182 N.Y. 387 | NY | 1905
The action was brought to foreclose a mortgage held by the plaintiff on certain real estate situate in the city of Syracuse. No defense was interposed to the plaintiff's claim, but two of the defendants, each claiming to be the holder of a mortgage on the land subsequent to that of the plaintiff, sought to have their respective titles adjudicated in the action. No question has been made as to their right to inject such an issue into the suit, and we shall raise none, though it may be doubted whether the plaintiff should have been delayed in the enforcement of its claim to await the settlement of a dispute in which it had no interest. The facts out of which the controversy arose are as follows: The owners of the property, subject to the plaintiff's mortgage, executed on August 2, 1895, a bond and mortgage to one Warner to secure the sum of $8,398.92, borrowed from him, which last mortgage covered the premises in suit and others. On the same day Warner, to secure payment of a loan of $3,500, executed and delivered to the appellants' testator, Tolman, an assignment of said bond and mortgage. At the same time Warner delivered the bond to Tolman but retained possession of the mortgage. The assignment to Tolman was not recorded until November 12th, 1902. On May 16th, 1900, Warner assigned for value said bond and mortgage with others to the respondent, the Salt Springs Bank, which assignment was recorded on May 20th, 1901. Warner delivered to the respondent the mortgage but not the bond, which which was in the possession of Tolman. The trial court found that the respondent had no actual notice of the assignment to Tolman and took its assignment in good faith and for value; that while the respondent did not receive the bond, it made due and diligent inquiry as to the rights of other persons to the bond and mortgage, and did not discover that the *390 defendant Warner had not full right to assign the same. On these facts the trial court awarded the bond and mortgage to the bank. That judgment has been affirmed by the Appellate Division by a divided court. From that judgment this appeal was taken.
The appellants contend that the Recording Act, on the strength of whose provisions title to the bond and mortgage has been awarded to the respondents, does not apply to the present case or affect the rights of the prior assignee of a bond and mortgage whose assignment is not recorded as against a subsequent assignee who records his assignment. It has been decided that an assignment of a mortgage is a conveyance of real estate within the meaning of the Recording Act. (Westbrook v. Gleason,
As already stated, the learned trial court found as a fact that the respondent made due and diligent inquiry; that it had no notice of the rights of Tolman to the bond and mortgage, nor was it able to discover the same. As the decision of the Appellate Division was not unanimous the finding is open to examination by this court and we are of opinion that there is no evidence to sustain it. The failure of Warner to produce the bond at the time of the assignment was sufficient to put the respondent on inquiry and if unexplained to operate as notice of the defect in Warner's title. (Brown v. Blydenburgh,
The judgment of the Appellate Division and that part of the judgment of the Special Term appealed from should be reversed and a new trial granted, costs to abide the event.
GRAY, O'BRIEN, BARTLETT, HAIGHT, VANN and WERNER, JJ., concur.
Judgment reversed, etc.