Hanson v. Johnson
| Decision Date | 01 July 1919 |
| Citation | 42 N.D. 431,177 N.W. 452 |
| Parties | HANSON, State Bank Examiner, for and in behalf of FIRST INTERNATIONAL BANK v. JOHNSON et al. |
| Court | North Dakota Supreme Court |
Where an instrument affecting real property is required by the recording acts to be recorded in the office of register of deeds in the county where the real property is situated in order to be notice to subsequent purchasers for value, and there is a further requirement by law that when such instrument is deposited with the register of deeds for record he may require the payment of the recording fee in advance, held, that the depositing of the instrument with the recording fee unpaid with the register of deeds for record, and the same is not entered upon the reception book or spread at length upon the record, does not constitute the recording of the instrument so as to be constructive notice to subsequent purchasers for value until the required recording fee is paid. Held, further, if the instrument is deposited for record and at that time the required recording fee is not paid and the instrument is recorded by being entered in the reception book or spread at length upon the record, it will be constructive notice to subsequent purchasers for value, even though the recording fee is not paid at the time of depositing the instrument for record.
By the provisions of section 6910, Comp. Laws 1913, an antecedent or pre-existing debt constitutes value for an instrument payable on demand or at a future time. The rule is different if the antecedent or pre-existing indebtedness, which is the consideration of an instrument, is past due and there is no extension of time of payment to a time certain, and there is no surrender of security for the same debt, nor surrender of legal rights, nor any new instrument taken for the antecedent or pre-existing indebtedness payable on demand or at a future time.
Appeal from District Court, Oliver County; J. M. Hanley, Judge.
Action by W. E. Hanson, as State Bank Examiner of the State of Washington, for and in behalf of the First International Bank, an insolvent corporation, of South Bend, Wash., against M. J. Johnson and another, and Forest City National Bank. Judgment for defendant bank, and plaintiff appeals. Reversed, and case remanded.B. W. Shaw, of Mandan, and Robert Dunn, of Center, for appellant.
Miller, Zuger & Tillotson, of Bismarck (H. A. Brown, of Forest City, Iowa, of counsel), for respondent Forest City Nat. Bank.
This action is brought upon a promissory note, dated November 26, 1912, for $3,100 with interest after date at the rate of 8 per cent. per annum and for the foreclosure of a real estate mortgage securing said note and bearing even date with said note, a lien against the N. 1/2 of section 11, township 142, range 87, Oliver county, N. D. The note and mortgage were each executed and delivered by M. J. Johnson and Clara Johnson, who were then the owners of the land in question, to the First International Bank of South Bend, Wash. Neither of the Johnsons interposed a defense.
The Forest City National Bank claims a lien on the same land by reason of a deed executed by the Johnsons to it on the 13th day of May, 1910, at which time the Forest City National Bank claimed the Johnsons were indebted to them for $5,472.40. The Forest City National Bank, in its answer, in substance alleged that, though the deed in effect was absolute in form, it was intended and agreed to be security for said indebtedness and obligations of the said Johnsons to said bank. Defendant further in substance alleges that said deed was deposited on the 2d day of April, 1912, in the office of the register of deeds of Oliver county, and on the same day was duly presented to the county auditor for certification as to delinquent taxes, and that said county auditor officially certified and indorsed upon said deed that all delinquent taxes were paid and transfer of said premises was entered in his office, and that, owing to the neglect and default of the register of deeds, such deed was not recorded at length in the office of said register of deeds on the day it was filed for record, but on the 19th day of May, 1914, was recorded in the office of the register of deeds of Oliver county in Book 10 of Warranty Deeds, on page 280. The answer further alleged that the First International Bank of South Bend, Wash., prior to November 26, 1912, had actual notice or knowledge of the existence of said deed to the Forest City National Bank in addition to the constructive notice imported by the records of Oliver county, and took the mortgage which plaintiff is seeking to foreclose with full knowledge of the Forest City National Bank's interest and rights in and lien upon the said premises and subject to such lien of the Forest City National Bank. The note upon which plaintiff maintains this suit is set out in full in his complaint and is a note payable on demand.
The Johnsons were the owners of the land in question on the 13th day of May, 1910, at the time said deed was executed and delivered to the Forest City National Bank.
It appears that the deed was taken from the Johnsons to the Forest City National Bank as security and therefore, though a deed in form, it is in fact a mortgage, and will be considered as such in further reference to it, and the only consideration for it was the antecedent debts owing from the Johnsons to the Forest City National Bank. The demand note for $3,100 and the mortgage securing the same also had no other consideration than the antecedent debts owing from the Johnsons to the First International Bank of South Bend, Wash.
The mortgage given to the First International Bank of South Bend, Wash., was duly and fully recorded on the 10th day of December, 1912, in the office of register of deeds of Oliver county, N. D. It thus appears that the mortgage to it was actually recorded more than a year and four months prior to the time of the recording of the mortgage in question to the Forest City National Bank.
Section 5594, Compiled Laws 1913, in part is as follows:
“Every conveyance by deed, mortgage or otherwise, of real estate within this state, shall be recorded in the office of the register of deeds of the county where such real estate is situated, and every such conveyance not so recorded shall be void as against any subsequent purchaser in good faith, and for a valuable consideration, of the same real estate, or any part or portion thereof, whose conveyance, whether in the form of a warranty deed or deed of bargain and sale, deed of quitclaim and release, of the form in common use or otherwise, is first duly recorded.”
Section 5595, Compiled Laws 1913, defines the term “conveyance” and the word “purchaser.” The section reads as follows:
The deed from Johnson to the Forest City National Bank was dated May 13, 1910, and deposited for record with the register of deeds of Oliver county on the 2d day of April, 1912, and, on the last date, certified as to delinquent taxes by the county auditor of said county to the effect that all delinquent taxes were paid and transfer of the premises was entered in his office. The fees for the recording of the deed were not paid in advance at the time of depositing it for record, but were paid on the 19th day of May, 1914. The mortgage to the First International Bank of South Bend was fully recorded on the 10th day of December, 1912. Which, then, of the two conveyances is a prior lien on the land in question?
[1] The answer to this question presents two propositions the disposition of which is decisive of the case. First proposition is: Under a law which provides, in effect, that the fees for recording an instrument must be paid in advance, may an instrument, which is entitled to be recorded, be said to be of record when the same is delivered to and left with the register of deeds for record unaccompanied with the recording fee? The second proposition is: Is either of the mortgages based upon a valuable consideration so that the holder thereof is in the position of a purchaser for value?
Considering the first of the propositions, we are of the opinion that an instrument required to be recorded in the office of the register of deeds is recorded when it is deposited and left with the register of deeds for the purpose of record, and, when so deposited, is accompanied by the requisite fee for spreading the same...
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Traill Cnty. v. Moackrud, 6321.
...received a valuable consideration for the note. Northern Trading Co. v. Drexel State Bank, 37 N. D. 521, 164 N. W. 151;Hanson v. Johnson, 42 N. D. 431, 177 N. W. 452;Citizens' State Bank of Enderlin v. Skeffington, 50 N. D. 494, 196 N. W. 953; 3 R. C. L. p. 940; Kahn v. Waldman, 283 Mass. 3......