Carter v. Champion

Williams, J. The plaintiff asks to have this deed, which is defectively executed, established, as against the grantor and his creditors. The grantor does not object to this; and if he did, his objection could not avail him, as was adjudged in Watson & al. v. Wells, 5 Conn. Rep. 468. and Smith v. Chapman & al. 4 Conn. Rep. 344. But whether the plaintiff has the same right as against other mortgagees of the same property and attaching creditors, is the great question. The rights of these various creditors are now concentrated in Champion, the defendant. His debts are older than the plaintiffs; but the plaintiffs, at the time it was contracted, was attempted to be secured on the land. Of this, however, these creditors had no actual knowledge, until after two of them had received a mortgage, and the others had attached. On the part of the defendant, it has been contended, that if these creditors had had actual notice of the existence of this defective deed, yet as it is a mere scramble among creditors, all of whom are entitled to security, a court of chancery will not interfere, but leave them to adjust their legal rights. In the case of Priest v. Rice, 1 Pick. 164. it was decided in Massachusetts, by a divided opinion, that a creditor, who knew of the existence of a deed of land, made by his debtor, could not secure it to pay his debt, although the deed was not registered. But in this case, no opinion is necessary as regards that point, because actual notice is not proved. Nor can the fact that actual notice was given to the attaching creditor, after his attachment, and before the setting-off by execution, have any effect; for the creditor, who had acquired a lien, by his attachment, could not be deprived of the effect of his lien, by a subsequent act of another person. The title was not indeed perfected, by the attachment, but the lien was; and if he could not, by a release deed, pass any interest in the — 555 — land, as no interest was in him, yet he acquired a right to complete a title, if he chose to pursue the steps pointed out by statute. This the defendant has done; and to say that his right could be affected, by the subsequent act of a third person, would be to deprive the attachment law of its vitality. By such a construction, a creditor, who had fairly selected from the property of his debtor, when the security was ample, might, by a secret act of the debtor, before the attachment and notice by the creditor, afterwards be wholly deprived of the benefit of his security, when it had become too late to obtain any other. Such a construction is opposed to principle, and the only authority which has been produced upon the point. Stanley v. Perley, 5 Greenl. 399. It was also claimed, on the part of the defendant, that Rutty was taking a deed of this land, which was known to the plaintiff, and yet the plaintiff did not disclose his own claim, and must therefore be postponed. As to this, it is enough to remark, that if the registering of the plaintiff’s deed was in law constructive notice to all the world of its existence, or even to the defendant, or those under whom he claims, Carter was not bound to give notice of a fact, which the defendant and those under whom he claims, was otherwise bound to notice. Carter might fairly suppose Rutty knew what the law implies that he knew. But if, on the other hand, there is no implication of notice, by the recording of the deed, then it is not necessary to go into the question as to the effect of Carter's silence. The question then comes to this ; is the registering of a defective deed constructive notice so as to bind third persons? Here it is to be remarked, that the registering of a deed is a legislative regulation, founded indeed upon the best principles of policy, for the security of titles, but still depending for its effect upon the true construction of the statute. Our statute has prescribed the manner in which deeds of land shall be executed: that they shall be attested by two witnesses; acknowledged before a magistrate; and, to make them effectual against third persons, shall be recorded. The deed to be recorded, then, is the deed spoken of in the statute; that is, a deed executed according to the statute; not the instrument merely, which the common law would denominate a deed, but the instrument, which has the statute requisites to give it validity as a deed; because no other instruments are recognized as grants and deeds of “houses and landsthe statute being — 556 — express, that no grant or deed of land shall be valid, unless written, subscribed, witnessed and acknowledged as aforesaid. In one case only, a provision is made for a deed not completed according to the requisites of the statute; and that is, where the grantor refuses to make an acknowledgment. Then, in conformity to a similar provision in the civil law, the grantee may leave a copy of his deed with a claim of title, wdth the register, which secures his title until a legal trial has been had. This exception shews, that in all other cases, the deeds completed in the manner required by the statute, were intended. That this is not a deed of that character, the whole object of the bill shews. Is the recording, then, of such an instrument of any effect? It may, indeed, be evidence tending to prove actual notice; but when the fact of actual notice is negated, as it is in this case, can the record have any effect upon third persons? Now, if this be a rule of policy, adopted by the legislature, the court is not to extend it to cases not within its provisions; and should it be extended to the case on trial, I know not where we are to stop, or what line to draw’. If it be said, that no prudent man will stop without looking at the record, that may be said as truly in any other case as in this, and would be equally applicable to any other defect. But in point of fact, we know purchases are often made, where from the distance of the record, or a reliance upon the integrity of the grantor, no such examination is made And although this is no excuse for a party, where his case is within the act, yet it may have been the reason why the legislature did not extend the provisions of the act to cases of this kind. But whatever may have been their reasons, it is sufficient forme, that they have not done so. It was claimed, on the part of the plaintiff, that Lord Redesdale, in his construction of the English statute, had decided, that all deeds and conveyances—whether actual legal conveyances or not—whereby any lands may be affected, are within the view of the legislature. Now, if this were so, perhaps it would be a sufficient answer, that our statute speaks of grants and deeds of bargain and sale and mortgages, and of no other conveyances. But it is believed, that the English authorities are uniform on the subject. In Morecock v. Dickins & al. Ambl. 678. it is said, that the registering of an equitable mortgage in Middlesex, is not presumptive notice, of itself, to a subsequent legal mortgagee, so as to take from him — 557 — his legal advantage. See also Wrightson & al. v. Hudson & al. 3 Eq Ca. Abr. 609. pl. 7. And in Underwood v. Lord Courtown, 2 Sch. Lef. 64. the same Chancellor above cited says: “It is contended, that the deed operated as a contract; that being registered, it bound the title to the land, according to the terms of that contract; and that every subsequent purchaser must be a purchaser with notice. It seems to me, that nothing could be more mischievous than to hold, that the putting of anything on the registry, is notice, within the meaning of the word notice, as applied to courts of equity in such cases.” This is sufficient to shew, that Lord Redesdale did not mean, in the former case, what the plaintiff supposed; or if he did, that he was soon after satisfied, that he was incorrect. The case of Wendell v. Wadsworth, in err. 20 Johns. Rep. 559. was cited in support of the plaintiff’s claim. There was a conveyance of a soldier’s right, but without deed, deposited in the office of the county clerk; and the question was, whether a deposite of a deed not sealed, was within the statute. The deed contained not only a transfer of the land, but a covenant for further assurance; and the act required “all deeds and conveyances, made and executed, or pretended so to be, of and concerning, or whereby any of the said lands might be any way affected in law or equity, to be deposited,” In this case, the Chancellor held, that the words ot the statute were comprehensive enough to embrace the. plaintiff’s case, reaching every instrument affecting the lands in law or equity; and that the deposite operated as notice would under the registry act. This decision was reversed in the court of errors, on the ground that the statute was not intended, like the registry acts, to affect third persons with notice, but merely to permit those incline I, to inspect. But Spencer, J., in giving the opinion of the court, says: “It would seem to me, that deeds and conveyances mean the same thing; that they are used as synonymous expressions; and that therefore, no paper, which was not a deed, and did not convey the land from the grantor to the grantee, was within the words of the statute, or its meaning and intent.” 20 Johns. Rep. 663. And in Frost & al. v. Beekman, 1 Johns. Chan. Rep. 288. 300. Chancellor Kent says: “The question how far the unauthorized registry of a mortgage would charge a purchaser with notice of the mortgage, does not necessarily arise. The better opinion in the — 558 — books seems to be, that it would not be notice.” And in a more recent case before the court of errors, upon an assignment of a mortgage, Sutherland, J. said there was no law requiring the recording of it. “If he [the appellant in that case] had caused it to be recorded, it would have been a voluntary, and inefficacious act. In judgment of law, it would have been notice tono one.”— “No presumption can be indulged, that if the assignment had been recorded, the respondent would have become apprized of the fact.” James v. Morey in err. 2 Cowen, 246. 296. And in the case of Lessee of Heister v. Fortner, 2 Binn. 40. it was explicitly decided, that a deed registered, which was defectively acknowledged, was not constructive notice to a subsequent purchaser. Add to these the recent opinion of Chancellor Kent, in his Commentaries, who declares the authorities to be uniform on the subject, except in the state of Louisiana, which, no doubt, is founded on the principles of the civil law rather than of the common law. 4 Kent's Comm. 167, 8. It would seem as if these authorities were sufficient evidence of the law, unless cases in this state are to be found, in which they are denied or doubted. The only case within my recollection, is that of Watson & al. v. Wells, 5 Conn. Rep. 468. 473. where the question was discussed, and not decided. The Chief Justice says: “I am inclined to think, that there was no constructive notice arising from the plaintiff’s deed, to which there was only one witness; and that from the record of a deed, which is not complete according to law, and which therefore conveys nothing, there is no presumption of notice. On this subject, however, I would be considered as giving no opinion.” As a general rule, then, I must think, that there is no doubt, that the recording of an instrument so defective, that it cannot pass title by our law, cannot be considered constructive notice of the existence of such instrument. It was claimed, however, that where the instrument appeared on its face to be a good one, it would be the duty of the clerk to record it; and therefore, it ought to be available. It might, indeed, in such case, be prudent for the clerk to record the deed, and to leave the question of its validity to be decided by the court; and yet it is difficult for me to comprehend how a deed, which is void for want of two witnesses, acquires any additional validity, because it seemed to have two. It may — 559 — be more difficult to discover the defect; but when discovered, the conveyance must be the same in one case as in the other, A forged deed, or a deed with a forged acknowledgment, or an acknowledgment before a man who claimed to be a justice, but was not, might appear valid; and it might be proper for a clerk to enter such deed upon record, he not being a judge, but a mere ministerial officer; but when recorded, it would convey no more title, nor be any more evidence of a contract to convey the land, than if the deed had but one witness. And it would seem very strange to say, that if unfortunately a person takes a deed, and has but one witness, and has it recorded, it shall not be constructive notice; and yet if that same person, discovering the defect before he gives it to the clerk for record, adds the name of a second witness, and then causes it to be recorded, this deed should be constructive notice. Such a distinction cannot exist; and as there is no proof of actual knowledge of the existence of Carter’s deed in the defendant, and as both plaintiff' and defendant are bona fide creditors of William Carter, and both have attempted to secure their debts, by the same property, I see no reason why they should not be left to their legal rights, according to the maxim, that where two have equal equity, he who has the legal right shall prevail, and the maxim—Qui prior est tempore, potior est jure. Berry v. Mutual Insurance Company, 2 Johns. Chan. Rep. 608. It was suggested, that the parties did not stand upon the same equitable ground; as the plaintiff trusted his money upon the credit of the land in question; and it is said, that in England, a judgment creditor does not stand upon the same ground as a mortgagee. A judgment is considered there only a general security, not a special lien on the land. Finch & al. v. Earl of Winchelsea, 1 P. Wms. 279. Here that part only of the real estate, which has been attached, is bound; and I see no reason why the lien acquired, by attaching a particular piece of land, should not be considered as much a specific lien, as if acquired by the voluntary act of the debtor. I do not enquire whose was the oldest debt, but whose is the oldest legal lien, fairly acquired? In this case, Champion has that lien. His legal title is complete; and so far as appears, his legal lien was obtained without any knowledge of the plaintiff’s claim. I see, then, no reason why, as between these bona fide creditors, a court of equity should disturb them in the enjoyment of their legal rights. — 560 — As to the interest of William Carter, the witness, I can see none. He must pay both debts; and whether this land pays the plaintiff’s debt, or the defendant’s, must be indifferent to him. I think his interest is balanced; but if any exists, it is too remote and coniingent to prevent his being a witness. Still less ground of objection do I see to the testimony of Rutty. He can have no possible interest; and the fact that he was named a defendant in the bill, was not, and under the circumstances of this case, could not be, any solid ground of objection to the witness. I would, therefore, advise the superior court, that the witnesses Carter and Rutty were properly admitted; and that the plaintiff is entitled to no relief as against the defendant Champion, but ought to have a decree in his favour as against William Carter. The other Judges were of the same opinion. Decree for defendant Champion; Against defendant Carter.