Desmond v. Lanphier

Mr. Justice Windes delivered the opinion of the court. From the statement preceding this opinion it appears that at the time (May, 1894) the trust deed, to foreclose which appellee filed her bill, was acquired by her, there was no existing bona fide debt of its maker, Bridge, or of any one else, secured by it. It and the note purporting to be secured thereby had, previous to that time, on different occasions, been used by Bridge as collateral to secure divers claims owing-by him, but when it passed into the hands of appellee the transfer was from Bridge and not from any one with whom he had hypothecated them or from any bona fide owner or holder. Then, and not till then, as to appellee, could the trust deed take effect. That was the time of its delivery. It then, for the first time, in favor of appellee, became an existing incumbrance upon the real estate conveyed by it, and as to her had the same effect and validity, and no other, than if Bridge on that day had made a new trust deed and note for the same amount and delivered them to her. No deed is complete without delivery. 1 Jones on Mortgages, Sec. 84, 539; 2 Id., Sec. 948; Partridge v. Chapman, 81 Ill. 137-40; Weber v. Christen, 121 Ill. 91; Sullivan v. Eddy, 154 Ill. 200-6; Skinner v. Baker, 79 Ill. 496; Schultze v. Houfes, 96 Ill. 335-44; Herber v. Thompson, 47 La. An. 803, 809; Underhill v. Atwater, 22 N. J. Eq. 21; Purser v. Anderson, 4th Ed., Ch. (N. Y.) 18; Spencer v. Fredendall, 15 Wis. 736-40. Mr. Jones, in section 84, supra, says : “ Without delivery there is no mortgage. It takes effect only from the time of its delivery.” In section 539 the same author says : “ Delivery is another incident necessary to giving effect to the mortgage even as between the parties to it. Although the deed be recorded, if it has not been delivered, or the delivery was unauthorized, a subsequent conveyance by the mortgagor or a subsequent judgment against him will take precedence.” Section 948, the author says : “ The condition of a mortgage having been performed, a subsequent incumbrancer has the right to avail himself of the advantage and not to be postponed to equities newly created which in fact are subsequent to his own claim.” In the same section the author also says that when the original debt for which a mortgage has been given has been satisfied, “ the original mortgage can not, as against third persons especially, be dealt with as a subsisting security.” The authorities cited by the author in support of these propositions sustain him. In the Partridge case, supra, the Supreme Court held Avith regard to a mortgage which was executed by the OAvner of real estate to a person who Avas not present by himself or agent, and left the same for record, with directions when recorded to be sent to the mortgagee by mail, which was done, there was no delivery until it was mailed, and that a subsequent purchaser who took actual possession before the mortgage was delivered took a title superior to the mortgage. In the Weber case, supra, it was held that the acknowledging and recording of a deed without the knowledge or consent of the grantee did not amount to a delivery. To the same effect is the Sullivan case, supra. In the Skinner case, supra, the court says: “Delivery is an essential and indispensable element to .the conveyance of lands by deed for the reason that a deed takes effect only from the delivery.” In the Underhill case, supra, the Hew Jersey court holds that “ a mortgagor may again issue or negotiate a mortgage which has been satisfied, paid off or delivered to him, except as against intervening securities. The delivery of any instrument by the grantor gives it efficacy, and if he take a paper executed and once used for another purpose, its redelivery gives it again vitality.” In the Schultze case, supra, it was held that the lien of a trust deed, though recorded, takes effect only from the time the money is in fact received as against the equities of ,a third person under a prior unrecorded mortgage or trust deed; that it made no difference that the intention was that upon the payment of the money the title should relate back to the time of the recording of the deed, and that Avhile such an intention as betAveen the parties themselves might be carried out by the court, when the rights of third persons intervene, the intention of the parties must yield to the law. In the Purser case, supra, it was held that a mortgage which had been paid could for a valuable consideration be kept alive for other purposes, but not as against the rights of creditors or third persons which- had intervened. This ruling was made with reference to a second mortgage by the same mortgagor and an assignment for the benefit of creditors. In the Spencer case, supra, the Supreme Court of Wisconsin held that a husband could not keep alive, for the purpose of securing a new debt, as against his wife, a mortgage on the homestead which had been paid, because it was in effect making a new mortgage and could not be valid, under the statute regarding homesteads, without the signature of the wife. Long prior to the time appellee acquired this trust deed and note, and on March 21, 1889, Bridge had conveyed and warranted to appellant all his (Bridge’s) interest in the real estate in question, which was the legal title, subject to the lien of this trust deed, then outstanding in the hands of one of Bridge’s creditors. This conveyance passed Bridge’s title to appellant, was recorded in the recorder’s office of Cook county on March 23, 1889, and was, therefore, under the recording laws of this State, notice to all subsequent purchasers or incumbrancers claiming through Bridge. Hurd’s Stat. 1897, Ch. 20, Sec. 21; Willoughby v. Lawrence, 116 Ill. 11-21; Kerfoot v. Cronin, 105 Ill. 609-18; Cunningham v. Thornton, 28 Ill. App. 58-66, and cases cited; Schultze v. Houfes, 96 Ill. 335-44. The title having passed from Bridge to appellant, Bridge had none to convey and could convey no title in May, 1894, when he turned over to appellee the old trust deed, which then, the time of its delivery to her, became as between her and Bridge, a valid and existing deed. As to appellant, when this trust deed came back into the hands of Bridge, the debt for which it was a security having been extinguished by him, it became a nullity in equity—was the same as if it had never been made. Appellant’s deed, then being of record, took precedence of all instruments or conveyances purporting to affect the title of the real estate conveyed by it which could be made by Bridge. As we have seen, the old trust deed could have no greater force or effect than if it had been signed on the day it was delivered to appellee. That the recording of a document which had no existence as a deed, could give it no validity as a deed, is elementary. These facts, in our opinion, are controlling and conclusive in the decision of this case, and all other matters shown by the record are either immaterial or of no consequence, as are also the various contentions of the learned counsel in their arguments as to the law and facts governing the case. Except as hereinafter referred to we deem it unnecessary to mention specifically the numerous points made by appellee’s counsel in support of the decree. It is claimed for appellee, and several cases are cited to support the contention, that she is not required to take notice of the registry of the deed by Bridge to appellant, it being recorded subsequent to the date of record of the trust deed in question. An examination of the several cases cited (including Miller v. Larned, 103 Ill. 562, which seems to be principally relied on), shows that the facts and questions to be decided by the court in these cases were wholly different from the case at bar. These cases, because of the difference in their facts, are not applicable to the case of a trust deed which, like the one here in question, first had its existence as between appellee and Bridge, long after the record of the deed from Bridge to appellant, and for which appellee parted with no right and paid no consideration. The registry laws have application to subsequent purchasers and incumbrancers. Appellee is an incumbrancer and in a sense a purchaser subsequent to the record of appellant’s deed. She is bound by the record of conveyances in the apparent chain of title from the grantor in her trust deed. The deed to appellant being of record, is as much a notice of his title as against Bridge as if appellant had been in possession of the lots when the trust deed was transferred to her. 1 Jones on Mort., Sec. 458 and 710; Schultze, Kerfoot and Cunningham cases, supra. It is further claimed that appellant, by obtaining the release from Bridge of certain lots covered by the trust deed, which release stated that it should in no wise affect the lien of the trust deed on the remainder of the property thereby conveyed, acknowledged the validity of the trust deed, and can not now be heard to deny its validity. The trust deed was then outstanding as security of a debt due by Bridge, and was a lien which appellant could not then question as against Bridge’s then creditor, who was secured by it. When Bridge extinguished the debt, as he afterward did, that was the end of the lien of the trust deed as to appellant. It is also claimed that the dismissal of appellant’s cross-bill, not purporting to be without prejudice, is therefore, for want of equity, res judicata and a bar. We think a consideration of the whole record shows that the dismissal was the voluntary act of appellant at a time when he had a perfect right to dismiss his cross-bill without the consent of the defendants thereto, and is in no way an adjudication against appellant. The chancery act, Sec. 36, Ch. 22, Rev. Stat., has no application to this case. The decree of the Circuit Court is reversed and the cause remanded with directions to enter a decree dismissing appellee’s bill for want of equity at her cost. She will also pay all costs in this court.