Gooding v. Riley

50 N.H. 400
CourtSupreme Court of New Hampshire
DecidedDecember 15, 1870
StatusPublished
Cited by4 cases

This text of 50 N.H. 400 (Gooding v. Riley) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gooding v. Riley, 50 N.H. 400 (N.H. 1870).

Opinion

Bellows, O. J.

One question is, whether the defendants can have oyer of the mortgage held by the plaintiff of which profert was made, [403]*403and enroll it, and thus by demurrer take advantage of a defect in its execution not apparent on the face of the bill.

If he can, it raises the question whether a subsequent mortgagee, with full knowledge of the plaintiff’s mortgage that it was made upon full consideration and in good faith, can take advantage of the want of the affidavit prescribed by the statute to the truth and justice of the plaintiff’s mortgage.

If in general, he could do so, whether such subsequent mortgagee would be precluded by the fact that his mortgage was made and received with the purpose of hindering and embarrassing the plaintiff in enforcing his mortgage and collecting his debt, or that such subsequent mortgage was made expressly subject to the plaintiff’s mortgage.

A further question may arise upon the allegations that the plaintiff claims that the notes secured by such subsequent mortgages were without much, if any, consideration, and were fraudulent and void.

And first, as to the effect of notice:

In Patten v. Moore, 32 N. H. 383, it is laid down by Bell, J., that the principle of equity is unquestionable, that one who buys property with notice of an existing right of a third person, legal or equitable, shall be deemed to have made his purchase in bad faith, and to be guilty of a fraud, so that he will not be permitted to set up his purchase, against such right.”

This doctrine is fully sustained in New Hampshire. In Scoby v. Blanchard, 3 N. H. 170, it was held that the tenant might at law set up a resulting ti'ust in his favor against the legal title obtained by the demandant of the trustee with a full knowledge of such resulting trust, upon the ground that plaintiff’s title must be considered as founded in fraud and injustice, and could receive no countenance in a .court of law; — and the court, per Richardson, O. J., illustrates this doctrine by putting the case of a purchase of land, with knowledge in the buyer that another had bought it before, but had forgotten to record his deed; and there the second purchaser could not hold the land because his purchase was a fraud upon the first purchaser.

In this case it was held that, as there was no court of equity in this State, a court of law would apply the doctrine of equity in a case where, as here, the claim of the demandant was tainted with fraud.

The same doctrine was applied in Hadduck v. Wilmarth, 5 N. H. 181, where the tenant held an equitable title that could have been enforced in equity, and the plaintiff, with notice of it, bought the legal title. And also in Cutting v. Pike, 21 N. H. 347.

In Ela v. Pennock, 38 N. H. 157, it is said that in each of these cases the title of the plaintiff was obtained by a legal fraud; and Perley, C. J., holds, that where a party purchases with notice of a prior deed not recorded, his purchase is a fraud on the party who had the equitable right under the prior deed, and he would be estopped by the fraud to set it up against the equitable title, in a suit at law. The court held, however, that where the element of fraud is wanting, the equitable title cannot be set up against the legal title in a suit at law, but resort must be had to equity for relief.

[404]*404The case before us is a mortgage of personal property; and the statute then in force, — Revised Statutes, ch. 132, § 3 ; C. S. 128, § 5, — required that each mortgagor and mortgagee should make and subscribe the oath therein specified, which, by section 5 of that chapter, was to be appended'to the mortgage and recorded with it.

Section seven provides that “ no such mortgage shall be valid against any person except the mortgagor, his executors and administrators, unless possession is delivered, or the mortgage is sworn to and recorded in the manner herein prescribed.”

In this case it appears that no affidavit was made, such as is prescribed; and the question is, whether the defendant Riley is precluded from setting up that defect by the notice or knowledge which he is alleged to have had when he obtained his mortgages.

In respect to real estate, it is well settled in New Hampshire that a purchaser, with knowledge of a prior conveyance that is valid between the parties, cannot, even at law, avoid it by insisting upon the want of registry or acknowledgment, or even the prescribed number of witnesses. And yet the law, Rev. St., ch. 130, § 4, is explicit, that no conveyance of real estate shall be valid against any person but the grantor and his heirs only, unless the deed be attested, acknowledged, and recorded, according to the provisions of that chapter.

The doctrine which forbids a subsequent purchaser with notice setting up such a defect to defeat a prior conveyance, stands upon the ground that such purchase is to be regarded as made in bad faith, and with the purpose to defeat a prior equitable right, and therefore, in law, fraudulent; and to allow such prior right to be defeated in that way would be using a statute made to prevent fraud as an instrument for the protection of fraud.

This doctrine originated in equity, but is now well established at law, both in this country and in England. It is a salutary doctrine, and accords with the soundest principles of morality and public policy, which must regard as bad faith and a legal fraud an attempt to aid a grantor in defeating a conveyance fairly made by him, by obtaining a subsequent conveyance of the same land, having knowledge of the prior grant.

In LeNeve v. LeNeve, 3 Atk. 646-654, the subject is fully considered by Lord Hardwicke, and those views are fully sustained. The same may be said of the case of Jackson v. Burgott, 10 Johns. 457, where there is an able opinion by Kent, C. J.

The authorities are indeed numerous, that it is upon the ground of fraud and bad faith that a subsequent purchaser, with notice of a prior conveyance, is .estopped to set up a defect of the character described. Among them are 4 Kent’s Com. *456; Dunham v. Dey, 15 Johns. 568, and cases; Connecticut v. Bradish, 14 Mass. 300; Bush v. Golden & al., 17 Conn. 594; Colby v. Kenniston, 4 N. H. 262.

So is Hastings v. Cutler, 24 N. H. 481, where there was but one witness to a deed of real estate; but it was held good against a creditor with notice, the court holding that, by the revised statute, the law of 1791 was substantially restored, under which it was held in French [405]*405v. French, 3 N. H. 234, that a deed with one witness was good under the statute of uses. In Barker v. Bean, 25 N. H. 412, it was held that an assignment of real estate for the benefit of creditors was not valid against an attaching creditor with notice, where there was only one witness. The court cite, and apparently rely on, Stone v. Ashley, 13 N. H. 38, which, under the statute of 1829, which was totally unlike that of 1791, and the revised statutes, held that a conveyance with only one witness would not be good even against the grantor. The difference between the statutes was not adverted to in the opinion.

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Bluebook (online)
50 N.H. 400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gooding-v-riley-nh-1870.