McDuff Estate v. Kost, 1027.

• Decision Date: 29 January 1932
• Docket Number: No. 1027.,1027.
• Citation: McDuff Estate v. Kost, 52 R.I. 136, 158 A. 373 (R.I. 1932)
• Parties: McDUFF ESTATE v. KOST.
• Court: Rhode Island Supreme Court

158 A. 373

McDUFF ESTATE

v. KOST.

No. 1027.

Supreme Court of Rhode Island.

Jan. 29, 1932.

Appeal from Superior Court, Kent County; Hugh B. Baker, Judge.

Suit by the Henry C. McDuff estate against Charles M. Kost. From a decree dismissing bill of complaint, plaintiff appeals.

Appeal denied, and decree affirmed, and cause remanded.

James E. Brennan, of Pawtucket, and Raymond D. Brennan, of Providence, for complainant.

Christopher J. Brennan, of Providence, for respondent.

SWEENEY, J.

This cause is before the court on complainant's appeal from a final decree entered in the superior court dismissing the bill of complaint after hearing upon bill, answer, and proof. The reasons assigned for the appeal are that the decree is against the law and the evidence.

The bill is brought to restrain respondent from levying an execution against Albert H. Martin and his wife, Lillian, upon real estate owned by her and upon which complainant has mortgages. The principal question raised by the pleadings and the evidence is whether, under section 4268, G. L. 1923, requiring mortgages to be recorded, an attachment on real estate made without notice of an unrecorded mortgage thereon will take precedence over the mortgage.

Complainant is engaged in the sale of building materials and in financing land developments. Mr. Martin is a contractor and builder. Complainant agreed to finance Mr. and Mrs. Martin in building three houses. To carry out this agreement complainant paid the balance due on three lots of land the Martins had agreed to purchase and received a deed of each lot to Mrs. Martin. The deeds were dated September 30 and October 19 and 21, 1929. The Martins executed and delivered a mortgage for $4,000 on each lot to complainant. The mortgages were dated October 5 and 23 and November 14. The amount of each mortgage included the cash paid by complainant to procure the deed, the value of the building materials to be furnished, and the cash to be advanced. The deeds and the mortgages were kept by complainant until June 27, 1930, when they were left for record.

January, 8, 1930, respondent, Kost, commenced an action of assumpsit against the Martins by attaching all their right, title, and interest in said three lots to the amount of $3,000. The writ was duly entered in the superior court. Mr. Martin answered the case. October 4, 1930, the defendants were defaulted, and judgment was entered for respondent for $2,119.14, and execution issued thereon November 21, 1930.

Complainant's manager testified that upon the delivery of the deeds the Martins were virtually owners of the land and commenced to build houses thereon, and that complainant furnished them with building materials worth more than $8,000. He also testified that the delay in recording the deeds and mortgages was made in compliance with a request made by the Martins, who did not want a certain creditor to know they were doing business with complainant. He further testified that he did not know that the respondent had any claim against the Martins until he read of the attachment in a trade journal, and that he then caused the deeds and mortgages to be recorded.

It is alleged in the bill that respondent had full knowledge and notice of complainant's unrecorded mortgages when he attached the property. The trial justice found that this allegation was not proven and that the mortgages were void as to the respondent and did not take precedence over his attachment and execution. Complainant contends that the court erred in these findings.

Our recording statute, section 4268, G. L. 1923, provides, among other things, that every mortgage shall be void unless recorded, except as against those taking by gift or devise or those who have notice of the same. These words are clear and explicit and leave no room for doubt as to their meaning and effect

Complainant cites Carroll et al. v. Ryder et ux., 34 R. I. 383, 83 A. 845, 847, in support of its contention. This was a bill for reformation of a deed on the ground of mutual mistake in the description of the land intended to be conveyed. The court held that the complainants were entitled to relief. Before the bill was filed, and without notice of complainants' equity, a creditor of the respondents attached the land in question as the property of the respondents. The court held that the attached land stood...