Grant v. President, Directors, and Co. of the Bank of the United States ( 1804 )

Spencer, J.

The Chancellor has adopted the rule of the court of chancery in England, which is, that where parties have equal equity, and one of them has a legal advantage, not to deprive the one, of the legal preference he has obtained. That this rule is established there, I fully agree j and, unless our statute has created a rule on this subject peculiar to our own jurisprudence, I shall acquiesce in this part of the decL sion. For, I do not think that the registering the mortgage is upon legal principles notice of its existence; though, was the point now for the first time to be decided, I should concur that it ought so to be considered; the contrary, however, is too well established to be drawn in question. Nor do I consider the notice given by Mr. Taylor to Robert Lenox, either actual or constructive notice. It is leit quite uncertain at what period this notice was in fact given; and, if given in time, it does not appear that Mr. Lenox was present, when Bissett became indebted to the Bank, or gave the mortgage, or that Mr. Lenox ever communicated it to the board. They deny such notice by their answer; and, although it is not, nor could it be under oath, yet it is certainly sufficient to repel the vague testimony of Mr. Taylor. This brings me to the consideration of our statute concerning mortgages. It provides, that, w in case of several mortgages of the same pre- “ mises, or any part thereof, the mortgage or mortgages, “ which shall be first registered, shall have preference in all “ courts of law and equity, according to the times of the regis- “ try of such mortgages respectively.” It appears to me, that the statute has abolished, with respect to registered mortgages, the right of tacking a junior to á senior mortgage, and thus excluding an intervening one, They are to have preference in all courts of law and equity, according to the times of their respective registry. To allow a junior mortgage to be paid first, is denying to an elder mortgage the preference the statute has given. The statutes of 2d and 3d Anne, ch. 4th and 7th, Anne, ch. 20th, though affording a preference to registered over unregistered mortgages, do not determine, as our statute does, the preference they are to have, or in what order registered mortgages are to be redeemed or satisfied. Though it was truly observed by the appellants’ counsel, that there are no decisions in England to be met with, denying the principle now advanced. I am therefore of opinion, that in this respect, the decree of his Honour the Chancellor ought to be reversed. The remaining question is, whether the mortgage held by Grant is to be considered a valid security, for the amount therein mentioned, and thereby secured ? It will be proper, first, to consider, what is, and what is not evidence in the cause. In the bill filed by jhe Bank, against Grant and ethers, John Taylor and Alexander M6Gregor are made co-defendants,' and the respondents counsel, considering some parts of their answers as operating in their favour, have dwelt upon the facts disclosed by them. I have no hesitation in saying, that the answer of one co-defendant is evidence neither for, nor against the other. The authorities cited maintain this position. It appears from exhibits and testimony, that the consideration of the mortgage given by Bissett to Taylor, money advanced by Taylor to Bissett, money owing by Bissett, and assumed to be paid by Taylor, and a balance of between 8 and 0900, to be paid in finishing certain houses on lots included in the mortgage. It appears that Taylor, about the 30th of June, assumed debts, and became responsible to Bissett’s creditors, to the amount of about $1000, besides the sum advanced. It further appears, that Alexander McGregor, to whom the mortgage was assigned by Taylor, as a consideration for that assignment, refunded money to Taylor, which he advanced to Bissett, and also, for the purpose of securing a small demand he had against Bissett in his own right, and another, as administrator of one Cunningham, and also, in consideration of his becoming responsible to sundry persons, for claims which they had against Bissett. For the performance of the agreement thus made by M‘Gregor, he executed his bond to Taylor, and he offered to Bissett to guarantee its fulfilment. Though the business was transacted loosely between Bissett and Taylor, it appears to me, there exists no pretence of fraud ; and as to the validity of such consideration, I have as little doubt. Under these circumstances, the mortgage originally given to Taylor, was assigned to Grant. There is nothing tending to show that Grant did not advance the full amount of the consideration, if the answer of M‘Gregor be not evidence, and that it is not, I have before said. I am of opinion, that the decree be reversed. That after applying the proceeds of the one lot, included in the mortgage to Taylor, and not in the others, towards the satisfaction of the mortgage held by Grant, the proceeds of the sale of the three lots, after satisfying the principal and interest due on the mortgage to Gnderdonk, and held by the Bank, be applied to the satisfaction of the principal and interest of the mortgage held by Grant, considering the same as a valid security for the entire sum mentioned therein, and secured thereby.

The other judges and residue of the court concurring, the decree was unanimously reversed. Lewis,- C. J. however, observed, that he thought the mere registering a mortgage . . a . , ° ° 00 was notice to subsequent incumbrances.