Ledyard v. Butler

The Chancellor. The equities of the parties are equal in this case; the appellant claiming in opposition to the fraudulent deed, and the respondent being a bona fide mortgagee of the premises conveyed by that deed, without notice of the fraud. The only question therefore, is, which party has the better legal right. On that question I have no doubt as to the correctness of the decision of the vice chancellor. The judgment and proceedings against Giles Butler, subsequent to the deed to his son, could not be constructive notice to a purchaser or mortgagee of the latter. For upon searching the records and finding an absolute conveyance from the father, in July, 1823, the person "who was about to purchase from the son, or to loan money to him upon his bond and mortgage, would not be bound to go further and search the records for the purpose of ascertaining whether subsequent judgments might not have been recovered against the father. The case of Anderson v. Roberts, in the court for the correction of errors, (18 John. Rep. 515,) settles the question, that a bona fide purchaser from a fraudulent grantee is entitled to a preference over a subsequent purchaser under a judgment against the fraudulent grantor. And the supreme court, in Jackson v. Terry, (13 Idem, 471,) decided that under the recording acts the priority of conveyances, as between purchasers deriving title under the fraudulent grantor and the fraudulent grantee respectively, had reference to the recording of such conveyances. And in this case the mortgage to the complainant was executed and put on record several days before the sheriff’s deed to Morss was executed and recorded. The mortgage having been in fact given on the 30th of March for the whole loan of $1300, as agreed for, the fact that a part of the money was not paid for some few days [137] thereafter could not deprive the complainant of the benefit of the security for the whole sum advanced upon the credit of that security. And a mortgagee is a purchaser, to the extent of his interest in the premises, within the meaning of the term purchaser as used in the statute of frauds. (See Chapman v. Emery, Cowp. Rep. 278; White v. Hussey, Prec, in Ch. 13; Gardiner v. Painter, Sel. Cas. in Ch. 65; Cormick v. Trepand, 6 Dow’s Rep. 60; Amb. Rep. 289; 2 Vern. Rep. 272; Poulton v. Wiseman, Noy’s Rep. 105.) The decree appealed from must be affirmed with costs. And the usual direction must be given, that if the premises do not sell for sufficient to satisfy the amount due on the mortgage, with interest and costs, the appellant must pay the value of the use and occupation of the property from the time of his appeal until the delivery of the possession to the purchaser upon the sale, or so much of such value as may be necessary to satisfy such deficiency; as damages for the delay and vexation caused by such appeal.(a) Footnotes [(a)] Affirmed on appeal, December, 1842.