Morris v. Beecher
| Decision Date | 12 May 1890 |
| Citation | 45 N.W. 696,1 N.D. 130 |
| Parties | Morris v. Beecher et al. |
| Court | North Dakota Supreme Court |
1. Mortgagee in a lost, and for that reason unrecorded, mortgage, having executed and recorded an instrument certifying that such mortgage had been paid and satisfied, cannot reinstate the prior lien of his mortgage as against an innocent assignee for value of a second mortgage, who buys relying upon the satisfaction as an extinguishment of the prior mortgage, although the mortgagees in the second mortgage knew of the unrecorded mortgage, and took their lien expressly subject to it.
2. The fact that, about the time of the execution and recording of the satisfaction, another mortgage, for about the same amount as the unrecorded mortgage, given to the same mortgagee, by one who had assumed the unrecorded mortgage, but given subsequently to the second mortgage, was executed and recorded, is not sufficient to put the purchaser of the second mortgage upon inquiry as to whether the unrecorded mortgage had in fact been paid and satisfied, as against the recorded satisfaction given by the first mortgagee, although such substituted mortgage recites that the property is free from all incumbrances.
Appeal from district court, Cass county; William B. McConnell, Judge.W. P. Miller and Ball, Wallin & Smith, for appellant. Francis & Southard, ( Thomas & Davis, of counsel,) for respondent.
This controversy presents conflicting claims of the plaintiff, and of the defendant Elizabeth McKnight to certain real estate. Each asserts title under foreclosure of a different mortgage upon the same land. The effort of each, therefore, is to sustain the priority of the mortgage under which he or she claims title. The plaintiff in 1881 was the owner of the property in question. On the 27th of June of that year he conveyed the same to Beecher & Dean, taking back a purchase-money mortgage for $4,500 upon the land, which, however, was never recorded, having been subsequently lost. Beecher & Dean on the 14th of September, 1882, conveyed the premises to Eugene McKnight, who assumed this unrecorded mortgage, and gave back to Beecher & Dean a purchase-money mortgage, which in express terms was made subject to the unrecorded mortgage. Dean thereafter assigned to Beecher his interest in the mortgage given to Beecher & Dean. Eugene McKnight having bought the land subject to the unrecorded mortgage, and having assumed the same, and the mortgagee therein, the plaintiff in this action, being without satisfactory evidence of his mortgage lien, it was agreed that McKnight should give this plaintiff another mortgage on the land as a substitute for the lost mortgage, “and to stand in place thereof, and to evidence the existence thereof.” This new mortgage was not given or received in satisfaction of the lost mortgage. This mortgage was in the ordinary form, to secure $4,815, and contained no reference to the lost mortgage; nor was there anything on the face of it to show that it was given merely as a substitute for such lost mortgage. It in fact appeared to be a new and independent lien on the property. It is under the foreclosure of this mortgage that plaintiff claims title. At the same time, and as part of the same transaction, plaintiff executed and delivered to McKnight an instrument which was recorded August 11, 1884, and, as the decision of this cause depends in the main upon the construction of this paper, we deem it best to set it forth fully:
The plaintiff at the time of accepting the new mortgage and executing this instrument did not in fact know of the existence of the recorded mortgage to Beecher & Dean. Beecher, being the sole owner of this mortgage by assignment from Dean of his interest, transferred the mortgage to George S. Barnes on the 3d of September, 1885. Barnes paid full value for the mortgage, and bought it in good faith, relying, through his counsel, Hon. A. D. Thomas, on the apparent satisfaction and payment of the lost mortgage, as evidenced by the instrument from plaintiff to McKnight. The record disclosed that the first mortgage had in fact been paid and satisfied, and therefore that the mortgage which he was about to purchase, although formerly a second mortgage, had become, by this instrument, a first lien on the premises. It is immaterial whether this instrument was such a paper as was entitled to record, or whether its record operated as constructive notice. Judge Thomas and Mr. Barnes agree that the whole matter was left to the former to determine what was the condition of the record, and Judge Thomas positively swears that he in fact saw and examined the record of this instrument, and was satisfied from such examination that the lost mortgage had been satisfied, and that the mortgage which Barnes contemplated purchasing was a first lien on the property; and he so advised Mr. Barnes. The finding of the court in this regard is amply sustained by the evidence. If the instrument was calculated to and did mislead Judge Thomas, who was attorney for Mr. Barnes in the transaction, the case is the same as though Barnes himself had been personally misled. It is insisted that Barnes took subject to all equities as against the mortgage in the hands of Dean,...
To continue reading
Request your trial