mortgage (a point which seems indisputable) and that the mortgage was superior to the defendant's title through his unrecorded deed, Welles, J., who delivered the opinion saying: "The parties stand upon equal grounds, as far as the record is concerned, and the statute only gives priority to a recorded conveyance; and the mortgage being anterior to the deed must prevail over it."

In the case of Fallas v. Pierce, supra, there was a mortgage of land duly recorded on March 28th, 1859; an assignment of the mortgage executed on April 2nd, 1859, but not recorded until June 21st, 1861; a release of the mortgage by the mortgagee on August 10th, 1859, recorded on December 8th, 1860, the mortgagor having knowledge of the assignment when he took the release; a conveyance by the mortgagor to the defendant, a bona fide purchaser, executed on September 19th, 1860, but not recorded until January 10th, 1868, after the recording of the assignment hereinbefore referred to. There was also an assignment from the first assignee to the complainant, executed and recorded after the recording of the release but before the recording of the defendant's conveyance, which, we assume, gave the complainant no greater rights than the first assignee had. The complainant filed a bill to foreclose. It having been determined that the defendant could derive no advantage from the recording acts (ut supra) the bill was sustained.

In the case of Fleschner v. Sumpter, decided by the Supreme Court of Oregon, there was a mortgage and a subsequent deed to a bona fide purchaser, both instruments. being filed for record at the same time but the mortgage being properly acknowledged and entitled to record, while the deed was not. Foreclosure was decreed, the Court saying by Thayer, J.: "The prior recording of the prior conveyance at any time after its execution will give it precedence." This and some other phrases of the opinion suggest that the priority of the prior conveyance which is first recorded is derived from the statute. If the decision is regarded as resting solely on the operation of the recording acts it offers no authority on the problem before us but is merely an authority for an anomalous construction of the Oregon recording act. If the statement that "the prior recording of the prior conveyance I will give it pre

12 Ore. 161.

cedence" is taken as meaning that prior recording will preserve the precedence which the prior conveyance already has, from any impeachment by the recording act, then the case is authority for the same proposition as the New York and Wisconsin cases referred to, though less explicit.

In none of these cases was the fundamental question now before us, that is, whether the mortgagee's interest was legal or equitable, discussed. But, bearing in mind that in the New York and Wisconsin cases the Court distinctly recognized the entire inapplicability of the statutes and that in the Wisconsin case it explicitly stated that this left the prior conveyance in the position that it occupied by common law and equity, it is obvious that the question was squarely presented in these cases, and that the alternative of legal lien must have been assumed without debate.

These are the only cases of the sort which the writer has found. But there are a number of cases involving the same facts except for the subsequent purchaser being himself a mortgagee, which were decided in favour of the first mortgage.10 These cases might be reconciled with the theory that the lien of the mortgage is equitable, upon the principle that, both interests being equitable, the prior equity must prevail. They were not, however, decided upon that principle but upon the broad principle that the unrecorded mortgage will prevail over subsequent conveyances not first recorded, and in some of them the language of the Court expressly includes subsequent absolute conveyances. It would seem unlikely that the Courts would confine the authority of these cases to contests between mortgagees.

The second problem which we will examine is this: given an equitable interest in land, such as a constructive trust or a vendor's lien, which arises by operation of law, and a mortgage by the holder of the legal title to a bona fide mortgagee will the mortgage be superior to such equity?

None of our recording acts affect this case, for they are all alike in requiring certain conveyances and instruments affecting title to be recorded, and providing that instruments not so recorded shall be avoided or postponed as

See, however, Reasoner v. Edmundson, 5 Ind. 393, in accord with the cases cited, discovered since the article went to press. 10 Crouse v. Mitchell, 130 Mich. 347; Rumery v. Loy, 61 Neb. 755; Fort v. Burch, 5 Denio 187; Westbrook v. Gleason, 79 N. Y. 23.

to certain persons, with the addition, in some cases, of a provision that the recording of such instruments shall be constructive notice to certain persons. They do not provide that no interest in land shall be upheld against a bona fide purchaser unless evidence of it is recorded. They, therefore, leave untouched all interests in land which do not arise by a conveyance or instrument of the sort of which recording is prescribed by the statute.11 A subsequent purchaser can only prevail over such interests by virtue of the equitable doctrine of bona fide purchase.

In Parker v. Barnsville Savings Bank,12 decided by the Supreme Court of Georgia in 1899, plaintiff's husband bought land with funds belonging to her, taking title in his own name, and then executed a mortgage of the land to the defendant who had no notice of the plaintiff's rights. On a bill to enjoin the defendant from foreclosing and for other relief, it was held that the mortgage was superior to the plaintiff's equity. Little, J., delivering the opinion of the Court, said: "Section 3934 of the Civil Code declares that A bona fide purchaser for value and without notice of an equity, will not be interfered with by a Court of equity

In a word, a bona fide purchaser without notice acquires an unqualified legal right and title to the property purchased, and a Court of equity has no jurisdiction to interfere with such vested legal right and title. A mortgagee who in good faith parts with his money, in ignorance that a person other than the holder of the legal title has a secret equity in the mortgaged property, stands precisely in the attitude of a bona fide purchaser and is entitled to the same protection. The bank then acquired a legal lien on the property, even though the mortgage may be infected with usury."

11 See McKamey v. Thorp, 61 Tex. 648, disclosing a convincing line of cases to the effect that a judgment or attachment creditor. relying on the recording acts, cannot prevail over an equitable estate arising by operation of law, but that a bona fide purchaser, relying on equitable doctrines, will prevail. See also, Hartsock v. Russell, 52 Md. 619; School Dist. v. Peterson, 74 Minn. 122; Floyd v. Harding, 28 Gratt. 401. Note that the cases examined in the text ignore the recording acts and apply the equitable doctrine. See, however, Riley v. Martinelli, 97 Cal. 580, dictum contra.

Compare the following cases applying the same principle to a title acquired by adverse possession: Faloon v. Simshauser, 130 Ill. 649 Schall v. Williams Valley R. R. Co., 35 Pa, St. 191; McGregor v. Thompson, 8 Tex. Civ. App. 32.

12 107 Ga. 650.

In the case of Simpson v. Del Hoyo,13 decided by the Court of Appeals of New York in 1883, the same principles were applied in favour of an assignee of a mortgage. A fraudulent grantee of land mortgaged it to one who had notice of the fraud, who in turn assigned the mortgage to a bona fide purchaser. In a suit by the assignee to foreclose, the Court held the assignee superior to the rights of the defrauded vendor of the mortgagor. Earl, J., delivering the opinion of the Court, said: "It is a familiar rule of law that a fraudulent purchaser of real or personal property obtains the legal title to the property purchased, and that he may convey a good title to any bona fide purchaser from him for value. He may not only convey the property, but he may deal with it as owner, and may mortgage it; and whoever purchases the property or takes a mortgage thereon from him or under him, in good faith, for value, or deals with him in good faith in reference thereto, will be protected against the claims of the defrauded vendor. The real estate may be conveyed, or a mortgage thereon may be assigned to several successive participants in the fraud, or several successive mala fide purchasers. But the moment the real estate or the mortgage reaches the hands of a bona fide purchaser for value, the rights and equities of the defrauded owners are cut off."

In Fisk v. Potter,14 decided by the same Court in 1865, we find a peculiar application of the same principles. The plaintiff sold land on credit and conveyed it, by a deed not reserving a lien or disclosing that the price was not paid, to a railroad company, which had previously executed a mortgage of all its property, then owned or thereafter to be acquired, to trustees to secure an issue of bonds, neither the trustees nor the purchasers of the bonds having any notice of the grantor's rights until foreclosure was begun. The mortgage was thereafter foreclosed (the plaintiff not being made a party) and the land in question sold to the defendant, who had notice of the plaintiff's claim before

13 94 N. Y. 189. The Courts below decided against the assignee on the ground that he was an assignee of a non-negotiable chose in action and therefore stood in the shoes of his assignor. The Court of Appeals held this principle inapplicable as between the assignee and a claimant of the land adverse to the mortgage. For a discussion of the dual nature of a mortgage as a chose in action, considered internally, and an interest in land, considered externally, see 10 Mich. L. Rev. 606-7.

142 Keyes 64.

he completed his purchase and who, therefore, depended for priority upon priority in the mortgagees. On a bill by the grantor to enforce a lien on the land it was held that the mortgage was superior to this lien. Potter, J., delivering the opinion of the Court, after disposing of a question of waiver adversely to the plaintiff, proceeded as follows: "But I am not willing to decide this case alone upon the ground I have been considering, as it was not the ground taken by the Referee who decided the case; and, suppose I am in error in the view I have taken, then,-The legal title of the land in question, upon which plaintiff's conveyance was made to the railroad company, vested in the latter. At the same instant, the lien of the mortgage which had before that been given by the railroad company, and which, before that time, remained but an equitable claim upon rights to be acquired,' according to the case of Seymour v. The Canandaigua and Niagara Falls Railroad Company (25 Barb. 308),15 became a vested legal right upon the premises in question. Assuming, now, for the purpose of the argument, the position urged by the plaintiff, that he did not intend to waive his equitable lien for the purchase-money, all he can then claim is, that his equitable lien attached at the same instant of time with the mortgage lien. The learned

Referee assumes, in his decision, that both these liens were mere equitable ones. I think this was not so as regards the mortgage. This mortgage was executed in pursuance of an express provision of a statute of the State. It therefore became a legal mortgage, created for a legal purpose, and its lien must have been a legal lien upon all the premises it covered... Upon the question of the superiority of liens, between such as are called legal and those which are called equitable, it is a maxim, coeval with the law of equity, that where equities are equal the law must prevail.' In Hargrave and Butler's notes to Coke upon Littleton, 290 b, the rule is thus laid down: If a person has the legal estate or interest in the subject-matter in contest, he must, neces

15 The case cited proceeds distinctly on the theory that, while in general a mortgage of land to be acquired creates but an equitable lien on such land, when it is acquired, by reason of the rule of law that one cannot grant what he does not own, yet, in the case of a railroad company which has a franchise authorizing it to acquire the land necessary for its purposes and which mortgages its franchise, the after acquired land stands on the same footing at law as the land owned at the time of the mortgage and is subject to the lien of the mortgage.