This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
An "assignment of mortgage," that is, a transfer of the debt secured by mortgage, together with an express transfer of the mortgage security,97 is usually regarded as within the operation of the recording acts, this being sometimes expressly provided by statute.98 The requirement that such an assignment shall be recorded does not render an unrecorded assignment invalid, but it prevents the assignee from asserting any rights by reason of the
T. Wheeler, 61 N. Y. 88; Reid v. Sprague, 72 N. Y. 457; Owen v. Evans, 134 N. Y. 514, 31 N. E. 999; Central Trust Co. of New \ork v. West India Improvement Co., 169 N. Y. 314, 324, 62 N. E. 387; Kernohan v. Durham, 48 Ohio St. 1, 12 L. R. A. 41, 26 N. E. 982 (semble); Patterson v. Rabh, 38 S. C. 138, 19 L. R. A. 831, 17 S. E. 463.
96. Lockwood v. Noble, 113 Mich. 418, 71 N. W. 856.
97. Ante, Sec. 628(b).
98. Newman v. Fidelity Savings & Loan Ass'n, 14 Ariz. 354. 128 Pac. 53; Connecticut Mut. Life Ins. Co. v. Talbot. 113 Ind. 373, 3 Am. St. Rep. 655, 14 N. E. 586; Bank of Indiana v. Anderson. 14 Iowa, 544, 83 Am. Dec. 390; Swasey v. Emerson, 168 Mass. 118,
60 Am. St. Rep. 368, 46 N. E. 426; Robbins v. Larson, 69 Minn. 436. 65 Am. St. Rep. 572, 72 N. W. 456; Jones v. Fisher, 88 Neb. 627. 130 N. W. 269; Bacon v. Van-Schoonhoven, 87 N. Y. 446; Hen-niges v. Paschke, 9 N. D. 489, 81 Am. St. Rep. 588, 84 N. W. 350; Pepper's Appeal, 77 Pa. St. 373; Merrill v. Luce, 6 S. D. 354, 55 Am. St. Rep. 844, 61 N. W. 43; Torrey v. Deavitt, 53 Vt. 331; Fallass v. Pierce, 30 Wis. 443. The word "conveyance" in a recording act has been held to include an assignment of mortgage. Decker v. Boice, 83 N. Y. 220: Merrill v. Luce, 6 S. D. 354, 55 Am. St. Rep. 844, 61 N. W. 43: Burns v. Berry, 42 Mich. 176, 3 N. W. 924; Contra, Mott v. Clark, 9 Pa. St. 399, 49 Am. Dec. 566;
3 R. P.- 18 assignment as against persons who, not knowing of the assignment, and seeing no assignment of record, acted on the assumption that there had been no assignment.99
In order that the assignment of a mortgage, that is, a transfer of the debt with the benefit of the security, be placed upon the records, so that the assignee may be protected, the assignment must involve an express transfer of the mortgage security, or of an interest in the mortgaged land. A transfer in terms of the debt secured carries the benefit of the mortgage security, but it is not ordinarily susceptible of record among the land records, since it does not purport to transfer any interest in land.
As between the assignee of the mortgagee's rights and the holder of another mortgage upon the same land, the assignee ordinarily takes in priority over the other mortgage if the assigned mortgage was entitled to such priority in the hands of the assignor, and only then.1 But it may happen that the assignee takes free from a mortgage to which his assignor's rights were subject, as when, while the assignor had notice of the other mortgage, the assignee has no such notice,2 or when, while the assignor had notice of equities existing in favor of the other mortgage, the assignee has no such notice.3 Or this may be the result, under the reWatson v. Dundee Mortgage & Trust Inv. Co., 12 Ore. 474. 8 Pac. 548; Hull v. Diehl, 21 Mont. 71, 52 Pac. 782. As to the construe ticn of the New York recording law in connection with the assignment of mortgages, see 6 Columbia Law Rev. 546.
99. Purdy v. Huntington, 42 N. Y. 334, 1 Am. Rep. 532; Greene v. Warnick, 64 N. Y. 220; Bridges v Bidwell, 20 Neb. 185, 29 N. W. 302; Sprague v. Rockwell, 51 Vt. 401; Building Ass'n v. Clark, 43 Ohio St. 427, 2 N. E. 846.
1. Quimby v. Williams, 67 N. H. 489, 68 Am. St. Rep. 685, 41 Atl. 862.
2. Dulin v. Hunter, 98 Ala. 539, 13 So. 301; Jackson v. Reid, 30 Kan. 10, 1 Pac. 308; Hull v. Diehl, 21 Mont. 71, 52 Pac. 782; Sprague v. Drew, - N. J. Ch. -, 6 Atl. 307; Morris v. Beecher, 1 N. D. 130. But under the New York recording law the assignment must be recorded in order to acquire such priority. Decker v. Boice, 83 N. Y. 215.
3. See ante, Sec. 628(b), note 88.
As against a purchaser of the mortgaged property after the assignment of the mortgage debt, the assignee would ordinarily be entitled to priority if his assignor was so entitled, even though the assignment is not recorded at the time of the execution or record of the subsequent conveyance. It is immaterial to the purchaser that a mortgage to which the land is subject has changed ownership prior to his purchase, and there is consequently no reason for postponing the assignee by reason of his failure to record the assignment. There are a number of decisions to this effect.8 Statements made in the courts of two or three states that it is necessary to record the assignment as against a subsequent purchaser of the land,9 are, it seems, to be viewed with reference to the circumstances of the particular case, and not as asserting a contrary doctrine.10
But under the New York rule, by which an assignment of a chose in action is subject to equities in favor of third persons, the assignee's ignorance of equities in favor of another mortgagee is immaterial. Crane v. Turner, 67 N. Y. 437.
4. Decker v. Boice, 83 N. Y. 215; Smyth v. Knickerbocker Life Ins. Co., 84 N. Y. 589.
5. See Brower v. Witmeyer, 121 Ind. 83, 22 N. E. 975; Ruraery v. Loy, 61 Neb. 755, 86 N. W. 478: Westbrook v. Gleason, 79 N. Y. 23; Butler v. Bank of Mazeppa, 94
Wis. 351, 68 N. W. 998.
6. Conrad v. Kelley, 119 Fed. 841, 56 C. C. A. 353; Lancligan v. Mayer, 32 Ore. 245, 67 Am. St. Rep. 521, 51 Pac. 649; Contra, Rogis v. Barnatowich, 36 R. I. 227, 89 Atl. 838; Bergen Savings Bank v. Barrows, 30 N J. Eq. 89.
7. Ante, Sec. 575.
8. Zehner v. Johnston, 22 Ind. App. 452, 53 N. E. 1080; Neosho Valley Inv. Co. v. Sharpless, 63 Kan. 885, 65 Pac. 667; Wilson v. Campbell. 110 Mich. 580, 35 L. R. A. 544, 68 N. W. 278; Wilson v.
Where there are conflicting assignments of a chose in action, they rank as between themselves according to the order in date of the assignments or, in a minority of the jurisdictions, according to the dates at which the respective assignees may have given notice of the assignment to the debtor.11 And the same rule would no doubt apply, in the absence of statutes to the contrary, to conflicting assignments of an obligation secured by mortgage, and in the application of such a rule the knowledge or ignorance of the later assignee as regards the previous assignment is immaterial. The application of this rule to conflicting assignments of the mortgagee's rights is, however, usually excluded by the provisions of the recording laws which in terms, or by judicial construction, are made applicable to such assignments. Under these statutes, the later assignee will ordinarily take subject to the previous assignment if he has notice of the earlier assignment,12 and he is affected with notice thereof, in most states at least, by the record of the earlier assignment.13 The fact, moreKimball, 27 N. H. 300; Bamberger v. Geiser, 24 Ore. 203, 33 Pac. 609: Bridges v. Bidwell, 20 Neb. 185, 29 N. W. 302; Curtis v. Moore, 152 N. Y. 159, 57 Am. St. Rep. 506. 46 N. E. 168.
9. Bacon v. Schoonhoven, 87 N. Y. 446; Merrill v. Luce, 6 S. D. 354, 55 Am. St. Rep. 844, 61 N. E. 43.
10. See Curtis v. Moore, 152 N. Y. 159, 57 Am. St. Rep. 506, 46 N. E. 168; Merrill v. Luce, 6 S. D. 354, at p. 362, 55 Am. St. Rep.
844, 61 N. E. 43
11. Wald's Pollock, Contracts. (Williston's Ed.) 381
12. Hoyt v. Thompson, 19 N. Y. 207; English v. Waples, 13 Iowa, 57; Bunker v. International Harvester Co. of America, 148 Iowa, 708, 127 N. W. 1016; Potter v. Stransky, 48 Wis. 235, 4 N. W. 95.
13. English v. Waples, 13 Iowa, 57; Murphy v. Barnard, 162 Mass. 72. 44 Am. St. Rep. 340, 38 N. E. 29; Pepper's Appeal, 77 Pa. St.
Over, that the assignor has not in his possession the note or bond representing the debl secured, or even the mortgage instrument, has been regarded as putting the assignee on inquiry as to the ownership thereof, with the result of charging him with notice that the mortgage obligation has previously been transferred to another.14 But it has been decided, in at least two states, that although the assignor has possession of the note or bond, the assignee is charged with notice of a previous assignment to another which is of record.15 If the later assignee has no notice of the previous assignment either from the records or otherwise, he will, being a purchaser for value, ordinarily take priority thereover.16 In one or two jurisdictions, however, even
373; Viele v. Judson, 82 N. Y. 32. But see Western Maryland Railroad, Land & Improvement Co. of Baltimore City v. Goodwin, 77 Md. 271, 26 Atl. 319, apparently contra.
14. O'Muicahy v. Holley, 28 Minn. 31, 8 N. W. 906; Kellogg v. Smith, 26 N. Y. 18; Appeal of Kitchin, 196 Pa. St. 321, 46 Atl. 418; Byles v. Tome, 39 Md. 461 (semble); Richards Trust Co. v. Rhomberg, 19 S. D. 595, 104 N. W. 268; Miller Brewing Co. v. Manage, 99 Wis. 99, 67 Am. St. Rep. 854, 74 N. W. 535; compare Blunt v. Norrls, 123 Mass. 55, 25 Am. Rep. 14.
Though the cases usually refer to the possession or nonpossession of the mortgage instrument, as well as of the note or bond, as being material in this connection, the latter would seem to be the important consideration. The mere acquisition of the mortgage instrument cannot protect one claiming as assignee as against a prior or subsequent assignee in good faith in possession of the note or bond. Adler v. Sargeant, 109 Cal. 42, 41 Pac. 799; Morris v. Bacon, 123 Mass. 58, Syracuse Sav. Bank v. Merrick, 182 N. Y. 387, 75 N. E. 232; Kernohan v. Manss, 53 Ohio St. 118, 29 L. R. A. 317, 41 N. E. 258; Boyle v. Ly-brand, 113 Wis. 79, 88 N. W. 904.
15. Strong v. Jackson, 123 Mass. 60, 25 Am. St. Rep. 19; Murphy v. Barnard, 162 Mass. 72, 44 Am. St. Rep. 340, 38 N. E. 29; Stein v. Sullivan, 31 N. J. Eq. 409; Mott v. Newark German Hospital, 55 N. J. Eq. 722, 37 Atl. 757. But if one purchased a note secured by mortgage without any knowledge, actual or constructive, that it was so secured, he would presumably take a good title to the note, as against a prior purchaser thereof who had allowed it to remain in the hands of the vendor. See the Massachusetts cases last cited.
16. Welch v. Priest, 8 Allen though the previous assignment is not of record at the time of the subsequent assignment, and the person claiming under the latter has no notice otherwise of the former, he would seem to take in priority thereover only if his assignment is recorded before the previous assignment is recorded.17
As against a judgment subsequent to the mortgage, the assignee is in the same position as the mortgagee, and holds free therefrom, if the mortgagee so held.18
Under some circumstances the failure to record an assignment may result prejudicially to the assignee in case the assignor undertakes to foreclose, or in case of a foreclosure of a prior mortgage or other lien.19