Curtis v. Moore

• Decision Date: 02 March 1897
• Citation: 46 N.E. 168,152 N.Y. 159
• Parties: CURTIS v. MOORE et al.
• Court: New York Court of Appeals Court of Appeals

152 N.Y. 159

46 N.E. 168

CURTIS

v.MOORE et al.

Court of Appeals of New York.

March 2, 1897.

Appeal from common pleas of New York city and county, general term.

Action by De Witt Curtis against J. Charles Moore and another to foreclose a mortgage. From a judgment of the general term (31 N. Y. Supp. 19) affirming a judgment on the report of a referee, defendants appeal. Affirmed.

Benjamin Yates, for appellants.

Robert L. Harrison, for respondent.

VANN, J.

On the 19th of October, 1885, Edward S. Curtis conveyed an undivided one-sixth interest in certain premises situate in the city of New York to John B. Armstrong, by a deed dated that day, and duly recorded October 26, 1885. At the same time, the said Armstrong executed a purchase-money mortgage to Edward S. Curtis, to secure a note for $2,000, given by the former to the order of the latter, of even date with the mortgage, and payable two years thereafter, with interest at 6 per cent. This mortgage was duly recorded November 24, 1885. March 29, 1886, said Edward S. Curtis borrowed the sum of $500 of the plaintiff, and delivered to him the said note and mortgage, and gave him an instrument of which the following is a copy: ‘$500. Chicago, Ill., Mar. 29, 1886. One day after date, for value received, I promise to pay to the order of De Witt H. Curtis the sum of five hundred dollars, at Chicago, with interest at the rate of 8 per cent. per annum after date, having deposited with said D. H. Curtis, as collateral security, a certain real-estate mortgage for the sum of two thousand dollars, bearing date of 19th October, [152 N.Y. 161]1885, given to E. S. Curtis by J. B. Armstrong & Desiree D., his wife, which I hereby give the said D. H. Curtis, agent or assignee, authority to sell, or any part thereof, on the maturity of this note, or at any time thereafter, or before, in the event of said securities depreciating in value in the opinion of said D. H. Curtis, at public or private sale, at the discretion of said D. H. Curtis or his assignee, without advertising the same, or demanding payment, or giving me any notice, and to apply so much of the proceeds thereof to the payment of this note as may be necessary to pay the same, with all interest due thereon, and also to the payment of all expenses attending the sale of the said mortgage, including attorney's fees, and, in case the proceeds of the sale of the said mortgage shall not cover the principal, interest, and expenses, I promise to pay the deficiency forthwith after such sale. Edward S. Curtis.’ On May 20, 1886, Edward S. Curtis borrowed from the plaintiff $500, on the same security as collateral; and, on August 25th in the same year, he borrowed $500 more, each time giving him an instrument similar in form to that of March 29, 1886, but none of them were acknowledged or recorded. February 7, 1887, said Armstrong conveyed the premises covered by the mortgage to Edward S. Curtis, by deed duly recorded on the 5th of March, following. On the 23d of February, 1891, Edward S. Curtis, for a valuable consideration, conveyed the premises to the defendant J. Charles Moore, by deed duly recorded on the 11th of April thereafter. This action was brought to foreclose said mortgage, and the defendant Moore alleges in defense that he is a bona fide purchaser of the premises in question, without notice, and that the conveyance from Armstrong to Edward S. Curtis effected a merger of the mortgage. Upon the trial it did not appear that Mr. Moore purchased the premises either with or without actual knowledge of the outstanding mortgage and note given by Mr. Armstrong, and transferred to the plaintiff. He is presumed, however, to have had notice of such facts, as an examination of the record would have disclosed.

Under the circumstances above stated, the plaintiff became the owner of the mortgage for the purpose for which it was delivered or pledged to him, for ‘a good assignment of a mortgage is made by delivery only.’ Fryer v. Rockefeller, 63 N. Y. 268-276;Runyan v. Mersereau, 11 Johns. 534;Green v. Hart, 1 Johns. 586. If the omission of the plaintiff to record the evidence of the transfer of the mortgage to him inured to the benefit of the defendant under the recording act, we may assume that the latter became a bona fide purchaser without notice; otherwise, not. In Purdy v. Huntingdon, 42 N. Y. 334, the question was directly passed upon by this court, and decided adversely to the contention of the defendant. It was held in that case that the assignee of a recorded mortgage upon real estate, which was conveyed by the mortgagor to the mortgagee after an assignment of the mortgage, has a valid lien as against a purchaser from the mortgagee who took without notice of the assignmentNotwithastanding the conveyance to the mortgagee, as well as the conveyance from the mortgagee to the purchaser, were recorded before the assignment was placed upon record. The court said: ‘The question is then presented whether Calvin Huntingdon can be protected in his title as against the mortgage by reason of the omission to have the assignment thereof recorded. It is conceded that he is to be charged with constructive notice of the existence of the mortgage, and of the continuance of its lien, by its record in the proper office. By that he was informed, not only of the date of the mortgage, the amount secured thereby, and of all its particulars, but that it was open and uncanceled of record, and therefore apparently an outstanding lien and incumbrance on the premises of which he was taking title. Having that information, he knew, or was at...