Newman v. Chapman
Newman v. Chapman
Opinion of the Court
delivered the following • opinion:
The object of the statute requiring mortgages to be recorded, and declaring that, if not recorded as the statute prescribes, they shall be void as to creditors and subsequent purchasers, was to prevent, by affording the means of ascertaining the existence of the incumbrance, the frauds which might otherwise be practised by the mortgagor and mortgagee, on creditors and subsequent purchasers, by concealing it. If a purchaser has actual notice otherwise, of the existence of the mortgage, he is not only not prejudiced by the failure to record it, but is himself guilty of a fraud in attempting to avail himself of the letter of the statute, to the prejudice of another who has a just claim against the property. The statute, indeed, vests in the subsequent purchaser, in that case, the legal title; yet, although the legal title of the mortgagee is divested by the subsequent conveyance, his equitable right to subject the property to the payment of the debt, remains; not only because the mortgage is good between the parties; but, even if void as a conveyance between the parties, it would still be evidence of an agreement between them, and a Court of Equity will give effect to the equity of the mortgagee, by holding the subsequent purchaser to be a trustee. Upon these principles, the Court of Chancery in England has always relieved a prior purchaser, whose deed has not been registered, against a subsequent purchaser with notice.
I had at one time great doubts, whether the principle of those decisions did not apply to the case of a lis pendens. Lord Hardwicke, in the leading case of Le Neve v. Le Neve, 3 Atk. 646, declared, that the statutes of registry in England (which, as to the matter under consideration, are the same in effect as our statute,) only vested the legal title in the subsequent purchaser, and left the case “open to all equityand, in that case, he relieved against a sub
I think that the statute over-rules this principle of law, in the case of a life pendente purchaser, after an unrecorded mortgage. The decisions in the cases of notice, are according to the policy and spirit of the statutes; since, in those cases, the purchaser has the very benefit which the law intended to provide for him, and he is chargeable with mala fides, in attempting to acquire that to which he knows another has a just right. He cannot complain, that the mortgagee has done him an injury by his default in failing to record his mortgage, as the law requires. But, if the purchaser were held to be affected by the pendency of a suit, if he had not actual notice, he would suffer an injury by the default of the mortgagee, unless it were held to be his duty to enquire if any suit were depending, when he had no reason to suspect that there was. any defect in the title. I think, that to require him to look to any other source of information than that which the statute has provided for him, would be contrary to the spirit and policy, and letter of the statute.
It follows, that the decree is emmeous, as it respects the 151 acres conveyed to the appellant in September, 1797; but, as to the 513 acres, which the appellant states
If the rule be, that a purchaser, pending the suit, is bound by the decree in the suit as the defendant is bound, then it is too late now to urge the first of these objections. It might, possibly, have been urged by Armisiead, whilst the suit was depending. But, failing to do so, he was bound by the decree, whether it were right or wrong. I think, however, that the objection could not have been relied on with effect, in the original suit. The power of attorney, by authorising the attorney to dispose of the mortgage, for and in the name of Morehouse, authorised him to convey the legal title, and that was the effect of the deed to Simms. The power of attorney being attested by only two witnesses, was not, for that cause, defective. The law does not require any particular form, as to the attestation of a power of attorney to convey land: as, between the parties, such a power may be proved by any evidence, which would be sufficient to prove any other fact in a Court of Justice. A Court of Equity always has jurisdiction to carry into effect its own decrees. In this ease, a bill for that purpose was necessary; as well, because
I do not think, that Armistead could hold a-possession adverse to Morehouse or his assignee, and consequently the conveyances of Morehouse and Simms passed the title they professed to pass, unless the sale to Newman varied the case; but, that sale being made pending the suit, Newmftn could no more hold an adversary possession, unless he had taken a conveyance without notice, ■ than Armistead himself could. Armistead was a tenant at will, and so was Newman, standing in his place.
The account of rents and profits might as well be taken by a commissioner, as ascertained by a jury; and the former is the most usual course.
I am of opinion, that the Chancellor erred in his decree, in directing the appellant to deliver possession of the tract of 151 acres, conveyed by William
The bill claims to set up a mortgage, executed by the aforesaid William Jlr mislead, of anterior date to the above conveyance; but which was never recorded, purely on the ground, that at the time of the purchase by the appellant, there was a suit pending to foreclose the mortgage.
If the act of Assembly in regard to mortgages not re- ‘ corded, and which was in force at the time this bill was filed, is to bo construed in connection with the previous clause in relation to other conveyances, so as to transpose the words from the one to the other, in relation to notice, and thus to make the law precisely what it now is, under the act of 1819; let us enquire how the appellee would have stood in a Court of Law, on a special verdict, finding simply the mortgage and subsequent conveyance, and a suit pending to foreclose the mortgage at the time of the conveyance ?
The case for him would rest on an unrecorded mortgage against a subsequent conveyance, and which is expressly declared by the act to be void as to such subsequent purchaser, not having notice thereof. What sort of notice ? Undoubtedly, such as would affect the conscience of the purchaser; otherwise, the act would be no safeguard to the innocent, as it was intended to be. A mere lis pen-dens is not such notice as that. This has been decided, as will be seen in a case mentioned in a note to the case of Le Neve v. Le Neve; and, also, as I am told, in a late case which I have not examined, reported in 19 Vesey. A Court of Law could not substitute any other kind of notice for that contemplated by the act. But, if the party has ground for coming into equity, that Court, too, I presume, must follow the law.
But if, previous to the act of 1819, the mortgagee of an unrecorded mortgage stood, as against a subsequent purchaser, as he did in England under the registry acts, (and I incline to think he did,) then his only remedy was in.
Suppose, in this case, the appellant had not denied notice, no charge of notice being in the bill, but had simply answered, that he had purchased for value, and got his deed, exhibiting it with his answer, and had demurred to the residue of the bill. Could the appellee have succeeded ? I apprehend not. Or, would not such an answer have been a full response to the bill, no fraud or notice being charged, and sufficient of itself to defeat the claim of the appellee ? Iam much inclined to think it would; and, therefore, had the appellant exhibited a deed from William Jirmistcad to John B. Jlrmistead, and from the latter to him for the 513 acres mentioned in the argument, although there is no denial of notice as to it, I should, as at present advised, have thought that the appellee could not have recovered that tract, without amending his bill, and putting the fact of notice or fraud in issue; so as to give the appellant an opportunity of answering thereto. It is, however, not necessary to decide this point, because the appellant does not shew himself to be a subsequent purchaser nf that tract, and it is only against such that the mortgage is void.
Whether, as this is an interlocutory decree, he may hereafter be permitted to file those documents, if they exist, is not for me to know or anticipate. On the record, now before the Court, the decree must be reversed as to the 151 acres, and affirmed as to the residue.
Judge Bkooke, concurred: and a decree was entered conformable to the foregoing principles.
The following were the eases referred to by Judge Gheeit, in the course of his opinion: Durbaine v. Knight, 1 Vern. 318; Preston v. Tubbin, Ibid. 286; 15 Vin. Abr. 128, pl. 2; Birch v. Wade, Ves. & Beam. 200; Murray v. Ballow, 1 Johns. Ch. Cas.; Littleberry’s Case, 5 Rep. 476; Cro. James, 340; 2 Eq. Ca. Abr. 482; Ib. 685; 3 Ves. 485; 1 Eq. Ca. Abr. 358; Bennet v. Batchelor, 1 Ves. jun. 64; Habergham v. Vincent, Ibid, 68; 3 Atk. 243; Shannon v. Bradstreet, 1 Sch. and Lefr. 66; Brace v. Duchess of Marlborough, 2 P. W. 491; 2 Vent. 337; Brotherton v. Hatt, 3 Vern. 574 ; 2 Eq. Ca. Abr. 594; Bac. Abr. tit. Fraud, letter C; Gooch’s Case, 5 Co. Rep. 80. 1 Fonb. Eq. 279; Curtis v. Perry, 6 Ves. 745; Davis v. Earl of Strathmore, 16 Ves, 419; Wyatt v. Barnett, 19 Ves. 439.
Judge Cabell, absent from indisposition.
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