Gulf Refining Co. v. Camp Curtin Trust Co.

Opinion by Mr. Justice Stern, Moses Karmatz, in 1924, executed and delivered to defendant a mortgage of $4,800 covering two properties in Dauphin County, one situate in the Seventh Ward of the City of Harrisburg and the other in the Borough of Steelton. In 1927 he executed and delivered to defendant another mortgage of $5,000 which covered only the Harrisburg property. In 1929 he sold and conveyed the latter property to plaintiff, the purchase price being $19,000. Of this amount plaintiff gave to defendant $4,618.75, which was the sum' then required to satisfy the second or $5,000 mortgage on the property, and also $901.80 in payment of a note held by defendant against Karmatz; the remainder of the purchase price, after satisfaction of various judgment and tax liens on the property, was paid by plaintiff to Karmatz. Plaintiff was not aware of the first or $4,800 mortgage held by defendant, and its existence was ignored at the settlement. Subsequently Karmatz defaulted in the payment of interest on this mortgage, and defendant levied execution on the two properties covered by it. The execution on the Harrisburg property was temporarily stayed; *467 the Steelton property was sold by the sheriff but nothing was realized therefrom except taxes and costs. Plaintiff then filed a bill in equity to restrain defendant from proceeding on the execution against the Harrisburg property, and also to compel defendant to release on the record the lien of the mortgage as to that property. The court below granted the relief prayed for; defendant appeals. The question involved in the case arises in the following manner: Exercising the authority conferred by the Act of May 26, 1891, P. L. 129, the Court of Common Pleas of Dauphin County in 1917 made an order directing that new indices for the books in the recorder’s office should be procured and the indexing done thereafter according to the Russell L. M. N. R. T. System, to be installed in conformity with a certain “Sample B for mortgages” and specifications which had been recommended by a committee of the bar. In addition to the names of mortgagor and mortgagee, and place of record, which were required to be included in the index by the Act of March 18, 1875, P. L. 32, “Sample B” provided for ¡columns in the index setting forth the date of the mortgage, 1 the date of recording, the amount of the mortgage, and the location of the property and “remarks,” the location to be by wards and city or borough and township, unless there were more than three separate locations, in which event only a general reference to the county was required. In the present case, when the $4,800 mortgage was recorded the location of the property was indexed as Steelton, nothing being added to indicate that it covered also the Harrisburg property. This misled the attorneys for plaintiff who searched the title when their client purchased the latter property, with the result that they did not go beyond the indices and examine the record of the mortgage itself. *468 The court below held that because of this defective indexing plaintiff was not bound by constructive notice of the $4,800 mortgage, and took title free and clear of its lien. In our opinion this was error. The court misapprehended the scope and purport of the Act of 1891. That act provided: “That the court of common pleas of the proper county is hereby authorized and empowered, whenever it shall appear advisable on inspection of the books of records and indices belonging to the several offices of prothonotary and clerks of the several courts, register of wills and recorder of deeds of such counties, by its order to change and alter the mode of preparing and keeping said indices in one or more of said offices and to direct the mode in which said indices shall thereafter be prepared and kept.” Section 2 authorized the court to direct “new indices” to be prepared of all or any part of those theretofore prepared and kept in any of these offices. This act cannot be interpreted to mean that the courts of the several counties were thereby invested with the power to establish indices containing data additional to that required by existing legislation with the legal effect that, if such additional data were omitted or erroneously stated, the record would not carry constructive notice to persons who otherwise would be bound thereby. Indeed, if the Act of 1891 were to be construed as vesting such power in the courts, its validity might be questionable as constituting a delegation of legislative power in violation of Article II, section 1, of the Constitution. All that it apparently was intended to accomplish was to give to the courts of the various counties the right to prescribe the mechanics of the system of recording, — to allow the counties to adopt new and improved methods for indexing the records, as, for illustration, by providing for a more detailed classification in the alphabetical arrangement of the indices. The act did not vest in the courts the right to make substantive changes in or additions to the recording statutes. If an order of the court *469 provided, for example, that the indices should furnish a physical description of the grantor and grantee, mortgagor and mortgagee, or other identifying data with regard to them, such an order would not write these additional requirements into the recording laws so that the record would he invalidated if the information thus supplied by the index happened to prove erroneous. Nor did the Act of April 23, 1903, P. L. 267, (which provided that the “new indices” to the records contained in the offices of the several county officers of the Commonwealth prepared in accordance with the' Act of 1891 should be notice to all persons of the contents of such papers) extend the scope of the recording acts to the in-dices regardless of what they might include under the order of the county court. The phrase “new indices” in the Act of 1903 apparently refers only to those prepared under section 2 of the Act of 1891 to replace theretofore existing indices, and not generally to a new mode of keeping the indices as provided in section 1 of that act, the purpose of the Act of 1903 being to give the same legal status to the substitutionary indices as that of the old ones which they replaced. There was no need to make similar provision for the current indices kept under a new method, because they would be covered by section 3 of the Act of March 18, 1875, P. L. 32, 2 being only a continuation of the existing system with merely a new form of adaptation or arrangement. If, however, the Act of 1903 was meant to cover also the current indices kept under a new system ordered by the court, there is nothing in its terms to indicate a legislative intent that such indices should furnish any information as to the record beyond that required by the Act of 1875, or that if such additional information were furnished it should be binding upon the person whose title was involved. *470 The court is of opinion, therefore, that whereas the “mortgagor,” “mortgagee,” and “where recorded” columns of the indices provided by the Act of 1875 contain data which have the effect of constructive notice, any additional information prescribed by the county courts under the Act of 1891, such as, in the present case, the “location and remarks” column, can be deemed to be furnished only by way of assistance or convenience to the searcher of the records, but not as constituting constructive notice, or impairing substantive rights because of omission or defective statement. Plaintiff contends that, apart from the question of the index to the record, the operation of the principle of estoppel entitles it to the relief sought. This claim is based upon the fact that prior to making settlement for the property plaintiff’s attorneys notified defendant that it was being purchased, and inquired as to the balance due on the $5,000 mortgage. During the course of the conversations which ensued plaintiff’s attorneys told defendant they were “not interested” in paying any obligations of Karmatz except claims of record which would be liens against the property, but nothing was said by defendant to call plaintiff’s attention to the existence of the $4,800 mortgage. Without discussing the question whether plaintiff revealed the exact situation to defendant so that ordinarily there would have been imposed upon defendant a duty to speak, it is sufficient to point out that the principle of estoppel by mere silence does not apply where an instrument of title has been recorded so as to fasten constructive notice upon the other party: Crest v. Jack, 3 Watts 238, 240; Goundie v. Northampton Water Co., 7 Pa. 233, 239; Knouff v. Thompson, 16 Pa. 357, 363, 364; Hill v. Epley, 31 Pa. 331, 335; 10 R. C. L. 693, 694; Bispham’s Principles of Equity (11th ed.), § 261, where it is said: “But silence will not always work an estoppel, for silence may not always be inequitable, and, moreover, a person is not bound under all circumstances to speak out. He may not, for ex *471 ample, be bound to declare that which is a matter of record, and of which he has a right to presume the other party has notice.” Since it has been here decided that the record of the mortgage did constitute constructive notice notwithstanding the defective statement in the index as to the location of the mortgaged property, the doctrine of estoppel cannot be successfully invoked. The decree of the court below is reversed, and the bill is dismissed; costs to be paid by appellee. Footnotes [1] As actually prepared and in use, the indices in Dauphin County do not provide for the date of the mortgage. [2] Section 3 provides that “The entry of recorded deeds and mortgages in said indexes, respectively, shall he notice to all persons of the recording of the same.”