Essex County Nat. Bank v. Harrison

• Decision Date: 10 May 1898
• Parties: ESSEX COUNTY NAT. BANK v. HARRISON et al.
• Court: New Jersey Court of Chancery

40 A. 209

57 N.J.E. 91

ESSEX COUNTY NAT. BANK

v. HARRISON et al.

Court of Chancery of New Jersey.

May 10, 1898.

Creditors' bill by the Essex County National Bank against Harriet Harrison and others to remove a cloud from title to laud. Dismissed.

The complainant is a judgment creditor of the defendants Harriet Harrison and William Henry Harrison, and by virtue of its judgment has levied upon, sold, and purchased at sheriff's sale, and now holds his deed for, a piece of property situate in East Orange, Essex county, in which, at a time prior to the date of the judgment, Mrs. Harrison had a life estate, and William Henry Harrison held the fee, subject to his mother's life estate, to the equal undivided one-half part. The object of the bill is to remove a cloud upon the complainant's title, so derived, in the shape of a conveyance made by the two Harrisons to the defendant Thomas P. Edwards, bearing date the 30th of March, 1895, and prior to the entry of complainant's judgment. The ground of such relief is that such conveyance, being absolute in its terms, was, nevertheless, reduced to the grade of a mortgage by a concurrent writing in the nature of a defeasance, signed by Edwards, reciting that the conveyance was made to secure the sum of $1,500, loaned by him to the Harrisons, and agreeing to reconvey the same upon payment of that money, with interest. The bill alleges that the deed to Edwards was recorded in the records of deeds of conveyance of Essex county shortly after it was made, but that the concurrent writing in the nature of a defeasance, which rendered it a mortgage, was never recorded, and hence the affair is brought within the range of the twenty-first section of the mortgage act (2 Gen. St. p. 2106), which declares that if, in such case, the defeasance is not recorded, "the grantee in the said deed or conveyance shall not be entitled to or enjoy the benefits and advantages hereby given to a mortgagee." The bill alleges, and it is an admitted fact in the case, that the defendant Edwards took possession of the premises as soon as the deed was made, and has since remained in the possession thereof. The bill further alleges, and it is an admitted fact in the case, that the sum of $1,500 advanced by Edwards was not paid to the Harrisons, but to one Hawkins, who at the time held the title to the premises by a deed from the sheriff by virtue of a sale founded on a common-law Judgment against the Harrisons and one Inston, which in turn was founded on a promissory note made by Inston and William H. Harrison, and indorsed by Harriet Harrison; and that upon the payment of that money to Hawkins he conveyed the premises to the Harrisons, and they, by deed of the same date, and executed and delivered at the same time, made the conveyance in question to the defendant Edwards.

Alfred F. Skinner, for complainant.

Samuel J. MacDonald, for defendants.

PITNEY, V. C. (after stating the facts). The first question argued is whether or not the defeasance in question has the effect of reducing the conveyance to the grade of a mortgage, or, in other words, whether it gives the two Harrisons the right to redeem upon the payment of the money in question. And I do not think that question is open to the least doubt. The deed of conveyance was no more than a mortgage; and, if the object of the bill were to redeem the premises, the complainant's case would be clear. Hut such is not the object of the bill, and the complainant at the hearing declined to accept such remedy.

The next question is as to the effect, under the statute, of the failure to record this defeasance, and disclose by the record the true character of the transaction. Now, the language of the act is that, if the grantee shall fail to record the defeasance, he "shall not be entitled to or enjoy the benefits and advantages hereby given to a mortgagee." By the word "hereby" is meant, not that particular section alone, but the whole act, of which it is a part. And counsel for defendants contends that, in order to ascertain its meaning, we should go back to the origin of the clause in question, and look at its original connection and surroundings. The section in question is the fourth section of an act entitled "An act to register mortgages," passed the 7th of June, 1799. Pat. Laws, 102 (Revision 1821, p. 463). On the same day was passed Judge Paterson's "Act respecting conveyances," which provided for their proof and record, and for the use of certified copies in place of the original as evidence in courts, etc. We thus have two distinct acts; one relating to mortgages, the other to deeds. The first section of that mortgage act provided for the procuration by the clerks of the county courts of books in which an abstract of the mortgage can be recorded, and for the recording thereof. Other sections fix the fees for recording, and provide for the discharge of the mortgage by an entry in the margin by way of cancellation. In short, the act provided a cheap mode of giving notice to all the world of the existence of the mortgage, without Incurring the labor and expense of transcribing it at length; and the tenth section provided that "every such mortgage shall be void and of no effect against a subsequent bona fide mortgagee or purchaser of the same for a valuable consideration not having notice thereof, unless it shall be acknowledged or proved and registered within thirty days after the signing and sealing and delivery of the same." The whole scope of the act, then, was to confer a benefit upon the holder of the mortgage, and to prevent any person from obtaining a superior right in the mortgaged premises, provided an abstract of it was recorded in a particular manner, thereby...