Appeals of Oberholtzer , 124 Pa. 583 ( 1889 )

Opinions,

Me. Justice Williams :

No. 287.

This is a contest over the distribution of a fund raised by the assignees for the benefit of the creditors of J. W. Gibble. It embraces the proceeds of the sales of both real and personal estate. One of the farms sold by the assignees contained two hundred and sixteen acres, and was crossed by the line between Lancaster and Lebanon counties in such manner as to leave a little over thirty-two acres in Lancaster county while the remainder of the land with the farm buildings was in Lebanon. The deed of assignment was recorded in Lebanon and the order of sale was issued by the Court of Common Pleas of that county. The creditors in Lancaster entered into an agreement with the assignees by which they released their liens from the Lancaster county part of the farm so as to enable them to sell the farm as a whole, reserving their right to come in on the fund.

Gibble bought in March, 1881, and recorded his deed in Lebanon county soon after. On the same day that he obtained his deed he gave a mortgage to Logan which was recorded on the 19th of March, 1881, in Lebanon county, but was never recorded in Lancaster. It properly described the farm as lying in both counties, and in the mortgage index was an entry stating that the land lay in Londonderry township and Lancaster county. Oberholtzer’s first judgment was entered in Lancaster county in 1882, and other judgments were entered subsequently.

Two questions are raised upon these facts. The first of these is over the basis upon which the proceeds of the farm shall be divided so as to ascertain the amount of the fund applicable to Lancaster county liens. The holders of these liens insist that the land in Lancaster comity is worth more by the acre than the Lebanon county land, and that they should be allowed to take so much of the price of the farm as they can show the thirty-two acres lying in that county to be worth. The court below held that inasmuch as the farm had been sold as a whole, the price was to be divided in proportion to the quantity of land lying in each county. We see no error in this mode of division. The purchaser had regard, in bidding, to the farm as a whole. Its buildings, improvements, fertile fields, and waste lands were considered as comprising one farm, upon which one price was put, and we see no reason why the division of tlie price should not be made upon the basis of the relative quantity as was done by the court.

The remaining question is whether the Logan mortgage is entitled to come in on the Lau caster county fund in preference to the judgments of Oberholtzor and others which were regularly entered in that county. If so, it is because, as the court below held, that the recording of the mortgage and its appearance in the mortgage index in Lebanon county is constructive notice to the subsequent judgment creditors in Lancaster. It is not pretended that Oberlioltzer or any other of the Lancaster county lien holders had actual notice of the existence of the Logan mortgage when the debts due them were contracted, or their judgments entered. Tf they did not have constructive notice because of what appeared on the records of Lebanon county, they had no notice whatever.

The precise question raised is whether the recording of a mortgage in one county upon land in another is notice to creditors in the county where the land lies. The recording of a mortgage has no greater value as constructive notice than that which our recording acts give it. The act of 1715 requires that a mortgage shall be recorded within six months after its date in the comity where the lands lie that are covered by it. The time allowed by the act of 1715 was found to be inconvenient, and the act of 1820 was passed which declared that mortgages shall have priority “ according to the date of recording the same,” and then provided that “ no mortgage or defeasible deed shall be a lien until such mortgage or defeasible deed shall have been recorded or left for record.” These acts plainly provide for recording mortgages in the county where the land affected by them lies and denies to them the benefits of a lien on the land until they come actually into the hands of the recorder. No matter where else the mortgage may be recorded, if it is not on the records of the county where the land lies it is no lien upon that land except as to the mortgagor or persons who have actual notice of its existence. When it is recorded in the proper county, then as to all persons dealing with the land as purchasers or lien creditors actual notice of the mortgage is not necessary, because they are fixed with notice by the record. Actual notice may be given in any county, because it brings knowledge home to the person to be affected by it. Constructive notice, on the other hand, results from the fact of recording in the county where the land liés and cannot extend beyond the county in which the record is made.

The Logan mortgage though recorded in Lebanon county is as to the county of Lancaster an unrecorded mortgage, and nothing but actual notice to the creditor before his debt is contracted will save its priority in that county: Nice’s App., 54 Pa. 200. The want of actual notice being conceded, and the want of constructive notice being settled as the result of the failure to record in Lancaster county, it is clear that as to the Lancaster county lands, Logan is simply a specialty creditor, with no lien as against the appellant and others who are the holders of liens in that county. The first, second, and third assignments of error are sustained.

The decree of distribution as to the fund raised from the sale of the Lancaster county land is reversed, and the record remitted for distribution in accordance with this opinion.

No. 288.

The questions involved in the appeal in this case have been fully disposed of in an opinion just filed in the appeal of Oberholtzer, executor of Henry Oberholtzer, deceased. For the reasons there given, which it is unnecessary to repeat, the decree in this case is reversed as to the fund raised from the Lancaster county lands, and distribution thereof is ordered in accordance with the opinion in said case.