Elisha Glidden versus John Hunt, 24 Pick. 221

Wilde J. delivered the opinion of the Court. This case came on to be heard before me at a former term, on the original bill, and on opening the case it was agreed by the parties that my decision thereon should be final. After hearing counsel and considering the evidence, I was of opinion that the plaintiff was entitled to redeem, but under the circumstances of the case it seemed to me reasonable to suspend the final decree, and to allow the defendant to file a cross bill, which was accordingly done.

The defendant then moved to amend the minutes of the decree, and that the cause should be continued until a hearing should be had on the cross bill. This motion was allowed. The case has been since heard before the whole Court on the cross bill; and we are all of opinion, that the decision upon the former hearing, as the case was then made out, was correct. The plaintiff claimed to redeem a mortgage made by Micah Balcom and Joseph Balcom to the Massachusetts Hospital Life Insurance Company in February, 1824.

His title was derived from a mortgage deed from Micah Balcom to one Jonas Balcom, made July 25th, 1825, which was assigned by Jonas Balcom to one Joel Adams, and by Adams to the plaintiff. It was admitted, that prior to 1822, Micah Balcom was seised of the lands thus mortgaged, but the defendant produced a deed from him to Joseph Balcom, dated the 4th of May, 1822, but which was not recorded until December 1827, and subsequently to the record of the mortgage to Jonas Balcom. It was denied that this deed was ever consummated by delivery, and- on this point the evidence was conflicting.

There was evidence also tending to show that Jonas Balcom had knowledge of the deed of 1822, prior to his mortgage from Micah Balcom ; and that the plaintiff had notice thereof prior to the time when he took an assignment from Adams. But there was no evidence that Adams had any knowledge or notice of the prior deed to Joseph Balcom. I was therefore of opinion, that Joel Adams had a valid title, and that the plaintiff had a right under him, which could not be defeated, however the other points might be determined.

It is a well established principle, that a deed fraudulent in its creation may become valid by matter ex post facto; as where a deed is made to defraud creditors, and the fraudulent grantee conveys to a bond fide purchaser for a valuable consideration and without notice of the fraud, such purchaser shall hold against the claims of the creditors of the first grantor. Bac. Abr. Fraud, C; 1 Sid. 134.

So if A., for a valuable consideration conveys land to B., and before B’s deed is registered, A fraudulently conveys the same land to C., who knows of the prior conveyance, and immediately puts his deed on record before B., and. then conveys to D., who is ignorant of the fraud, the title of D. would be valid. This was decided in Trull v. Bigelow, 16 Mass R. 406.

And in the same case it was decided, that if D. con veys to E., who has knowledge of the fraud, E’s title would be good ; for it is said,although he knew that the title was once defective in one of the persons under whom he claimed, yet he also knew that the defect was cured, and the stain upon the title effaced.” This case is directly in point, in every particular, and fully maintains the former decision. It now, however, has become necessary to decide the other points.

And the first question is, whether the deed from Micah Balcom to Joseph Balcom was ever delivered. [The judge here went into an examination of the evidence ; which, in the opinion of the Court, established the fact of the delivery of the deed.] The next question is, whether Jonas Balcom had notice of the prior deed to Joseph when he took his mortgage, and whether Glidden, the plaintiff, had the like notice when he took the assignment from Adams. And we are of opinion, that the evidence is sufficient to show, that botli Jonas Balcom and Glidden had such notice.

At least, they had notice= sufficient to put them on inquiry, and that is equivalent to express notice or positive knowledge. For if they had reason to believe the fact, it was their duty to make inquiry, and if they neglected so to do, a third party is not to suffer by their neglect. The only remaining question is, on what terms Hunt, on his cross bill, is entitled to redeem the original plaintiff’s mortgage ; whether he is bound to pay the whole amount of the mortgage, or only what was due to Adams at the time of his assignment to' Glidden, or only a part of that debt.

As to this question, it is very clear from the remarks already made, and the well established principles of equity, that Glidden can claim no more than Adams could have claimed had no assignment been made by him, and he were a party. It is objected, that Adams could only hold for the amount he advanced on the assignment of the mortgage, and not as a security for a preexisting debt.

It is true that it has been decided, that where an assignment is made merely to secure a preexisting debt against the assignor, without giving up any security against him, or paying any additional consideration, or incurring any new responsibility, the assignee must hold the property assigned subject to all the equity to which the assignor was subject.

We give no opinion, however, as to this general principle, because, admitting it to be well founded, it will not govern this case ; for Adams did advance money, $ 25, on taking the assignment, and afterwards the further sums of $75 and $49-24, on the credit of the assigned mortgage. These advances and payments were made by Adams in good faith, and it must be presumed that they were made for the purpose of securing his prior debt ; and we know of no principle of law or equity by which this intention can be defeated.

We are of opinion, therefore, that Hunt is entitled to redeem on payment of the sum of $ 220, the sum paid to Adams, with interest and costs. On this point the counsel for Hunt cited Bay v. Coddington, 5 Johns. Ch. R. 54; S. C. 20 Johns. R. 637; Dickerson v. Tillinghast, 4 Paige, 215. And see Flint v. Clark, 22 Pick. 243.