Acer v. Westcott

Present — E. D. Smith, Johnson and J. C. Smith, JJ. By the Court James C. Smith, J. The referee decided that by the true construction of the contract between the plaintiff and Curtiss, the latter was bound to give to the former the mortgage provided for in the contract, concurrently with the re leiving of the deed of the premises, which mortgage should be the next lien to the mortgage to Mrs. Brown. He. also decided, that by the recitals in the deed from Mrs. Brown to Curtiss, the defendant, Westcott, is chargeable with notice of the equitable rights of the plaintiff to such mortgage. The correctness of these rulings is not questioned, so far as they relate to the construction of the contract between Acer and Curtiss, but the appellant’s counsel contends that the referee erred in holding that Westcott is chargeable with notice of Acer’s equitable rights. There is no evidence that Westcott had actual notice, and the inquiry is therefore confined to the point, whether, upon the facts found, he is chargeable with constructive notice, that Acer was equitably entitled to a mortgage on the premises, the lien of which should be superior to Ms own. In the first place, it is clear that Westcott, as the incumbrancer of -Curtiss’ title to the- premises, is chargeable with notice of the contents of the deed from Mrs. Brown, by wMch Curtiss acquired such title. TMs results, from the familiar and well established rule, that a purchaser (and the term includes an incumbrancer) is presumed to have looked to every part of the title, which is essential to its validity. (Brush v. Ware, 15 Pet., 93, 111; West v. Reid, 2 Hare, 249, 260, 261; Jumel v. Jumel, 7 Paige, 591; Briggs v. Palmer, 20 Barb., 392; S. C. on appeal, 20 N. Y., 15, and 21 id., 574.) Indeed, this position is not controverted by the defendant’s counsel, so far as it relates to the deed from Mrs. Brown, [198] by which Curtiss acquired the legal title to the property. That it is equally applicable, in a court of equity, to the assignment from Acer to Curtiss of the equitable title, seems apparent from the following considerations. ^ By the rule above stated, Westcott is chargeable with notice, not only of the deed from Mrs. Brown to Curtiss, but also of its contents, so far as they affect the title to the premises covered by his mortgage. The deed contains a recital in these words: “ This conveyance is made in pursuance .of a contract of sale of said premises, made and entered into by the party of the first part, for a conveyance thereof to one Ezra W. Acer, of whom the said party of the second part has become the assignee or purchaser, and, as such, entitled to a fulfillment thereof, by virtue of this conveyance; said contract being dated, January 29, 1861.” This recital, if Westcott looked at it (and it is to be presumed that he did), informed him that, prior to the execution of that conveyance, Acer, by a contract with Mrs. Brown, had acquired a right in equity to the same title in fee which the deed purported to convey to Curtiss; and that whatever right Curtiss had to such conveyance was by virtue of an assignment or purchase from Acer. Westcott thus knew that, so far as such equitable title was concerned, Curtiss acquired it, not through the deed from Mrs. Brown, but by virtue of a prior purchase or assignment, from Acer of his contract; and as the deed purported on its face to be executed in fulfillment of the contract by which such equitable title was created, he also knew, that unless the purchase or assignment of such contract was valid, Curtiss had no right to the legal title. The contract of sale or assignment from Acer to Curtiss was therefore a direct and important link in the chain of title, and Westcott is presumed to have made himself acquainted with its provisions so far as they affected the title incumbered by his mortgage. By the terms of that contract, Curtiss expressly agreed with Acer to execute a mortgage on the property for $3,380.20, with interest, and to insure the premises for $3,00C payable to Acer to secure the mortgage. [199] The general rule is, that when a purchaser cannot make out a title, but by a deed, which leads him to another fact, he shall be presumed to have knowledge of that fact. (Stan Eq. Jur., vol. 1, p. 428, § 399.) “ Indeed,” says Judge Stoby, “ the doctrine is still broader; for, whatever is sufficient to put a party upon inquiry (that is, whatever has a reasonable certainty as to time, place, circumstances and persons), is, in equity, held to be good notice to bind him.” (Id.) In the present case, the contract was in writing, and each party to it had a duplicate in his hands. The recitals in the deed directed Westcott with certainty to the contract and the parties to it; and as, on inquiry of either of the parties, he could have learned the terms of the contract, he is presumed to have acquired the information which would have resulted from such inquiry. Westcott testified before the referee that he did not know the contract between Acer and Curtiss was in writing; that he supposed it was verbal, and that he also supposed Acer had been paid in full. If he relied on his suppositions in respect to these particulars, instead of making such reasonable inquiry as was in Ms power, he did so at his peril. He was not misled by the recitals in the deed. The deed asserts nothing contrary to the fact that the purchase money from Curtiss to Acer was unpaid, and that Acer was entitled to a mortgage on the property to secure its payment. The doctrine, that a purchaser is presumed to have knowledge of every fact to which he is led by a deed, forming a link in the chain of Ms title, is none the less applicable to the contract between Acer and Curtiss, because such contract transferred a purely equitable interest in the land, and not a legal title. The equity of Acer, as has been said, was a right to a conveyance, which would vest in him the entire estate, legal and equitable. Wife that right resided in Mm, the legal title outstanding was a mere shell. Westcott’s mortgage would have been of but little comparative value as a security, if such equity had not been subjected to its lien. The case is, therefore, fully within the reason of the rule above stated, and Westcott is presumed to have looked at the contract from [200] Acer, because it was essential to the validity of his mortgage, or rather to its sufficiency for the purpose for which it was executed. Westcott being chargeable with notice, his entire mortgage should be postponed to Acer’s equity. It is insisted on his part, however, that in any event, he should be preferred to the extent of the $550; advanced by him to Curtiss, and by the latter paid to Mrs. Brown. That position cannot be maintained, unless Westcott is entitled to be subrogated to the right of Mrs. Brown, to have such sum recovered by a first mortgage. No such right of subrogation exists. Westcott did not deal with Mrs. Brown. He lent the money to' Curtiss for the purpose of enabling him to pay Mrs. Brown, and procure a deed, and upon the express agreement, that Curtiss should execute a mortgage for his security. Curtiss paid, and extinguished the $550 claim. None of the parties intended that the claim should be transferred or kept alive. It being extinguished, Acer’s equity is the first lien remaining. The judgment should be affirmed with costs. Judgment affirmed. .