Parke v. Neeley

Mr. Justice Sterrett delivered the opinion of the court, The contention of the plaintiff in error is that the mortgage, on which the scire facias in this case issued, was divested by the sheriff’s sale, at which be became purchaser of the mortgaged premises. It is conceded that the mortgage, as expressed on its face, was given to secure purchase-money, and if recorded within sixty days from the execution thereof, was undoubtedly the'first lien on the land, and consequently not divested by the sale, unless its date raises a conclusive presumption as to the time of its execution. On the other hand, if not recorded in time, the mechanics’ liens, although subsequently entered, were first in order, because they related back to the commencement of th.e building and attached to the equitable interest which the mortgagor had acquired before the conveyance of the legal title. The deed and mortgage were dated January 1st 1876, and the latter was not recorded until the sixty-second day thereafter. In the absence of proof to the contrary, the presumption would be that they were executed and exchanged on the day they bear date. Assuming this to be so, the mortgage thus having lost its priority, was postponed to the mechanics’ liens, and consequently divested by the sheriff’s sale under the subsequent judgment. It was clearly shown, however, that the deed and mortgage were both executed after their date and within sixty days of the time the latter was recorded. This being established, it was [58] held that the mortgage continued to be the first lien, and was not divested by the sheriff’s sale. The introduction of parol evidence to prove the actual date of execution, and the legal effect given to it by the court form the sole grounds of exception on the part of the plaintiff in error. He contends that his rights as a purchaser at the judicial sale are to be determined by the proper record of liens and by what appeared on the registry of the mortgage at the time of the sale and not by what was proved aliunde, as to the time it was in fact executed; in other words, that as to time, the date of the mortgage must be conclusively taken to be the date or time of its execution, and that parol evidence is not admissible to show that in point of fact it was subsequently executed and delivered. The exceptions relied on by the plaintiff in error resolve themselves substantially into two questions of law; the legal effect of what the records of the- court, and the registry of the mortgage exhibited at the time of the sheriff’s sale, and the question of estoppel. The mechanics’ claims filed May 8th 1876, and subsequently, might be resorted to by the purchaser for the purpose of ascertaining when the liens were filed, and how far back they related. This, in connection with information derived aliunde, would probably inform him that these liens attached to the equitable interest of the mortgagors before the legal title was acquired. So far as the record of these claims was concerned he might rely implicitly on what was there represented. Like all judicial records, made up, potentially, if not actually, under the eye of the court, the proper averments of record inported verity, and might be taken as his guide in bidding at the sheriff’s sale: Hopkins’s Appeal, 34 Leg. Int. 250. As a general rule, a purchaser is not bound to look beyond the judgment docket for liens that should there appear: Coyne v. Souther, 11 P. F. Smith 457. It is different, however, with the registry of deeds and mortgages. The chief object of recording them is to give actual as well as constructive notice to everybody of title and encumbrances thereon; and, apart from notice, the only effect given to recorded instruments by the statute is to make certified copies thereof evidence, and in case of mortgages, to provide that they shall not be liens until left for record, except mortgages for purchase-money, which continue to be liens from the date of their execution, if recorded within sixty days thereafter. In Cake’s Appeal, 11 Harris 186, the record of the mortgage did not exhibit it as a first lien. It was for purchase-money, but the conveyance was dated several months before its entry. Judgments had been obtained against the equitable title, and from the face of the record appeared to have closed in upon the legal estate, ahead of the mortgage ; and yet upon proof that the deed had been antedated, and the mortgage recorded within sixty days from the time it was actually executed and delivered, it was held that the lien of mortgage was not divested, but that it still bound the land in the hands of [59] the purchaser. The question in that case arose on distribution of the proceeds of sale, but that is unimportant, for after refusing to permit the mortgagee to participate in the proceeds and turning him over to the land, it would come with bad grace to say that the purchaser might refuse payment and remit him to the proceeds. While it is true, as a general rule, according to Megaw v. Garrett, 11 Casey 322, and other cases, that a purchaser need not look beyond the record for liens and encumbrances, it is not universally so. There are several exceptions, and in some of them the safety of purchasers is not consulted. Generally the record furnishes no notice of mechanics’ liens until they have run for a considerable time. The existence of a purchase-money mortgage may appear at any time within sixty days after its execution, and it is not necessary even then to. disclose on its face the material fact that it is for purchase-money,. nor the time when it was executed, without which knowledge the purchaser can form no reliable judgment respecting the liens. Guthrie v. Watson is a case in which a person, after acquiring an equitable interest in the land, confessed a judgment, and months afterwards accepted a conveyance of the legal title. The record did pot show that the judgment was a lien on the land thus acquired, nor suggest anything pointing towards it. The land appeared to be subsequently acquired and unencumbered, and yet a purchaser was bound to take notice of the encumbrance and hold subject to it. So that it is not universally true that a purchaser may content himself with an inspection of the records. There are many facts outside the record, about which he must inquire or suffer the consequences. There was quite sufficient in this case to put the purchaser on notice. Whatever puts a party on inquiry amounts to notice, provided the inquiry becomes a duty, as in the case of purchasers and creditors, where the inquiry, if pursued, would lead to knowledge of the requisite facts: Milliken v. Graham, 22 P. F. Smith 490. The mortgage shows upon its face that it was taken to secure purchase-money of the land therein described, and that the mortgagee intended to preserve his lien, which could only be done by recording the mortgage within sixty days from the time it was executed and delivered. This, in connection with the fact that only sixty-two days had elapsed between the date and the entry, should have suggested inquiry, as to whether it was not antedated. It appeared further, that it was not acknowledged until the 29th January, only two days before it was recorded. While it is true that it might have been delivered before it was acknowledged, such a transaction in regard to a mortgage would be so exceptional and extraordinary as to excite inquiry. Again, the alderman before whom the acknowledgment was taken was a subscribing witness to the execution and delivery of the mortgage, from which it would naturally be inferred that the acknowledgment was simultaneous with the execution and delivery. The same may be said in regard to the deed. Its [60] acknowledgment is of a later date than the deed itself, and the magistrate, before whom it was taken, is also a subscribing witness to the execution and delivery. These circumstances, all of which appeared on the face of the paper, were sufficient to repel the inference which would otherwise have arisen from their dates, and were quite sufficient to put the purchaser on inquiry, and thus visit him with notice. There was no error in admitting parol evidence to prove the actual date of delivery, nor in the controlling effect given to the fact which the testimony clearly established. And, in addition to this, there was quite enough on the face of the papers themselves to make it the duty of the purchaser to inquire. If he had done so, he would have been fully informed that the mortgage was the first lien, and would not be divested by the sheriff’s sale. There are no facts in the case out of which estoppel could arise. Judgment affirmed.