property, as to secure purchase money, are concurrent liens, whether in the hands of the mortgagee or his assignees, and the record of one before the other is of no effect.1 Priority of mortgages is in some instances determined by priority of record, even in those states whose statutes do not determine precedence by the order of record. Aside from this statutory rule, priority may be determined by contract or understanding of the parties, by actual notice, and a variety of equitable considerations.3 Many of the statutes provide that mortgages shall be recorded in books kept separate from those for other instruments, and where this is the case, the record of a mortgage proper in the book for deeds is ineffectual, and this has been held in a number of instances even where the mortgage was in the form of a deed absolute, the condition of defeasance being in parol. The current of authority and the better reason, however, support the view that the record of the absolute instrument in the book of deeds sufficiently protects the rights of the grantee therein, although he be in fact only a mortgagee.5

1 Gansen v. Tomlinson, 23 N. J. Eq. 405; Vredenburg v. Burnett, 31 N. J. Eq. 229; Douglass v. Peele, Clarke (N. Y.), 563; Stafford v. Van Rensselaer, 9 Cow. 316; 1 Jones on Mortgages, §566; Howard v. Chase, 104 Mass. 249; Greene v. Warnick, 64 N. Y. 220.

Ante, §§13-15; post. §§165-168. As to priority by statute, see Moore v. Thomas, 1 Or. 201; Dungan v. Am. Life Ins. Co., 52 Pa. St. 253; Den v. Roberts, 4 N. J. L. 315; Mayham v. Coombs, 14 O. St. 110; Nat'l Bank v. Whitney, 103 U. S. 99; Burns v. Berry, 42 Mich. 176.

3 Howard v. Chase, 104 Mass. 249; Hendrickson's Appeal, 24 Pa. St. 363; Jones v. Phelps, 2 Bark. Ch. 440; Van Aken v. Gleason, 34 Mich. 477; Pomeroy v. Latting, 15 Gray, 435; Rhodes v. Canfield, 8 Paige, 545; 1 Jones on Mort. §§566-7.

▲ Calder v. Chapman, 52 Pa. St. 359; McLanahan v. Reeside, 9 Watts, 508; s. c. 36 Am. Dec. 136; Friedley v. Hamilton, 17 Serg. & R. 70, Judge Tod dissenting; Cordeviolle v. Dawson, 26 La. Ann. 534; Fisher v. Tunnard. 25 Id. 179; Brown v. Dean, 3 Wend. 213; Grimstone v. Carter, 3 Paige, 421; s. c. 24 Am. Dec. 230; Dey v. Dunham, 2 Johns. Ch. 182; Warner v. Winslow, 1 Sand. Ch. 430; Ives v. Stone, 51 Conn. 446; Gully v. May, 84 N. C. 434, 440; Purdy v. Huntington, 42 N. Y. 343; s. c. 1 Am. St. Rep. 532; Show v. Wiltshire, 65 Me. 485; Gregory v. Perkins, 4 Dev. 5).

5 Haseltine v. Espy, 13 Or. 301; Mobile Bank v. Tishamingo, 62 Miss. 250; Seymour v. Darrow, 31 Vt. 122; Clemons v. Elder, 9 Iowa, 273;

$32. Defeasances.

Frequently, where the mortgage consists of a deed absolute, with a separate defeasance, written or verbal, the question has arisen as to the effect of recording the deed alone, without any record of the defeasance; and it has been held in as many as five states that the record in such case is ineffectual for any purpose. The New York cases to this effect are based on the express terms of the statute of that state; but the others are rested largely on the reason of the matter; it being contended that such a record is not notice of a deed, because the instrument is not in reality a deed, nor is it notice of a mortgage, because the record does not show a mortgage. The current of authority, however, is that as a purchaser may rely upon the title as he finds it of record, the rights of the mortgagee in such case are fully protected, without a record of the defeasance. The record of the deed being notice of even a greater interest than the mortgagee has, sufficiently protects him; and should the mortgagor fail to record the defeasance, he is the one who must suffer the consequences, should any ensue.*

An

Grellett v. Heilshorn, 4 Nev. 526; Harrison v. Phillips, 12 Mass. 456; DeWolf v. Strader, 26 Ill. 231; Young v. Thompson, 2 Kan. 83; Kemper v. Campbell, 44 O. St. 210; Benton v. Nicholl, 24 Minn. 221. See, post, §132, where this subject is more fully presented.

In Smith v. Smith, 13 O. St. 532, the statute requiring mortgages and absolute conveyances to be recorded in separate books, was held to be merely directory, and not to vitiate the record if not made as directed. See, also, as to considerations determining the proper place of record, Beals v. Hale, 4 How. 37.

1 Pennsylvania, New York, Louisiana.

Connecticut, North Carolina and

2 Hendrickson's Appeal, 24 Pa. St. 363; Luch's Appeal, 44 Id. 519; James v. Morey, 2 Cow. 246; s. c. 14 Am. Dec. 475; Jaques v. Weeks, 7 Watts, 261; Edwards v. Trumbull, 50 Pa. St. 509; Jackson v. Van Valkenburg, 8 Cow. 260; Holcombe v. Ray, 1 Ired. L. 340, and cases cited in the last note but one of the preceding section.

8 The cases are cited in the last note to the preceding section.

4 Cogan v. Cook, 22 Minn. 137; Bailey v. Myrick, 50 Me. 171; Tufts v. Tapley, 129 Mass. 380; Stoddard v. Rattan, 5 Bosw. 378; Fielder v. Darrin, 59 Barb. 651; Digby v. Jones, 67 Mo. 104; Pico v. Gallardo, 52 Cal. 206; Newberry v. Bulkley, 5 Day, 384; Columbia Bank v. Jacobs, 10 Mich. 349; s. c. 81 Am. Dec. 792. 68

objection to the prevailing rule, and the one most strongly insisted on in the North Carolina and Connecticut cases, is that it enables the mortgagor to collusively cover up his interest in the property, and also enables the mortgagee to obtain credit on the strength of an apparent title that does not really exist.1 To prevent such an effect of the record, it has been enacted by statute in a number of the states that the mortgagee shall derive no benefit from the record of the deed, unless the defeasance is also recorded. In other states there is statutory provision that as to third parties the absolute conveyance is not defeated or affected, unless the defeasance is recorded; although this would be the general rule without any statute to that effect. In at least one state it is required that the condition of defeasance must be embodied in the instrument of conveyance itself. These statutes are of salutary effect, whether intended to protect the rights and interests of parties dealing either with the mortgagor or with the mortgagee.

§33. Assignments of Mortgages.

It has been held that the record of an assignment of a mortgage was not notice, unless expressly authorized by statute.5 The contrary has also been held; but the

1 See, post, §§136-138; Ives v. Stone, 51 Conn. 446.

Rev. Code of Del. 1874, p. 504; Rev. Code of Md. 1878, art. 66, §42; Owens v. Miller, 29 Md. 144; Comp. Stats. of Neb. 1881, p. 390; 2 Rev. Stats. of N. Y. 1875, p. 1138; Rev. Stats. of N. J., Mortgages, §21; 1 Jones on Mortg. $548.

Since the act of 1881, a written defeasance signed by the grantee, but unacknowledged and unrecorded, though contemporaneous with the execution of the deed absolute, is not admissible in evidence to show it a mortgage, and actual notice of it is of no avail. Sankey v. Hawley, 118 Pa. St. 30, and ee Pancake v. Cauffman, 114 Id. 13.

3 Rev. Code of Dak. 1877, §1641; Civ. Code of Cal. §§2950, 2952; Code of Ala. $2168; Rev. Stats. of Wis. §2243; Rev. Stats. of Ind. §2932; and Statutes of Mass., Maine, Penn., Mich., Kan., Oregon and W、oming. Jones v. Hudson, 23 S. Car. 494.

4 Gen. Laws of N. H. 1878, ch. 136. §2.

5 Gordon v. Rixley, 76 Va. 694, 701; Watson v. Dundee, 12 Or. 474; Oregon Trust Co. v. Shaw, 5 Saw. 336; Dixon v. Hunter, 57 Ind. 278; Reeves v. Hayes, 95 Ind. 521.

6 Pepper's Appeal, 77 Pa. St. 373; post, §§174, 209.

question is now settled by statute in a large number of the states.1 The assignee is usually regarded as a purchaser entitled to the protection of the recording acts against a prior unrecorded mortgage of which his assignor had actual notice, but of which he had none.2 Unless the assignment is recorded, it is invalid against a subsequent purchase, without notice, of the mortgage from the mortgagee,3 but its record is not necessary as against a purchaser of the property from the mortgagor.4 As against such latter purchaser, the record of the mortgage itself is notice, and a failure to record the assignment does not blot out the record of the mortgage. The record of an assignment is not notice of it to the mortgagor, so as to invalidate payments subsequently made by him to the mortgagee. This rule is declared by

1 See Rev. Stats of Ind. 1881, §1093; Hittell's Cal. Codes. $7934; Civ. Code of Dak. $1735; Rev. Stats. of Tex. §4331; Rev. Code of Md. (1878), art. 44, §§37, 38; Belden v. Meeker, 47 N. Y. 307; Bowling v. Cook, 39 Iowa, 200; Stein v. Sullivan, 31 N. J. Eq, 409; Smith v. Keohane, 6 Bradw. (Ill.), 585; post, §174; Jones on Mort. §472.

2 Westbrook v. Gleason, 79 N. Y. 23; Decker v. Boyce, 83 N. Y. 215; 1 Jones on Mort. $275.

One who, in good faith and for value, takes an assignment of a recorded mortgage, is not bound by a prior agreement that the mortgage should not be recorded, though its record was a fraud on other parties who relied on such agreement. Cook v. Stone, 63 Iowa, 352.

3 Henderson v. Pilgrim, 22 Tex. 464; The Conn. Co. v. Talbot, 113 Ind. 373; James v. Johnson, 6 Johns. Ch. 417; Bowling v. Cook, 39 Iowa, 200; Bacon v. Van Schoonhoven, 19 Hun. 158; s. c. 87 N. Y. 446.

4 Oregon Trust Co. v. Shaw, 5 Saw. 336; Campbell v. Vedder, 3 Keyes, 174. Under certain circumstances, however, a failure to record the assignment will subject the assignee to the equities of a junior mortgagee. See Parmenter v. Oakley, 69 Iowa, 388; s. c. 28 N. W. Repr. 653. And where the assignee had failed to record his assignment, and the mortgagee discharged the mortgage of record, the rights of an innocent purchaser of the property prevailed over those of the assignee. Ladd v. Campbell, 56 Vt. 529. See also, Daws v. Craig, 62 Iowa, 515; Clark v. Mackin, 30 Hun. 411; Girardin v. Lamp, 58 Wis. 267; and, contra, Brayley v. Ellis, 71 Iowa, 155; s. c. 32 N. W. Repr. 254.

5 Enos v. Cook, 65 Cal. 175; s. c. 3 Pac. Repr. 632; Sprague v. Rockwell, 51 Vt. 401; Bridges v. Bidwell, 20 Neb. 185; s. c. 29 N. W. Repr. 302; Viele v. Judson, 82 N. Y. 32; 1 Jones on Mort. $474.

Hubbard v. Turner, 2 McLean, 533; N. Y. Life Co. v. Smith, 2 Barb. Ch. 82; Murray v. Lylburn, 2 Johns. Ch. 443; Ely v. Schofield, 35 Barb. 330.

statute in a number of states, while in a few it is declared, to the contrary, that such record is notice to all persons, including the mortgagor.2 It is said that the reason of the rule is that the mortgagor should be saved the necessity of examining the records every time a payment is to be made; a rather unsatisfactory one for an exception to a leading principle of registration, that a record authorized to be made, and duly made, is notice to the world.

§34. Release and Discharge of Mortgages.

A release of mortgaged premises is a conveyance affecting real estate, which must be recorded to be valid against a subsequent purchaser of the mortgage for value and without notice.3 In a majority of the states special provision is made by statute for entering satisfaction and discharge of mortgages; usually by an entry at the foot,

Where the assignment was not recorded, and the mortgagor made a part payment to the mortgagee, which was not credited, either on the notes or the mortgage, it was held that the rights of the assignee were not affected by such payment. Had the mortgagor demanded a proper credit of the payment, this would have disclosed that the notes and mortgage had been assigned. This case said not to conflict with the rule laid down in Bowling v. Cook, 39 Iowa, 200, and Carnog v. Fuller, 30 Id. 212; Brayley v. Ellis, 71 Iowa, 155; s. c. 32 N. W. Repr. 254.

An assignment of a mortgage was written on the back of it, reciting that it was an assignment of "the within mortgage." It was recorded in the same volume with the mortgage, but on a different page, with cross-references from one to the other-and the record was held sufficient. Soule v. Corbley (Mich.), 31 N. W. Repr. 785; 8 West. Repr. 151. For further cases on this subject, see post, $174.

Though the statute provides for recording assignments of mortgages, yet an equitable assignment held not within nor affected by the statute. Byles v. Tome, 39 Md. 461; Rev. Code, art. 44, §§37, 38. An innocent assignee for value, ordinarily takes subject to the equities existing between the mortgagor and mortgagee. Moffatt v. Hardin, 22 S. Car. 9.

1 Howell's Stats of Mich. $5687; Rev. Stats of Wisconsin, §2244: Gen. Stats. of Minn. 1878, ch. 40, §24; Stimson's Am. Stat. Law, §1870; Ely v. Schofield, 35 Barb. 330.

2 Rev. Stats. of Ind. 1881, §1094; Rev. Stats. of N. J., 1877, Mortgages, §32; Jones on Mortgages, §473. See post, §§174, 203, 209.

3 Mutual Life Ins. Co. v. Wilcox, 55 How. Pr. (N. Y.), 43; Blunt v. Morris, 123 Mass. 55; Jones v. Chamberlain, 5 Heisk. (Tenn.), 210; Palmer v. Bates, 22 Minn. 532.