Swasey v. Emerson

• Decision Date: 27 February 1897
• Citation: 46 N.E. 426,168 Mass. 118
• Parties: SWASEY v. EMERSON et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

168 Mass. 118

46 N.E. 426

SWASEY v. EMERSON et al.

Supreme Judicial Court of Massachusetts, Suffolk.

February 27, 1897

COUNSEL

Geo R. Swasey and Julius Nelson, for plaintiff.

Solomon Lincoln and Francis P. Sears, for defendant Boston Safe-Deposit & Trust Co.

OPINION

HOLMES J.

Early in 1893 one Rice executed three mortgages to the Debenture Investment Company, of which the plaintiff has been appointed receiver. In January, 1894 the company assigned and delivered these mortgages and notes to the Boston Safe-Deposit & Trust Company, upon certain trusts for its creditors. The last-named company delivered them to the American Loan & Trust Company, its successor in the trusts, and a new assignment was executed by the Debenture Company to the latter. None of the assignments ever were recorded. In November, 1894, after the assignment, the Debenture Investment Company executed discharges of the mortgages to one Roett, which were dated November 1st, but acknowledged and recorded on November 12th. The report states that Roett received conveyances of the equities on or about November 1 1894. The date in the bill is November 7th, and this is said by the defendants to be the true date, which it will be seen is later than the date of the discharges. But, whatever the dates, we must assume, in accordance with the clear meaning of the report, that the discharges were made after Roett had become owner of the equities in the mortgaged land. At the same time that he received the discharges, Roett made a new mortgage of the land to Emerson, who took it in good faith, and for value relying upon the discharges and the title as it appeared in the registry.

Emerson did not demand production of the discharged mortgages or the mortgage notes, which then were outstanding in the hands of the American Loan & Trust Company. This bill is brought to establish the priority of the earlier mortgages, and the invalidity of the discharges. The justice who heard the case dismissed the bill, and reported the substance of the evidence.

The main argument for the plaintiff, in a few words, is, of course, that Emerson had notice of the mortgages, and of the possibility that the notes might have been assigned by the mortgagee, as they had been in fact, in which case the right of the mortgagee to make the discharges was at an end, and, therefore, that he was bound to call for the notes before relying on the discharges, just as a mortgage debtor is before he can pay the debt to the mortgagee with safety, or as in the case of a would-be purchaser of the mortgage debt. Biggerstaff v. Marston, 161 Mass. 101, 36 N.E. 785.

The argument for Emerson is equally obvious, and, in our opinion must prevail. When the title to land is dealt with, the intent of the registry laws is that purchasers should not be required to look beyond the registry of deeds further than is absolutely necessary. The assignment of the mortgages was a conveyance, within Pub.St. c. 120, § 4, which the assignees might have had recorded, and in that way have protected themselves. Not having been recorded, it is invalid as against Emerson, by the express terms of the statute. To give the loan and trust company a better claim against the land, as holders of the notes, than it got by the conveyance of the land, is to defeat the statute by indirection. It does not claim by way of trust, as when the note is transferred without assignment of the mortgages; and, if it did, to say that Emerson had notice of the trust, although not recorded, under Pub.St. c. 141, § 2, really is to beg the question. He only had notice that there might be one. Every grantee of land has notice that there may be a trust outstanding, but he is not...