Gage v. McGregor , 61 N.H. 47 ( 1881 )

When the plaintiff released her mortgage to Foster upon the 32 square rods, part of the 96 1/2 square rods mortgaged to her, she had no actual knowledge of the conveyances by Foster to McGregor and to Connell. The record of those conveyances was not constructive notice to her (Johnson v. Bell, 58 N.H. 395, Brown v. Simons, 44 N.H. 475, George v. Wood, 9 Allen 80, Wheelwright v. DePeyster, 4 Edw. Ch. 232, Cheesebrough v. Millard, Johns. Ch. 409, Taylor v. Maris, 5 Rawle 51), and she was not put upon inquiry. A mortgagee is not subjected to the constant necessity of investigating transactions between the mortgagor and third persons subsequent to the mortgage. But a subsequent purchaser, taking his title with knowledge of the mortgage, if he wishes to protect himself, should notify the mortgagee of the purchase. 1 Jones Mort., s. 723; 2 ib., s. 1624; George v. Wood, supra; King v. McVickar, 3 Sandf. Ch. 192; Gouverneur v. Lynch, 2 Pai. Ch. 300. The record is constructive notice to subsequent purchasers only, or those claiming under the same grantor. Jones Mort., s. 723; Cheever v. Fair, 5 Cal. 337.

The record of the plaintiff's mortgage was constructive notice to the defendant's grantor, John McGregor, of the incumbrance created by the mortgage. The defendant stands in the same position as though she took her title with full knowledge that it was subject to the mortgage, and took no steps to protect it by a release, or to notify the plaintiff of her title. The defendant is not, therefore, entitled to claim an abatement of a proportionate part of the mortgage debt as against herself, on account of the plaintiff's release to Foster; and the plaintiff's lien upon the rest of the mortgaged premises has not been affected by her release. Brown v. Simons, supra, 482; McIntire v. Parks, 59 N.H. 258.

The lien created by the plaintiff's mortgage still subsists upon the whole tract, except the 32 rods released. But the 40 1/2 square rods which the mortgagor has not conveyed is primarily liable for the whole mortgage debt, while that which he has sold is chargeable in the inverse order of the sales for the deficiency only. Equity interferes in this way in order to protect, so far as possible, the rights of all interested in the mortgaged premises, much like the case where one creditor has security upon two funds, and another creditor upon one of them only, — and generally requires the first incumbrancer to look first to the fund on which the other has no lien. Brown v. Simons, supra, 478; 2 Jones Mort., ss. 1,620, 1,621, and cases cited.

Upon this principle the value of these several tracts of land is applied in satisfaction of the mortgage debt in the reverse order of the conveyances, viz.: (1) the tract of 40 1/2 rods, valued at $1,000; (2) the tract of 13 rods sold to Connell, and valued at $850; (3) the defendant's tract of 11 rods, valued at $700. As the value of the first two tracts is apparently much larger than the amount of the mortgage debt, the plaintiff apparently has no occasion to resort to the defendant's lot to satisfy her claim. But if this is involved in doubt, the matter can be made certain at the trial term. Otherwise, the bill should be dismissed without costs.

The defendant was not a party to the suit brought by the plaintiff against her husband and Connell, and is not affected by the judgment rendered in that suit. She did not, by filing a bill in equity against the plaintiff, make herself a party to the plaintiff's suit, nor has she been heard in that suit.

Case discharged.

ALLEN, J., did not sit: the others concurred.