Bullock v. Battenhousen

Mr. Justice Scholeield delivered the opinion of the Court: We perceive no sufficient reason for disturbing the judgment of the Appellate Court. We concur with that court in holding that under our registry laws the record of this trust deed does not charge subsequent bona fide purchasers without actual notice°with knowledge of the amount of the indebtedness of the promissory note set out in the bill. .We concur, also, in the main, with the reasoning expressed by that court in its opinion, as reported in 11 Bradwell, 665. It is true, as contended by counsel for appellant, that in Metropolitan Bank v. Godfrey, 23 Ill. 603, therein referred to, the question before the court was not as to the sufficiency of a particular description of indebtedness, as it is here, but as to the effect of an absolute deed referring to no indebtedness; but what was there said may be regarded as a reason equally cogent here. The language there was: “The spirit of our recording system requires that the record of a mortgage should disclose, with as much certainty as the nature of the ease will admit, the real state of the incumbrance. If a mortgage is given to secure an ascertained debt, the amount of that debt should be stated, and if it is intended to secure a 'debt not ascertained, such data should be given respecting it as will put any one interested in the inquiry upon the track leading to a discovery. If it is given to secure an existing or a future liability, the foundation of such liability should be set forth. North v. Belden, 13 Conn. 376; Hart v. Chalker et al. 14 id. 77.” This is peculiarly pertinent to the facts of the present case, and one of the authorities quoted in support of the language is literally analogous. In Hart v. Chalker, the condition in the mortgage, which was condemned because of the insufficiency of the description of the debt, ran thus: “The condition of this deed is, that whereas, said William Chalker has this day executed his note of hand to said Hart, dated 10th of May, 1834, on demand, with interest, if said Chalker shall truly and faithfully pay to said Hart the amount of said note, agreeable to the tenor thereof, then this deed to be void, otherwise to remain in full force and effect.” The policy, though not the letter, of our statutes requires, in all cases, a statement upon the record of the amount secured. Thus, in section 11, chapter 30, Rev. Stat. 1874, page 274, the form of mortgage there given requires the mortgage to “recite the nature and amount of indebtedness.” And in section 14, chapter 95, Rev. Stat. 1874, page 713, notices of sales of real estate pursuant to powers are required to state “the amount of indebtedness the instrument was given to secure,” and “the amount claimed to be due.” A statement upon the record of the amount claimed to be due informs all what lien is claimed. They know what they must contest, or subject to what they must take, in subsequently dealing with the property. It prevents secret conspiracies between mortgagors and mortgagees as to the fact and amount of indebtedness to the prejudice of subsequent purchasers and creditors, by compelling them to at once make known the real claim. In some instances, subsequent dealers with mortgaged property could not have information from the holders of indebtedness secured by mortgage, because they could not be found,—as in the case of negotiable securities running for a long time, and negotiated many times before maturity; and it might often be, as in the instance before us, perilous to rely on the word of the mortgagor. Undoubtedly, as between mortgagor and mortgagee, and as to persons having actual notice of the facts, both at common law and under our statute, a deed absolute on its face may be held to be a mortgage; but such eases are totally unaffected by our registry laws, and can not therefore have the slightest analogy to the present case. It may also be well to observe that the present case is in nowise analogous to cases wherein the debt is described by reference to another instrument. In those cases there is only the labor of going to the other instrument, where full and reliable information can be attained. It is fixed, and beyond evasion or perversion. But that is not the ease where the reference is to an individual whose interest may be to misrepresent the truth, or who may not, with reasonable efforts, be found. A note for one amount as well as for another will answer the description here, and this note might have been lawfully negotiated and transferred many times before maturity, and its holder then not have been traceable except at a labor and expense beyond any benefit to be derived from the knowledge he could impart. To hold this sufficient would, in cases that may readily and not unreasonably be conceived, practically prohibit subsequent parties from having anything to do with the property. Babcock v. Lisk, 57 Ill. 327, and Farrar v. Payne, 73 id. 82, cited and relied upon by counsel for appellant, are clearly distinguishable in principle from the present ease. In the first named case it was simply a question of construction whether $500, named as the consideration 'for executing the mortgage, was [a part of the sum secured by the mortgage, and it was held that it was,—that by, proper construction of the language employed the mortgage was expressly to secure the payment of this sum, and also the sum of $70, evidenced by a promissory note. In the other case, the amount of the note ($651) was given, and the only objection was that it was not stated when it would become due, as to which, quite obviously, considerations different from those applicable to a failure to state the amount of indebtedness would be applicable. The burden was upon appellant to prove actual notice of the amount of his claim, if that was relied upon, at the time Battenhousen purchased. Without discussing the question attempted to be raised in argument by counsel for appellant, whether the evidence of Martha Battenhousen was admissible, we are clear no actual notice was proved, and that Battenhousen is shown to have been a purchaser in good faith, for value. And we are also of opinion that the record does not disclose sufficient evidence of subsequent actual knowledge at a time when he could have legally avoided making any of the back payments. There is evidence that there was not actual notice of appellant’s claim until the service of summons in this case, and the proof shows the notes for the deferred payments were assigned before maturity. The judgment is affirmed. Judgment affirmed.