Woodworth v. Guzman

By the Court, Bennett, J. The question in this case is as to priority of lien upon land. The plaintiffs had a mortgage on the premises in question. Guzman desired to borrow $7,000 of Bynders. The latter was informed of the existence of the plain [205] tiffs’ mortgage, but thought the property sufficient security, and said that he was willing to loan the money, and take a mortgage subject to that of the plaintiffs. Rynders, having knowledge of the existence of the plaintiffs’ mortgage, has no reason to complain that it was not recorded. It is well settled in the states, where statutes requiring mortgages to be recorded are in force, that if a subsequent mortgagee has notice of the existence of a prior unrecorded mortgage, he takes his lien subject to the lien of the first mortgagee. We think the same rule applies under the Mexican system. The object of such laws is to prevent imposition upon subsequent purchasers and mortgagees, in good faith, and without notice of the prior incumbrance; and when they have such notice, to permit their subsequent mortgages to take priority over a previous one, even though unrecorded, would be, not to protect them, but to enable them to impose upon others. Resides, we are not aware that there was any officer in San Francisco, who, according to Mexican law, was authorized to record mortgages; and unless there was, we see not how the authorities cited by the appellant can apply. Rut it is said that the instrument under which the plaintiffs claim, was not a mortgage. Ro particular form of words is necessary to constitute a mortgage, more than any other contact. The receipt of June 17th, and the transfer by Guzman to the plaintiffs must be construed together. Taken in this way, they describe the property, and the amount of indebtedness, and convey the land as security therefor. We think this sufficient to constitute a mortgage. It is also said that the plaintiffs’mortgage does not describe the same premises upon which Rynders’ mortgage was taken. The premises are misdescribed, it is true; but Brannan testifies that that was a mistake committed in the hurry of drawing up the receipt. This mistake a court of equity would correct, of course, as against the mortgagor, so as to make the mortgage conform to the intention of the parties ; and Rynders, having had notice that the lien of the plaintiffs was upon the identical lot on which [206] lie took his mortgage, is in no better condition than Guzman the •mortgagor. We think the judgment should be affirmed. Ordered accordingly.