Holloway v. Hendrick

• Citation: 129 A. 702
• Decision Date: 19 June 1925
• Docket Number: No. 38.,38.
• Parties: HOLLOWAY v. HENDRICK et al.
• Court: United States State Supreme Court (New Jersey)

129 A. 702

HOLLOWAY

v. HENDRICK et al.

No. 38.

Court of Errors and Appeals of New Jersey.

June 19, 1925.

Appeal from Court of Chancery.

Suit by J. Morgan Holloway against Frank Hendrick and another. Decree for complainant, and, defendants appeal. Affirmed.

The following is the opinion of Fielder, V. C, in the court below:

Mountain Lakes, Inc., entered into a contract with the defendant Frank Hendrick, dated March 18, 1920, whereby the former agreed to sell, and the latter agreed to purchase, three lots of land upon which the seller, by the terms of the contract, was to erect a dwelling house. The consideration named in the contract for the land and building was $22,200, of which $12,200 was to be paid in cash and the balance, $10,000, was to be paid at the time of taking title, by the purchaser "assuming and agreeing to pay a certain first mortgage of $10,000." By the terms of the contract, title was to close on or before July 1, 1920. The contract was duly recorded July 2, 1920.

Subsequently to the date of the contract, Mountain Lakes, Inc., executed a mortgage, dated April 29, 1920, to the North Jersey Title Insurance Company, to secure the payment of $15,000, covering the three lots agreed to be conveyed to Hendrick and nine other lots, which mortgage was recorded May 6, 1920. By deed dated July 1, 1920, recorded July 9 1920, Mountain Lakes, Inc., conveyed to Hendrick the three lots in question, which conveyance was expressly made subject to the mortgage for $15,000, and by deed dated July 14, 1920, recorded July 15, 1920, Hendrick conveyed two of said lots to Lillian E. Eason, who, by deed dated and recorded on the same dates, conveyed said two lots to the defendant Katherine E. M. Hendrick (wife of Prank Hendrick); both deeds being made expressly subject to said mortgage of $15,000. By release of mortgage dated November 22, 1920, recorded November 24, 1920, H. J. Hapgood, who then owned the mortgage by assignment, released to Mountain Lakes, Inc., for the consideration of $5,000, all lots covered by the mortgage except the three conveyed to the defendant Prank Hendrick, leaving said three lots subject to the balance of $10,000 secured by said mortgage. The mortgage was thereafter assigned to the complainant, who by this suit seeks its foreclosure, claiming $10,000 and interest due thereon. The complainant is a stranger to all the transactions herein mentioned and is bound only by such notice as the record gives.

The first defense presented is that the mortgage, the deed from Mountain Lakes, Inc., to Frank Hendrick, and the release of mortgage, were not properly acknowledged because the person who, as a foreign commissioner for New Jersey in New York, certified such acknowledgments, was not such a commissioner, and therefore these instruments were not properly recorded and are not notice to any one. The only proof offered by the defendants to show that the certifying commissioner was not, in fact, such commissioner, was a certificate under the hand and seal of the secretary of state of New Jersey, purporting to certify such fact. The offer of such certificate in evidence was rejected as not proper evidence of the fact sought to be proved. Even were the acknowledgments defective and were these instruments not proper, for that reason, to be recorded, and therefore not constructive notice to any one, the defendants had actual notice of the mortgage because it is recited in their deeds: and the deed from Mountain Lakes, Inc., to Hendrick is good as between the grantor and grantee, without any acknowledgment, and it does not appear that any one has questioned the defendants' title thereunder; and the release of mortgage is valid between the releasor and the mortgagor, without an acknowledgment, and it does not appear that any one, other than the defendants, question its effect as a valid release of the mortgage lien. In his bill of complaint, the complainant admits notice of the deed and the release of mortgage.

The defendants claim that the instruments mentioned, and the various assignments through which the mortgage came into the complainant's ownership, were not properly proved on the hearing of this cause; the basis of their contention being that they gave due notice to the complainant before the hearing, under Comp. Stat. p. 1555, § 56, that they would require the complainant to produce the original instruments, instead of the record thereof. Why the record would not have been sufficient proof and the reason for the demand is not apparent from anything in the case; but in compliance with the demand, the complainant did produce all...