. 40, § 1, 3d ed.) declares “ that every unrecorded conveyance shall be void as against any subsequent purchaser in good faith and for a valuable consideration of the same real estate, whose conveyance shall be first duly recorded.” The plaintiff’s assignment was first recorded, and section 69 of the statute declares that the term “ purchaser,” as used in that statute, shall be construed to embrace “ every assignee of a mortgage.” The assignment from Greig to the plaintiff purports, upon its face, to have been made “as collateral security for $177.68.” The referee finds, and the proof clearly justified the finding, that $100 in cash was advanced at the time of the assignment, in consideration thereof, and that the $77.68 was for a pre-existing debt of Greig and one Studley to the plaintiff. The referee also finds that the plaintiff made the advance and took the assignment in good faith and without notice of any other claim to the bond and mortgage; and this finding on this question of fact is fully warranted by the evidence. The plaintiff, therefore, has an assignment of this bond and mortgage in due form from the apparent owner, as appeared from the record, together with the possession of the bond and mortgage itself, and is a subsequent purchaser in good faith, for a valuable consideration, and his conveyance is first recorded. His title to the bond and mortgage is therefore perfect under the statute.

But the plaintiff is not a bona fide purchaser, except as to the $100, advanced at the time of the assignment, go far as relates to the $77.68, that was a past consideration, and the equity of Mrs. Barron is superior to his. To constitute a bona fide purchaser within the meaning of the recording acts, the party receiving the subsequent conveyance must not only have received the same without notice of the prior unrecorded deed, "blit he must have received the same upon some new consideration advanced at the time, or must have relinquished some security for a pre-existing debt due him. (Dickerson v. Tillinghast, 4 Paige, 222. Stuart v. Kissam, 2 Barb. 493. Wood v. Chapin, 3 Kern. 509.)

And when a party has obtained the legal title, if he has paid but a part of the consideration or value of the property, he is entitled to be considered a bona fide purchaser pro tanto. (Peabody v. Fenton, 3 Barb. Ch. 498. Stalker v. McDonald, 6 Hill, 96.) The case last cited, it is true, was the case of a promissory note. But the analogy between the case of a person claiming the rights of a bona fide holder of negotiable paper and a person claiming to be a subsequent purchaser for a valuable consideration, under the recording acts, is quite perfect, and there is no reason why the rule of law should not apply to them alike.

So far as the plaintiff took this bond and mortgage as a security for the debt of Gfreig and Studley, he is in no. worse condition than he was before, and his equity is not superior .to that of Mrs. Barron. Her prior equitable title and rights should prevail, except so far as the protection of the statute in express terms extends to the plaintiff as “a subsequent purchaser in good faith and for a valuable considerationthat iST'gtrfar as a new consideration was presently paid or advanced in consideration of the transfer of such bond and mortgage. The referee therefore erred, so far as he directs judgment for the plaintiff for all of the plaintiff’s claim exceeding $100 and interest.thereon; and the judgment is so far erroneous. I am by no means sure that the assignment of the mortgage to Mrs. Barron did not merge the equitable into the legal estate so that nothing of interest in the mortgage remained capable of assignment to the plaintiff. But as this point was not raised before the referee, or considered by him, or particularly discussed here, I do not think it proper for the court now to pass upon that question. I think there should be a new trial, and as neither party has entirely succeeded, neither party should have costs of the appeal.

[Cayuga General Term, June 7, 1859.

T. R. Strong, Johnson and Smith, Justices.]

New trial granted.