Mutual Life Insurance v. Wilcox

Pratt, J. My first impression was that the plaintiff had constructive notice of the title of the defendant, the village of Middletown, at the time it took the assignment of the mortgage in suit; biit, upon a more careful examination of the case, I am constrained to hold that such a view is not correct. Both the warrantee deeds referred to, from which it is claimed notice to the plaintiff must be inferred, are subsequent to the mortgage, and they contain no recitals inconsistent with the title of the mortgagee. The general rule is, that where the possessor of land causes the registry of a particular title a subsequent purchaser need not look beyond it (4 Kent's Com., 203; sec. 179, notes). The plaintiff, therefore, had a right to assume, since defendant had put his deed on record, that he had recorded all the conveyances of said premises affecting his title thereto. Was the possession of the land in question of such a character as to put the purchaser of the inortgage upon inquiry? I think not. The possession was in no way inconsistent with the rights of the mortgagee. [49] The village of Middletown must be presumed to have entered into possession under its deed, which was dated long after the mortgage, and the purchaser of the mortgage, in the absence of any record to the contrary, had a right to assume that such possession was subordinate to the rights of the mortgagee. The rule of constructive notice by possession does not apply to the assignee of a prior mortgage, because the natural inference in such a case, is, that the occupant is holding subject to the mortgagee (64 N. Y., 76; 20 N. Y, 400; 23 N. Y., 253). I am also of opinion that the release to the defendant Conk-ling was a “ conveyance of real estate ” under the recording act. This view is sustained by the opinion of Talcott, J., in the case of St. John v. Spaulding (1 T. & C., 483), and I find no case in which that doctrine is overruled (See sec. 38, Recording Act). It is equally clear, upon authority, that the plaintiff was a “ subsequent purchaser ” of the same real estate, as defined by the same act (see. 37; 46 Barb., 389., 64 N. Y., 22; 1 T. & C., supra). The proof shows that the plaintiff and its assignee purchased the mortgage in good faith and for a valuable consideration, and without any notice, actual or constructive, of the release to defendant Conkling, and the assignment to each had been duly recorded prior to the recording of the release. It follows, therefore, that the latter instrument is void as against this plaintiff. It is true, as • urged by defendant’s counsel, that the plaintiff took the mortgage subject to aE latent equities existing in favor of the mortgagor, and also of third parties (Trustees v. Wheeler, 61 N. Y., 88). But this general rule relates only to those equities which are not within the scope of the recording act, and against which subsequent purchasers, bona fide, are thereby protected. For example, if the plaintiff had purchased the mortgage in question, without notice of any payment thereon, it could not [50] be foreclosed for more than the amount actually due, and it is permitted to have the entire premises sold in satisfaction of the amount unpaid, simply because the recording act makes the release given to discharge the lien, or a portion thereof, void under the facts in this case. There are some other questions involved but it is not necessary to advert to them, as the foregoing views, if correct, are decisive. It is with much hesitation and reluctance that I have concluded to dissent from the views of the justice, as quoted by defendant’s counsel, who decided the motion “to vacate the sale and to permit Oonkling to defend ” but, after a consideration of all the authorities referred to, and contrary to my first impression, I am led to believe that neither upon principle or authority, can the release referred to in any wise affect the title of the plaintiff to the land in dispute. In no event, if it be true that the release in question was delivered by Oonkling to the village of Middletown with the deed, can Oonkling be called upon to make good his covenant of warrantee to said village, and hence he 'has no equity upon which to base his claim to interfere in this suit. The plaintiff is, therefore, entitled to a decree declaring the release void as against it, and for a resale of the premises, and for costs against defendant Oonkling.