Cambridge Valley Bank v. Delano

There were three clear mistakes in respect to charging the mortgage for $2,160, now sought to be foreclosed, upon the lands allotted by the judgment in partition to Susan A. and Sarah A. Mather: First, in the report of the

The principle of equity is well established that a purchaser of land is chargeable with notice, by implication, of every fact affecting the title, which would be discovered by an examination of the deeds or other muniment of title of his vendor, and of every fact, as to which the purchaser, with reasonable prudence or diligence, ought to become acquainted. If there is sufficient contained in any deed or record which a prudent purchaser ought to examine, to induce an inquiry in the mind of an intelligent person, he is chargeable with knowledge or notice of the facts so contained. With the most careful scrutiny, we look in vain for anything in the commissioners’ report or the judgment in partition, or the proceedings for the sale of the share allotted to the infant

It is supposed, however, that the deed to Delano develops matter which ought to put a prudent person on inquiry. The deed from the infant, by'her guardian, has no reference to any mortgage, so far as the evidence or the report disclose. The other deed, that from Lucina Gale and Susan A. Mather, refers to a mortgage which had been a specific lien at the date of the agreement to purchase, but was satisfied of record three days prior to the date of the deed. Why should John Cornes or Buel P. Barnes have any reason to suspect that there was another mortgage, or even to doubt that the other mortgage mentioned, that to the loan commissioners, was the only remaining incumbrance that had been created by the owners prior to Delano ? They had no occasion to search the records of Orleans county. Nor can we perceive any occasion to make inquiry of the president or other officer of the Lockport Bank and Trust Company. That bank had just satisfied a mortgage which had been a lien specifically on the land in Niagara county. Surely this fact gave rise to no cause of suspicion that the bank had not been paid, or that the bank held another mortgage which was a charge on the land so purchased. They had no cause to inquire even who had paid that mortgage. It might well be presumed that Delano had paid it, as the deed required him to do so, although executed subsequently to the satisfaction of the mortgage. It was a subject of private arrangement between the parties to that deed, with which subsequent purchasers had no concern. It was sufficient for them that a mortgage assumed by the deed in express and definite terms, as well as by an exact and formal description of date, parties, amount and place of record, was satisfied and dis

With regard to equities between the plaintiff, Sarah C. Worrell, and her aunts, Susan A. and Sarah A. Mather, in respect to the payment of the sums charged upon the shares allotted to them, as between them and her father Robert Worrell, on the partition of the land, we have nothing to do. They are not parties to either action. Our inquiry here has reference only to adjusting the order of sale of the premises, if the lands in Niagara county had been proven to be, in fact, chargeable.

Nor is the case fully before this court as to the rights and equities existing between the said Sarah C. Worrell, plaintiff, and the Exchange Bank, as owners of the two mortgages for $o,832 each, assigned by Susan A. and the guardian of Sarah A. Mather, and executed by Delano to them, as part of the consideration of the conveyance, to him.

As against the mortgage of Buel P. Barnes to the Exchange Bank, for $12,000, and the title acquired on the sale under the foreclosure of the last mentioned mortgage, the said Sarah 0. Worrell appears, on the evidence before this court, to have no equities, for the same reasons that are applicable to the title acquired by Oornes and Barnes. We render no judgment on that branch of the case.

All that portion of the judgment appealed from, which provides for the foreclosure and sale of the mortgaged premises situate in Orleans county, particularly mentioned in the complaint of the Cambridge Valley Bank, plaintiff, and for the costs of that bank in the said two actions tried together, should be affirmed, with the costs of the Cambridge Valley Bank on the appeals to the Supreme Court and to

The residue of the said judgment, after the description of the premises in Orleans county, mentioned and described in the mortgage sought to be foreclosed in the action of the Cambridge Valley Bank, plaintiff, should be reversed, and a new trial ordered in the action of Sarah C. Worrell, plaintiff, with costs to abide the event.

The referee found that the appellants had no actual notice that the mortgage held by the Cambridge Valley Bank was in any way a lien upon the lands in Niagara county; but he held, as a matter of law, that the appellants had constructive notice thereof, by reason of the proceedings in partition, and the proceedings to sell the real estate of Sarah A. Mather, an infant, and hence, that they were not entitled to the protection of purchasers in good faith, for value.

The learned judge who wrote the opinion of the General Term held that the proceedings referred to did not give the constructive notice, but that the deed from Lucina Gale and Susan A. Mather did, and the judgment was thus affirmed for a reason different from that assigned by the referee.

Constructive notice, as defined by Judge Story, is in its nature no more than evidence of notice, the presumption of which is so violent that the court will not even allow of its being controverted. (Story’s Eq. Jur., § 399.) In 2 Wash, on Beal Prop., 596, the author says: “ In regard to the extent to which a purchaser is bound by constructive notice, and what a purchaser by a subsequent deed is presumed to know, the rule is, that the law imputes to the purchaser a knowledge of all the facts relating to the same land, appearing at the time of his purchase upon the muniments of title, which it was necessary for him to inspect, in order for him to ascertain the sufficiency of such title; and if an ordinarily diligent search would bring to an inquirer a knowledge of a prior incumbrance or alteration, he is presumed to know of them.”

It will not do to carry this doctrine of constructive notice

There is nothing in the proceedings in partition to lead the most cautious person to suspect that the mortgage in question was in any way charged upon the lands in Eiagara county. It is not even mentioned. The only mortgages mentioned are the loan office mortgage and the mortgage for $1,690, given to the Lockport Bank and Trust Company, both recorded in the clerk’s office' of Eiagara county, and both at that time unsatisfied upon the record. These two mortgages, to make equality of partition, were charged in different proportions upon the lands allotted to Susan A. and Sarah A. Mather, and there is nothing in the proceedings to excite a suspicion even that there was any mistake as to the mortgages.

In the proceeding to sell the estate of the infant, Sarah A. Mather, there is no mention whatever of the mortgage recorded in Orleans county. The petition to the Supreme Court simply alleges that the premises are subject to and charged with the payment of about $2,000, upon two mortgages both due, and that the holder of one of them requires payment. An order appointing a special guardian and a reference was made, and the referee made his report, in which he stated that the premises were subject to two mortgages—one of them to the Lockport Bank and Trust Company, upon which there was due about $1,600, and that the purchaser should be required to pay off said mortgages and give a mortgage

This report was confirmed and a conveyance ordered in pursuance of its terms. Afterward a deed was given by the special guardian to Delano, in which payment of the consideration was acknowledged in the usual form; but the deed contained no reference to any mortgage. The mortgage to secure the balance of $5,832.48, with interest from May 11, 1855, was given and recorded. By examining these proceedings, these are all the facts any person would learn in reference to any mortgage. He would have reason to suppose that Delano took possession of the estate on the 11th of May, 1855, and that he purchased it, as of that date, as he was to pay the amount due upon the two mortgages at that date, with interest, and he was to pay the balance of the purchase-money, with interest from that date. He would find at that date but two mortgages, the loan office mortgage and the $1,690 mortgage, both satisfied of record before the deed was given, the latter June 8, and the former ¡November 11, 1855, and hence neither of them mentioned in the deed. Having found that the only two mortgages upon the record were satisfied, he would have no occasion or reason to look further. The agreement reported by the special guardian and the order of the court required that the two mortgages referred to in the proceedings should be paid down, and any one examining the records and finding all the mortgages appearing there satisfied, would have the right to suppose, and rest with entire confidence upon the belief, that the agreement and the order of the court had been complied with, and that the mortgages had been paid and satisfied. There was nothing to awaken a suspicion in the mind of a prudent, or even of a very vigilant person, that there remained any mortgage that was in any way a charge upon

It only remains to he considered whether notice of the lien of the mortgage in question is to be imputed to the appellants from anything contained in the deed from Lucina Gale and Susan A. Mather to Delano. This deed was dated June 11, 1855, and was subject to the payment by Delano of the loan office mortgage, and the mortgage for $1,690, recorded in book of mortgages No. 16, on page 481, in the clerk’s office of Niagara - county. The deed makes no mention of or allusion to the mortgage for $2,160; but the learned judge who wrote the opinion at General Term held that, inasmuch as the deed bound Delano to pay a mortgage to the Lockport Bank and Trust Company, and the mortgage described had been satisfied of record before the date of the deed, there was sufficient to put a purchaser who examined the records and learned these facts upon inquiry; and that by inquiring of the Bank and Trust Company, or of Delano or his grantors, he would have learned of the existence of the mortgage in question, and the facts constituting it a lien upon the lands in Niagara county. I cannot concur in these views.

In all the records in Niagara county, there is no mention or hint even of the existence of the mortgage in question. In the partition proceedings commenced in 1852, the only mortgages mentioned and provided for were the two mortgages mentioned in the deed to Delano. The same is true of the proceedings for the sale of the infant’s real estate. These mortgages are mentioned not once only, but several times, in proceedings conducted by parties supposed to be familiar with the title to the land, and under circumstances which forbid any presumption of mistake. A purchaser from Delano looking at the records would find these facts, and also that- these same mortgages are assumed to be paid by Delano in his deed as part of the purchase-money. But the deed does not state how much is thus assumed, nor how much was at the date of the deed due

I therefore hold that there was nothing in this deed from which the law could impute to the appellants notice of the mortgage in question.

All concur.

Judgment in accordance with opinion of Leonard, C.