Nickel v. Brown

Bryan, J., delivered the opinion of the Court. It appears from'the evidence in the cause that Stewart Brown, as trustee, is seized of the reversion in fee in three certain lots of ground lying in the City of Baltimore and that this reversion- is expectant on a leasehold estate for ninety-nine years. The lease is not set out in the transcript sent to this Court, nor any extract from it. We, however, gather from statements in the hills of exception that a rent was reserved on each lot of sixty dollars per annum, payable half yearly on the first day of January and on the first day of July in each and every year, and that the lessee covenanted for him — 184 — self, his personal representatives and assigns to pay the rents when they should become due, and all taxes and assessments on the property. It is also stated that Christian Gr. Nickel by assignment duly recorded in 1886, became jmssessed of the leasehold and that he paid the several rents up to January, eighteen hundred and eighty-nine, and that no rent has been paid since that time. Christian Nickel died before the institution of this suit, and his widow Eredericka C. Nickel was duly qualified as his executrix. In July, 1889, this leasehold interest was duly sold by the executrix under an order of the Orphans’ Court of Baltimore City to Mrs. Scott. Deeds were executed for the leaseholds in the several lots mentioned in September, 1889, and delivered before the first of January, 1890, but they were not recorded until June, 1890. There was evidence that Mrs. Scott took possession of the property on the day of the sale to '•her, and circumstances were proved sufficient to leave to the jury the question of whether the trustee had notice of the existence of the deeds before the institution of this suit. The suit was brought in February 1890, after the delivery of the deeds to Mrs. Scott, but before they were recorded, and the leading question is, whether the executrix is liable for the rents and taxes that were in arrear when the suit was brought. By the terms of the lease it was "required that the rents should be paid semi-annually at stated periods throughout the entire term of the tenancy. When these periods arrived, the person who occupied the position of tenant was bound by covenant to pay them. Nothing can be more clear than that there was to be no intermission in the payments; there was always to be a tenant who was bound to pay and this tenant was. either to be the original lessee, or an assignee of the term. The assignee became bound bjr the covenant to pay the rent as soon as his legal title by assignment was per — 185 — fected; the obligation of this covenant ceased as soon as his title as assignee came to an end, but it continued until that time. In a suit brought against him after his title by assignment had terminated, no recovery could he had at law for rents which had accrued during the assignment; although it was otherwise in equity. Hintze vs. Thomas, 7 Md., 346. But his assignment continued in full force and effect until he put some one in his place possessed of the leasehold by legal title. In Mayhew vs. Hardesty, 8 Md., 479, it was decided that an assignee was liable on the covenants of the lease, although he had sold his entire interest to a third person and executed a bond of conveyance for the propertjr and the lessor had repeatedly accepted rent from the purchaser. It was held necessary that the legal title should pass to the purchaser before the assignee’s liability ceased and that the legal title could not pass except by deed executed and recorded. In Lester vs. Hardesty, 29 Md., 50, it was said that the legal obligations upon the covenants in a lease “run with the land, and bind the party holding the legal estate. ” And it was held that where the assignee had sold his interest in the leasehold and executed and delivered a deed to the purchaser, that the purchaser was under no legal obligation to record the deed and that until recorded, the vendor continued to hold his position as assignee and was liable on the covenants of the lease. There can he no hiatus in the tenancy; there can he no abeyance of the legal title to the leasehold. The requirement of the lease is that throughout the whole period of its existence there shall be some one to fulfil the obligations of the tenancy. The mode by which the legal title must be conveyed is distinctly provided in the twenty-first Article of the Code of Public General Laws. The first section is as follows: Ho estate of inheritance or freehold, or any declaration or limitation of use, or any estate — 186 — above seven years, shall pass o.r take effect unless the deed conveying the same shall be executed, acknowledged and recorded as herein provided.” It will be seen that leaseholds for more than seven years are to be conveyed in the same manner as inheritances and freeholds. By the thirteenth section it is enacted that the deed must he recorded within six months; the fourteenth section provides that when acknowledged and recorded, as directed, it shall take effect as between the parties thereto from its date; the fifteenth, as if from abundant caution, repeats the declaration of the first section that it shall not pass title unless acknowledged and recorded. The sixteen th section enacts that where there are two or more deeds conveying the same property, the one which is first recorded according to law shall be preferred, if made bona fide and on good and valuable consideration. These citations from -the statute law show the indispensable necessity of the registration of deeds. The recording is the final and complete act which passes the title, until this is accomplished everything else is unavailing. As the recoi'ding is necessary to the passing of the title, it must follow as a matter of course that until the recording takes place, the- title remains in the grantor. The registered deed shows the title; whatever other rights may arise from the unregistered deed, it cannot effect a transmission of the legal title.' But after the registration within six months from date has taken place, the fourteenth section makes it effective between the parties from its date; that is to say, the. grantor is obliged to accord to the grantee all rights which belong to owner-? ship and title after that period. But the section was not intended to be in conflict with other parts of the law, and to impugn in any way its leading purpose to make the registry of deeds the official and authoritative expository of title to real and leasehold property. It has the effect plainly signified by its language and does — 187 — not work a retroactive transmutation of title. The faith and credit which the law intends to give to the registry would he greatly weakened if at any moment there could be a legal title by deed, which did not appear upon the registration records. The nineteenth and twentieth sections make provision for the recording of all deeds, except mortgages, after the expiration of six months from date. They are to have when recorded the same validity and effect against persons named in these sections as if recorded within six months. But it is not said that the title is to pass before they are recorded. When recorded the title passes. And then by the nineteenth section they are to have against the grantors, their heirs or executors, and against all purchasers with notice, and against all creditors of the grantors and their heirs, who have become so after the recording of the deeds, the same effect which they would have had if recorded in time. By the twentieth section if the grantee shall take possession of the property conveyed, the deed ■after being recorded (although the record is made after the expiration of six months) shall have the same effect against all persons as if recorded in proper time; but the priorities are not affected which are given by the sixteenth section to another grantee who shall have recorded his deed in the meantime. By. the twenty-first section it is declared that the deed shall have effect only as a contract for conveyance against all creditors who shall have become such before it was recorded. These sections determine the rights which deeds recorded out of time shall confer on grantees in their dealings with persons of the descriptions mentioned; hutas has been already said they do not affect the rule established by previous portions of the law, that the title does not pass until the recording takes place. The deeds to Mrs. Scott were recorded in June, 1890; at that time she was invested with the legal title, and then, and not earlier, the liability — 188 — of the former assignee, her grantor, ceased to exist. We do not find that this liability depended on any question of notice, or possession, or on any thing else except the possession of the legal title. The suit was brought in February, 1890, for the arrears of rent and taxes due in January immediately previous. The learned Court below held that the defendant was liable for them and we approve of its decision. In the view which we have taken of the law, the other questions in the case are entirely unimportant. (Decided 22nd January, 1892.) We have read with great pleasure and profit the very able and lucid opinion delivered by Judge Duffy when he decided this case in the Court of Common Pleas. We desire to acknowledge the aid which we have derived from it in the consideration of this very interesting and important question. We approve of his conclusion and agree, in most respects, .with his reasoning. As an important contribution to juridical knowledge, we shall direct it to he published in the Reports. Judgment affirmed. Alvey, C. J., and McSherry, J., dissented.