Wheaton v. Dyer

Waite, J. The plaintiff and defendant both claim title to the same lands, under mortgage deeds from Francis L. Wheaton. The question arising upon the record, is, which, in equity, is entitled to the priority. : Our statute provides, that “ all grants, and deeds of bargain and sale, and mortgages of houses and lands, shall be recorded at length, by the register or town-clerk, where such houses and lands lie ; and no deed shall be accounted good [311] and effectual to hold such houses and lands, against any other person or persons but the grantor or grantors, and their heirs - only, unless recorded as aforesaid.” Stat. 390. tit. 57. c. 1. (ed. 1838.) Although the plaintiff's deed was the first executed, yet it was not recorded until after the defendant’s had been executed and recorded. The statute gives the. defendant the priority, unless such facts are shown as will deprive him of that advantage. The plaintiff insists, that the knowledge which the defendant had of the prior lien, at the time of taking his conveyance, is sufficient for that purpose. It has long been settled, that the object of the registry law is to give notice of the state of the title. Hence, if a person with actual knowledge of a prior unregistered deed, takes a conveyance of the same property, he takes subject to the prior deed. The policy of this rule has been doubted by some. Wyatt v. Harwell, 19 Ves. 435. But it has, nevertheless, become established. The rule, however, is founded in the fraud of the party taking the second conveyance. Jolland v. Stainbridge, 3 Ves. 405. Wyatt v. Harwell, 19 Ves. 435. Worseley v. De Mattos, 1 Burr. 474. And wherever the imputation of fraud is removed, the rule does not apply. Thus, if a person were induced to loan his money, upon an agreement that he should be secured, by a mortgage of certain lands, he would not be deprived of his security, by notice of an outstanding unrecorded deed, given him after he had parted with his money, and before he had obtained his mortgage deed. Under such circumstances, he would not be chargeable with fraud in perfecting the security. The case would be different, if he had the notice before parting with his money, or in time to reclaim it. Has the defendant, in this case, been guilty of any fraud in taking his mortgage ? After searching the records, and making all reasonable enquiries, respecting his debtor’s property, and finding no incumbrance upon it, he levied his attachment, He thereby acquired a lien upon it for the satisfaction of his debt, and all the costs that might arise in the suit, which no subsequent notice could defeat. Carter v. Champion, 8 Conn. Rep. 549. [312] Had he obtained judgment in his suit and levied his execution upon the lands attached, his title would not have been affected, by the plaintiff’s prior deed. And the recording of that deed, at any time subsequent to the attachment, would have given the plaintiff no priority. But after the attachment and before any notice of the plaintiff’s deed, he makes an agreement with the debtor, to withdraw the suit, relinquish a part of the debt, and take a mortgage upon the lands attached to secure the balance. After this arrangement is made, and before the mortgage deed is actually executed, he is informed of the deed to the plaintiff. Under these circumstances, was it fraudulent or inequitable, on the part of the defendant, to carry the agreement into execution ? The plaintiff sustained no injury, by the exchange of the liens. The defendant’s debt was not increased, but diminished. The subsequent costs in the suit, for the satisfaction of which a lien was created by the attachment, were avoided. Upon the facts found by the superior court, we think, the plaintiff has failed to shew any fraud on the part of the defendant, or any superior equity in his own favour. No sufficient cause, therefore, is shown, for disturbing the title acquired by the defendant. The decree of the court below must be affirmed. In this opinion the other Judges concurred, except Church, J., who was not present. Judgment affirmed.