Appeal of Cessna

OpiNioN by

Me. Justice Teunxey:

The mortgage was executed on July 14, 1885, to Daniel Cessna, trustee, who had no interest in it, and who assigned the whole ■of it to the persons who loaned the money to the mortgagor. John Cessna, president of the corporation, was the active party in procuring the loan, and the auditor finds that he “was not attorney for the Franklin & Marshall College, or any of the others taking parts of the mortgage,” but he induced them to take the same. The last assignment was made August 22, 1885, to John A. Gump.

After the sheriff’s sale Daniel Cessna purchased the claim of the Watertown Steam Engine Company, thereby acquiring an interest adverse to the assignees of the mortgage, and because that claim was “left unpaid at the time of the making of the mortgage and the fact was known to the mortgagee, and there being no objection to it by the mortgagee, the claim is allowed to participate in the fund.”

That the mortgagee who never was actually interested in the mortgage, and who now owns the mechanics’ claim, should not object is not very singular. Surely, bis conduct since tbe assignment ought not to prejudice the assignees.

The mechanics’ claim was filed December 10, 1885, and had it been indexed the lien would have continued against subsequent lien creditors. Here there is no question of the continuance of the lien against the owner of the building, or against a creditor who had notice that the claim was filed. There is no evidence that the owners of the mortgage had notice. The docket is the only thing which affects- encumbrancers and purchasers. Armstrong v. Hallowell, 35 Pa. 485.

Had the encumbrancers looked at the proper docket they would not have found the claim. They were not bound to search through the docket for a claim, when there was nothing in the index to show its existence. Although there was a lien for the debt owing to the Watertown Steam Engine Company, at the date of the assignments of the mortgage, filing the claim was necessary to keep it alive.

Without actual or constructive notice that the claim had been filed, the assignees cannot be postponed in favor of such claim in the distribution of the proceeds of the sheriff’s sale. They are not under the necessity of showing that they would have bid more for the property had they known of the lien. Their action is presumed to have been based on the record, of which they were bound to take notice. The mere fact that there was a valid claim and lien against the defendant in the execution does not prejudice a creditor or purchaser.

Decree reversed, and it is now considered that $4,866.06 be appropriated pro rata to the assignees in the case of Daniel Cessna, Trustee, v. Everett Glass Co., and the balance of the fund to costs as set forth in the decree of the court below. Costs of appeal to be paid by appellees.

Eecord remitted.