Rollins ex rel. Molder v. Callender

1 Free. Ch. 295

• Court: Mississippi Chancery Courts
• Decided: July 1, 1844
• Status: Published

Opinion

The Chancellor.

The complainants seek to foreclose a mortgage given by the defendants, Callender and wife, upon a town lot in Port Gibson, to secure the payment of several promissory notes, payable to A. Rollins, and subsequently transferred to Molder and Parker. The notes are described in the mortgage as payable on the first of May, 1837, and on the first of May, 1838. The notes produced are payable on the first of January, 1837, and the first of January, 1838. This misdescription is alleged to be the result of a mere .oversight or mistake of the draftsman of the mortgage; and this allegation is fully sustained by the proof in the case. Subsequent to the date and registration of the mortgage, the defendant, Hughes, being a creditor of Callender, brought suit against him and recovered a judgment; upon which he caused an execution to issue, and had the same levied upon the mortgaged premises, and at the sale became himself the purchaser thereof, and now claims to hold the same discharged from the mortgage of the complainants, alleging that he is a bona fide purchaser, without notice of the alleged mistake in the mortgage in describing the notes.

The validity of this defence is the only question presented for my consideration, which raises at once the inquiry as to what facts constitute notice? as also what constitutes a bona fide purchaser in the legal sense of that phrase? The answer of Hughes admits that he knew of the existence of the mortgage, the same having been spread upon the public records; but denies that he had notice of the misdescription of the notes as to the time of their maturity. This mistake is, I think, unimportant in its bearing as to subsequent purchasers. Reference to the condition of the mortgage shows that the notes are accurately described as to dates, sums, and the names of the parties thereto. This I think was sufficient to communicate notice to the defendant of the substance of the whole transaction. He is there advised of the facts, that a mortgage existed upon the town lot, and that it was made to secure the payment of a specified sum of money, due from the mortgagor to the mortgagee, as evidenced by promissory notes of a specified date. A knowledge of these facts was at least sufficient to have superinduced some diligence and inquiry, which would have readily led to a knowledge of the mistake in the description of the notes.

It is now the settled doctrine in equity, that whatever has a reasonable certainty, as to time, circumstances and persons, is sufficient to put a party upon inquiry, and amounts to evidence of notice to him. Green v. Slater, 4 John. C. R. 38; Daniels v. Davidson, 16 Ves. 250; Smith v. Low, 1 Atk. 489; 2 Sugd. on Vendors, 290.

But whether the facts disclosed in the case amount to notice or not, they at least show that Hughes is not a bona fide purchaser, in the sense which entitles him to protection in a court of equity. He bought in the lot named in the mortgage, under his own judgment, for ah antecedent debt, without paying any new consideration therefor. This did not constitute him a bona fide purchaser, within the legal acceptation of that phrase. Arnold v. Patrick, 6 Paige’s C. R. 316. To constitute such a purchaser, there must be a parting with money or property, or the doing of some act upon the faith of the purchase itself, which could not be retracted, such as executing a release for a pre-existing debt. Jackson v. Campbell, 19 John. R. 282, 283.

I therefore conclude that Hughes purchased, at the sheriff’s sale, nothing more than the mortgagor’s equity of redemption, and that, he holds that subject to the plaintiff’s right of foreclosure.

Let the mortgage accordingly be reformed, as prayed for, and a reference be made to the clerk of the court to compute the principal and interest due thereon.