| New York Court of Chancery | Jun 29, 1844
Where a mortgagee whose mortgage is a lien on several parcels of land, which were subsequently conveyed to different purchasers, releases from the lien of his mortgage,- the parcel last conveyed, without any notice either actual or constructive, that the other parcels had been previously sold by the mortgagor; he does not thereby discharge the parcels not released. (Patty v. Pease, 8 Paige’s R. 277.) The right to have the lands which have been sold by the mortgagor charged in the inverse order of their alienation, is not a legal, but an equitable right, and is governed by the principles applicable to the relation of sureties. And the conscience of the mortgagee is not affected, unless he is informed of the existence of the facts upon which this equitable right depends, or has sufficient notice of the probable existence of the right to make it his duty to inquire in order to ascertain whether it exists. (Guion v. Knapp, 6 Paige’s R. 42-3, per Walworth, Chancellor.)
The same principle was held by Chancellor Kent in Cheesebrough v. Millard, (1 J. C. R. 414.) And see Neimcewicz v. Gahn, (3 Paige Ch., 614" court="None" date_filed="1831-10-22" href="https://app.midpage.ai/document/neimcewicz-v-gahn-5548012?utm_source=webapp" opinion_id="5548012">3 Paige, 614; S. C. on appeal, 11 Wend. 312.)
To apply these principles to the case under consideration.
First, So far as Nicholas W. Stuyvesant, the first mortgagee, or his executors, had actual notice of the rights and interests of the parties, there was certainly nothing to prevent the
In the first instance, the mortgagor owned the whole.
It appears by the proceedings in this court instituted by N. W. Stuyvesant in May, 1829, to foreclose his mortgage, that he had then been informed of the conveyance of the whole mortgaged premises by the mortgagor to Thomas H. Smith, and by the latter to Mr. Anthon in trust for the security of John Hone & Sons; and that George W. Bruen was a party with T. H. Smith in the execution of the trust deed.
G. W. Bruen was made a defendant in Mr. Stuyvesant’s bill in 1829, as having an interest in the premises; and it appears by some of the documents read in evidence, that he was the executor of Thomas H.- Smith.
The release executed by S'tuyvesant’s executors, was given at the request of George W. Bruen, who had paid the interest in 1837.
Therefore upon the facts known to the mortgagee and his representatives, or of which they, or either of them, had information, at or before the time of executing the release; they had a right to suppose that the whole mortgaged premises were at that time vested in Mr. Anthon for the benefit of the Hone’s, or that they had reverted to the estate of Thomas H. Smith. The request of Bruen to release to Thorne was consistent with the latter.
On either supposition, their release of a part of the lots mortgaged could work no injury or injustice to'any one.
If they had foreclosed their mortgage under the statute, they •could have sold first, from the east end of the block, the west end, or the middle, as their own judgment or fancy dictated. And on the state of the case as actually disclosed to them, they could in like manner, release any portion of the lots, from the lien of their mortgage.
Second. The next inquiry is, had the executors of Stuyvesant any constructive notice of the rights of John Hone’s executors, which rendered their release inequitable, or which subjects them to account for the value of the lots discharged from the mortgage.
2. The bill filed by Mr. Anthon to subject the premises to the payment of the debt of John Hone &. Sons, did not affect Stuyvesant’s executors. They were not parties to the suit, and no notice of the pendency of the suit was filed in pursuance of the statute. Whether such a notice would have affected the executors, if it had been filed, I do not determine here. The force of the lis pendens, aside from the statute, will be discussed in another place.
3. The next point in the order of time, is the effect of the recording of the deed from the master to William H. Thorne, and the mortgage of the 24 lots executed to the executors of John Hone by Thorne, on his purchase at the sale under Mr. Anthon’s decree.
The defendants insist that after the mortgage of Thorne was recorded, it was not competent for him to shift the Stuyvesant mortgage from the whole block, to the fourteen lots in question. The mortgagee has nothing to do with this proposition, unless the record was constructive notice to him.
Notice by the recording or registry of conveyances is created by the statutes, and its effect is to be learned from their provisions, and the adjudications thereon. The statute in force in 1837, (1 R. S. 756, § 1,) enacts that every conveyance not recorded shall be void as against any subsequent purchaser in good faith, <fcc., whose conveyance shall first be recorded.
Neither the provision itself, or the objects of a registry law, have any reference to prior incumbrances already recorded. The effect of recording a conveyance is not retrospective, nor was it designed to change rights already vested and secured by a recorded deed or mortgage. It simply protects a purchaser who takes the precaution to search the records, and record his own conveyance, against prior unrecorded conveyances of which he had no notice. A mortgage is not made more effectual as a lien by being recorded; nor is its record any more notice to subsequent purchasers, than is the docket of a judgment regularly entered, so as to become a lien upon real estate. And there is no reason for holding that the recording of a subsequent
An expression of the Chancellor’s in the case of Guion v. Knapp, (6 Paige’s R. 42,) was relied upon to establish that the recording the mortgagor’s subsequent deed would be notice to the mortgagee. The Chancellor there alludes to the omission of the grantees to record their deeds, but he does not say that the mere recording of them would have constituted notice. I defended Guion v. Knapp, for Burdick, one of the defendants, and I remember that the deed from the mortgagors to Crandall which was read at the hearing, was recorded about the time it was executed. This fact is not mentioned in the report of the case, and the Chancellor does not refer to it in his opinion, although he exonerated from the mortgage the lands held under the deed to Crandall. I am confident therefore that he did not mean to express an opinion that the recording of the deed would per se be notice of its execution to the prior mortgagees.
No case has come under my observation which holds such a doctrine. It is clear that the prior mortgagee on thus releasing, acquires no new interest. He is not a purchaser, and does not fall within the purview of the recording acts. Concurring with my own judgment, I find the point decided by my learned predecessor in the case of Talmage, President of the N. A. Trust and Banking Co. v. N. Wilgers, T. T. Sherwood and others, reported in 1 N. Y. Legal Observer, 42. He there held that a mortgagee, prior to executing a release of a portion of the mortgaged premises, is not bound to search the records as to any conveyances by the mortgagor subsequent to his own mortgage; and that the record of such conveyances was not
In this case, the executors of Stuyvesant were not constructively notified by the recording of the deed to Thorne or the mortgage from him to the executors of Hone.
4. It is claimed by the' éxecutors ánd heirs of Mr. Hone, that the pendency of the suit for the foreclosure of Thorne’s mortgage was constructive notice of their rights, to Stuyvesant’s executors, and had the effect of keeping the premises in the same condition they were in at the time of the filing of the bill.
The notice prescribed by the statute, was filed on this foreclosure, but the executors of Stuyvesant were not made parties.
I do not perceive that the pendency of that suit in any manner affected those executors.
The statute was not designed to establish constructive notice by a lis pendens, but it was enacted to abridge the existing equitable principle on that subject. Hence it does not aid the defendant’s proposition.
The principle itself is applicable only to those who derive their title or claim to the property,' from a party to the suit respecting it, while the suit is proceeding. The pendency of the suit between Hone’s executors and Thorne,- was not notice to the executors of Stuyvesant, who had title to the whole subject matter paramount to the rights of both. The suit affected subsequent purchasers from Thorne, not incumbrancers prior to Hone’s original purchase.
Before the release, Stuyvesant’s executors held the whole number of lots and each individual lot for their debt. By the release, they restricted' their right to fourteen of the 56 lots, and relinquished their lien upon the others; There was no purchase, no new incumbrance. Each of the fourteen lots was liable for the whole debt'before, and'they continued liable for it still.
As to the equity of the parties before me, it is said that Stuyvesant’s executors ought to have inquired into the situation of the property before releasing, and that it is strange that
Before Mr. Hone’s executors complain of the release, they ought to show that they have not been remiss on their part. They knew perfectly well that Mr.- Stuyvesant understood their rights as they were in 1829. They appear to have had no reason to suppose that he or his representatives were apprised of any alteration in those rights. If they effected a change in their interests, which essentially altered their relative position towards the mortgage held by Stuyvesant, it was their duty to have informed him of it. Having omitted-to notify him of the change, it would be unreasonable for them to complain because he or his executors have acted as if no change had occurred.
The Chancellor says, in Guion v. Knapp, “ If, therefore, the prior purchasers are so negligent as to leave the holder of the incumbrance to deal with the mortgagor, or with a subsequent grantee of a portion of the premises, under the erroneous supposition that the lands conveyed to the prior purchasers still belong to the mortgagor, the mortgagee will not lose his lien by executing a release to one who happens to be a subsequent grantee.”
Third. It is said that the release was fraudulent, and that the complainant must amend her bill so as to bring in the owners of the premises released,, and subject them to contribution.
There is no pretence for asserting- that the mortgagees participated in the alleged fraud. And if the defendants supposed that Thorne or Bruen acted in fraud of their rights, and ought to contribute to the payment of the mortgage, their remedy was against- those parties,, and-not against- the complainant.-
This argument is advanced upon the authority of Stevens v. Cooper, (1 J. C. R. 425.) The case is not very clearly stated, but it is apparent that Cooper, the mortgagee, had notice of Stevens having purchased the Camillus lot, before he released the four lots subsequently sold by the mortgagor. This fact, of itself, would exonerate the Camillus lot at least to the full extent which was accomplished by the decree in that case, on the well settled principles of equity which were applied in Guion v. Knapp, and the decision proceeds upon the ground that the several lots were owned by different persons subject to pay the mortgage rateably, whose rights were known to the mortgagee. The absence of notice to Stuyvesant’s executors renders this case wholly unlike Stevens v. Cooper, in its controlling and decisive feature.
In the case of Parkman v. Welch, (19 Pick. 231,) also cited by the defendants,- the holder of the mortgage knew of the rights of the parties when he released. That suffices to distinguish it from this case, although it might be observed that in this state, under like circumstances, equity would apply the principle of subjecting the premises in the inverse order of alienation, rather than that of contribution.
The complainant is entitled to the usual decree.