Lamberton v. Merchants' Nat. Bk., Winona

• Decision Date: 27 November 1877
• Citation: 24 Minn. 281
• Court: Minnesota Supreme Court
• Parties: H. W. LAMBERTON <I>vs.</I> MERCHANTS' NATIONAL BANK OF WINONA.

24 Minn. 281

H. W. LAMBERTON vs. MERCHANTS' NATIONAL BANK OF WINONA.

Supreme Court of Minnesota.

November 27, 1877.

Appeal by defendant from an order of the district court for

Wabasha county, Mitchell, J., presiding, overruling a demurrer to the complaint in this action.

C. H. Berry, for appellant.

Wilson & Taylor, for respondent.

GIFILLAN, C. J.

From the complaint it appears that one Mead was the owner of certain real estate in Wabasha county, and on August 5, 1876, conveyed it to one Phillips, and Phillips afterwards conveyed to plaintiff. September 20, 1876, a judgment recovered by defendant against Mead was docketed in Wabasha county. Phillips was then in possession of the real estate, but his deed had not been recorded. Defendant sold under its judgment and bid in the property, and this action is to set aside the sale.

The possession of Phillips was notice of his title, and the question is, whether a prior unrecorded deed, or a docketed judgment against the grantor, with notice to the judgment creditor of the unrecorded deed, shall prevail.

No case has yet been before this court in which the effect of notice to the judgment creditor was in question.

Prior to the act of August 3, 1858, the statute made an unrecorded deed void, "as against any subsequent purchaser in good faith, and for a valuable consideration, of the same real estate, or any portion thereof, whose conveyance shall be first duly recorded." By the act of 1858 such unrecorded deed "shall be void as against any subsequent purchaser in good faith, and for a valuable consideration, of the same real estate, or any portion thereof, whose conveyance shall be first duly recorded, or as against any attachment levied thereon, or any judgment lawfully obtained at the suit of any party against the person in whose name the title appears of record, prior to the recording of such conveyance." Prior to this act the attachment or judgment became a lien only on the actual interest of the debtor as it existed at the levy of the one, or docketing of the other, and was not affected in any way by the registry act. Greenleaf v. Edes, 2 Minn. 226, (264.) The act changes the law only as to attachments and judgments. As it stood before, a purchaser with notice of the unrecorded deed took only such estate or interest as his grantor had to convey, and it is the same with a purchaser now.

The question presented under the act of 1858 is, did the legislature intend to place the attaching or judgment creditor in the same position as a purchaser, whose claim to be preferred under the statute may be defeated by notice, or did it intend to prefer such creditor, even though he has notice of the unrecorded deed?

That notice shall prevent the preference of a subsequent purchaser is expressly provided by the insertion in the statute of the words, "in good faith." These words were not repeated as a qualification of the rights of a creditor when the provision in favor of creditors was inserted, and, as the act stands, they do not grammatically apply to any but purchasers. Construing the statute by the letter, the attaching or judgment creditor is not affected by notice of a prior unrecorded deed. But registry acts furnish striking instances of the interpretation of statutes according to the general intention of the legislature, rather than according to the strict language.

The statute of 7 Anne, c. 20, enacted that any deed "shall be adjudged fraudulent and void against any subsequent purchaser or mortgagee for valuable consideration," unless a memorial thereof shall be registered before the registry of the deed or conveyance under which such subsequent purchaser or mortgagee makes claim. Although, by the terms of this act, the subsequent purchaser or mortgagee, if for a valuable consideration, even though he had notice, was preferred to the unregistered deed, it was held by Lord Hardwick, in Le Neve v. Le Neve, 3 Atkyns, 646, that in equity such purchaser or mortgagee takes subject to the rights of the grantee in the unregistered deed; and the decision in that case has been followed in England and generally in America ever since.

The statute in Massachusetts provided that no alienation of lands, unless made by deed acknowledged and registered should be valid except against the alienor and his heirs. In Farnsworth v. Childs, 4 Mass. 636, the court said: "The registry of a deed was required to give more general notice of a conveyance than would result from livery of seisin, which was prescribed by the common law for the purpose of notice. But if a second purchaser has in fact notice, the intent of the registry is answered, and to permit him to hold against the first purchaser would convert the statute into an engine of fraud instead of a protection against it."

This construction of the statute has always been followed. Davis v. Blunt, 6 Mass. 486; Prescott v. Heard, 10 Mass. 60; Priest v. Rice, 1 Pick. 164. The last three were cases of attachment or execution creditors, claiming preference over unregistered conveyances.

The statute in Vermont was precisely similar to that in Massachusetts, and the decisions of the courts have been the same as in that state. Rublee v. Mead, 2 Vt. 544; Stewart v. Thompson, 3 Vt. 255; Brackett v. Wait, 6 Vt. 411; Corliss v. Corliss, 8 Vt. 373; Griswold v. Smith, 10 Vt. 452. The first of these cases was that of an attachment creditor claiming a preference.

In Connecticut the statute provided that a deed should "not be good and effectual in law against any other person or persons whatsoever but the grantor or grantors, and their heirs only, unless recorded at length," etc. In French v. Gray, 2 Conn. 98, it was held, by a divided court, that under this statute an unrecorded deed was not valid against any one who was a stranger, even though he claimed no title. This decision was overruled in Barnum v. Landon, 25 Conn. 149, the court holding that an unrecorded deed is good against every one but creditors or subsequent grantees. That notice will defeat the preference of them is fully settled. Wheaton v. Dyer, 15 Conn. 311; Bush v. Golden, 17 Conn. 594; Hamilton v. Nutt, 34 Conn. 501; Moor v. Watson, 1 Root, 388. The last of these cases was that of an attachment creditor. In Wheaton v. Dyer the court said: "It has long been settled that the object of the registry is to give notice of the title. Hence, if a person with actual knowledge of a prior unregistered deed takes a conveyance of the same property, he takes subject to the prior deed."

The statute in New Hampshire was the same as in Connecticut, and it is held that "an attachment or purchase made with the knowledge of the existence of a prior unrecorded deed secures no rights against the holders of such deed." Montgomery v. Dorion, 6 N. H. 250; Rogers v. Jones, 8 N. H. 264; Brown v. Manter, 22 N. H. 468.

In Maine the statute, by its terms, made an unrecorded deed void against every one but the grantor and his heirs, but it is held that an attachment, the creditor having notice, does not prevail over an unrecorded deed. Stanley v. Perley, 5 Greenleaf, 369; Webster v. Maddox, 6 Greenleaf, 256; Matthews v. Demerritt, 22 Me. 312.

In New York the statute originally made an unrecorded deed void as against a subsequent purchaser whose deed should be first duly recorded; but since the case of Jackson v. Burgott, 10 John. 456, it has always been held there that an unrecorded deed was good against a subsequent purchaser with...