SIMON against KALISKE

SIMON against KALISKE. New York Superior Court ; General Term, June, 1869. Recording Acts.—Assignment for Benefit of Creditors. An assignment for benefit of creditors, embracing real estate in the city of New York, filed in the office of the county clerk, according to the act of 1860, is not constructive notice of the conveyance of such real estate. The record of such an instrument should be made as of a conveyance, in the.register’s office to have such effect. The refusal of the purchaser to accept a sufficient deed of land, agreeable to the contract, duly tendered by the vendor,—Held, to exonerate the vendor, both from the obligation to convey, and the obligation to return the portion of the purchase money received on the contract. Appeal from a judgment dismissing the complaint. The action was brought by Isaac Simon against Alexander S. Kaliske. The respondent Kaliske agreed to sell and convey a good title to the premises 264 West Fortieth-street, in the city of New York, to the appellant. When he offered to convey, the title was objected to. The title was acquired under a foreclosure sale, and the sole objection to it was, that the alleged owner of the equity of redemption, viz: Henry J. Irving, an assignee for the benefit of creditors, was not made a party to the foreclosure. The assignment was recorded in the New York county clerk’s office, but was not recorded in the register’s office. It appeared that one or more of the creditors of Freeland at the date of the assignment, had not been paid, up to the date of the trial. The appellant Simon having rejected the title that the respondent offered to convey, he commenced this action to compel the respondent to remove the objection made to the title, and then to convey, or to refund the portion of the purchase money paid, and the expenses incident to the examination and rejection of the title. The appellant’s right to relief depended upon a single legal question, to wit,—Whether the purchaser at the foreclosure sale was charged with constructive notice of the assignment to Irving, which had been recorded in the county clerk’s office, but not in the register’s office ? On the trial the-complaint was dismissed, and the plaintiff appealed. John A. Weeks and George II. Forster, for the appellant. I. The laws of this State have provided several record offices for the different descriptions of conveyances and incumbrances affecting the title to real estate. In this city, the register’s office for deeds and mortgages ; loan commissioners’ office for their mortgages ; county clerk’s office for judgments, mechanic’s and unsafe building liens, lis pendens, sheriff’s and marshal’s certificates, insolvent assignments, foreclosures by advertisement, and appointment of receivers ; United States circuit court clerk’s office for judgments of that court; United States district court clerk’s office for judgments of that court, adjudications of bankruptcy and appointment of assignees ; tax, arrear, and Croton aqueduct department, for unpaid taxes, assessments and Croton water rates, and sales for the same. II. By section 132 of the Code, “Every person whose conveyance or incumbrance is subsequently executed, or subsequently recorded, shall be bound by all proceedings taken after the filing of such notice.” But this general assignment was executed and recorded nearly, eighteen months prior. Section 132 of the Code does not limit the place of record to the register’s office. This assignment was not recorded there. The register’s office is the place for the record of deeds and mortgages ; other conveyances and incumbrances affecting real estate are to be recorded elsewhere. For places of records as to judgments, see Code, §§ 63, 282: mechanics’ liens, Laws of 1844, 339, ch. 220, § 2 ; Laws of 1851, 955, ch. 513, § 6 ; Laws of 1855, 760, § 3 ; Laws of 1863, 862, § 6 ; Laws of 1866, 1634, § 1 ; see, also, Laws of 1862, 593, § 39 : sheriff’s certificates, Act of April 12, 1820, § 1, vol. 5, p. 167; 2 Rev. Slat, 370, part 2, tit. 5, ch. 6, § 57 [§ 43]; Laws of 1857, 93, § 1, Surrogate’s order for sale of lands to pay debts is of record with the surrogate. Foreclosures by advertisement with the county clerk, 2 Rev. Slat., 547, §§ 11, 12. Orders for sale of infants’ and lunatics’ estate by special guardians and committees, in county clerk’s office ; also, orders for appointment of receivers of judgment debtors : Code, § 298 ; Laws of 1862, 850, § 15 ; Laws of 1863, 661, ch. 392 ; Porter v. Williams, 9 N. Y. [5 Seld.], 142. Judgments of United States courts, Bright. Dig., 449 ; 5 U. S. Stat. at L., 393 ; Wood v. Chapin, 13 N. Y. [3 Kern.}, 509 ; 7 How. Pr., 381; 5 U. S. Stat. at L., 442, 443, 448 ; Act of March 2, 1867, § 14 ; Price v. Philips, 3 Rob., 448. III. By section 33 (section 28) of article 3, section 9 of article 5, title 1, chapter 5 of part 2 of the Revised Statutes, the effect of the insolvent assignments there provided for by law is declared to be to vest in the assignees all the interest of the insolvent at the time of executing the same, in any estate or property, real or personal, whether such interest be legal or equitable (2 Rev. Stat., 21, 30). Every assignment executed under the third, fourth, fifth and sixth articles of that title, shall be recorded by the clerk of the county in which it was executed, upon being acknowledged or proved, in the same manner as deeds of real estate (§ 20 of art. 7 of same title ; 2 Rev. Stat., 38, p. 112 of vol. 3, 5th ed.). So that before the law of 1860 the statutory insolvent assignments were recorded, in New York, in the county clerk’s office. In like manner," and in conformity with this practice, the place of record for general assignments under the act of 1860 was fixed by section 6 of that act as the county clerk’s office (Act of April 13, 1860, ch. 348, § 6, Laws of 1860, 596. IY. That is the only place by law designated for the record of such assignments. By such record of this assignment in that office, January 7,1861, Henry J. Irving, withing the meaning of section 132, was a person whose conveyance or incumbrance was executed and recorded prior to the filing of the lis pendens in Lord v. Yreeland, and was, therefore, wholly unaffected by the judgment in the forelosure. The decision at special term would require a double record of every general assignment in this city, in order to give them validity as to real estate, while the statute requires but one. The court has heretofore sustained the provisions of this law, and sustained assignments under it, passing real estate (Morrison v. Atwell, 9 Bosw., 503; Read v. Worthington, Id., 617. The intention of this statute as to these assignments, was “to protect those interested under them” (p. 629), Scott v. Guthrie, 10 Bosw., 408, where it is expressly stated that the assignment was recorded with the clerk of the city and county of Hew York (p. 410), fifth line from bottom of page: “ The section of the act which requires that assignments shall be recorded in the clerk’s office of the county where the assignors resided at the delivery of the assignment, must receive a liberal construction. The purposes of the statute ” (in case of non-residence, the case there) “are answered by recording the assignment in the county where the assigned property is” (page 416. Powers v. Graydon, 10 Bosw., 630 ; Iselin v. Dalrymple, 2 Rob., 142 ; Loeschigh v. Jacobson, Id., 645). The supreme court has likewise sustained such assignments, and construed the provisions and intentions of said act in like manner (Baldwin v. Tynes, 19 Abb. Pr., 32 ; Hoton v. Heidig, 17 Id., 332; Juliand v. Rathbone, 39 Barb., 97; Turner v. Jaycox, 40 Id., 164]. V. The assignee, Henry J. Irving, inasmuch as he was entitled under the general assignment which was recorded January 7, 1861, eighteen months prior to the filing of the notice of Us pendens, is within the protection of the principles of Price v. Phillips, in this court, and unaffected by the foreclosure proceeedings (3 Rob., 448; Walsh v. Rutgers Fire Ins. Co., 13 Abb. Pr., 33 ; Slee v. Manhattan Co., 1 Paige, 48 ; Vanderkemp v. Shelton, 11 Id., 28; Eagle Fire Ins. Co. v. Lent, 6 Id., 635). VI. The court erred in its decision at special term, in that it merely dismissed the complaint, and did not finally decide all the rights of the parties on the questions presented by complaint and proof. The whole case was before the court, and the plaintiff was entitled to have a decision of all the matters in controversy (Bidwell v. Astor Mutual Ins. Co., 16 N. Y., 263). “ The rule of courts of equity was, when they had acquired jurisdiction, and had the whole merits before them, to proceed and do complete justice between the parties ;” and the Code makes that rale applicable to all actions (Phillips v. Gorham, 17 N. Y, 270 ; Hew York Ice Co. v. northwestern Ins. Co., 23 Id., 357 ; See v. Partridge, 2 Duer, 463 ; Marquat v. Marquat, 12 N. Y. [2 Kern.], 336 ; Towle v. Jones, 1 Rob., 87). By the tender of the deed, which is alleged in the pleadings, and found by the decision, under the established rule in this State, the plaintiff became the debtor of the defendant for the balance of the purchase money, and was entitled to the conveyance of the property on payment thereof, and of such damages,, by way of interest or otherwise, as the defendant may be entitled to for the plaintiff’s delay (Richards as. Edick, 17 Barb., 260, and cases cited, 265). This was not one of the cases in which time is of the essence of the contract. " Joshua M. Van Cott and Joseph C. Levi, for the respondent. I. The general registration acts require all conveyances of interests in land, in the city and county of New York, to be recorded in the office of the register of deeds, to charge bona fide owners with constructive notice thereof (1 Rev. Slat., 755, § 1). Voluntary assignments for the benefit of creditors are not excepted from the operation of the general act ■ by the assignment act of 1860 (Laws of 1860, 594, ch." 348, § 6). Of course, the record is notice to the creditors, and to all persons interested in the assignment. The act does not in terms, or by reasonable implication, affect persons who are not creditors or interested in the assignment. II. The act of 1860 has no feature common to general registration acts. (1.) Those acts require the conveyance which describes the property to be recorded; this act merely requires a general inventory of the property, real and personal, to be filed. (2.) Those acts require the conveyance to be recorded before it becomes effective as notice to bona fide purchasers; this act permits the designation of the property to be filed, for all the effective-purposes of the act, twenty days after the making of the assignment. (3.) Those acts require the conveyance to be recorded in the registration district where the property is situated; this act requires the filing of the inventory, not where the property is located, but in any county, however remote, where the assignor may happen to reside. III. There are various special liens, where statutes prescribe the mode of the notice, and its effect in creating a lien, viz : (1.) Taxes and assessments (1 Rev. Stat., 5 ed., 917-954). (2.) Bonds of receivers of taxes and their sureties {Laws of 1843, ch. 230). (3, 4.) Judgments in United States circuit and district courts (vide acts organizing them). (5.) Mortgages to United States loan commissioners {Laws of 1837, ch. 150, § 43 ; New York Life Ins. Co. v. White, 17 N. Y., 469). (6.) Conveyances, mortgages, leases, &c. (3 Rev. Stat., 5 ed., 45, § 1). (7.) Judgments of State courts (2 Edm. Stat., 371, § 3; Code, § 282). (8.) Notices of lis pendens {Code, § 132). (9.) Mechanics’ liens {Latos of 1844, ch. 305 ; Laws of 1854, ch. 402 ; Laws of 1858, ch. 204). (10.) Certificates of sheriff’s sale (2 Edm. Stat., 388, §§ 61, 62). (11). Collectors’ bonds (1 Edm. Stat., 318, 319, §§ 19, 20 ; Laws of 1838, ch. 216). (12.) Foreclosures by advertisement (3 Rev. Stat., 5 ed., 859, § 3, subd. 2 ; Id., 861, §§ 8, 12 ; Id., 860, § 6). (13.) Appointment of receivers {Code, § 298). The decisions in other States, on similar statutes, accord with the decision here appealed from {Burr, on Assignm., 2 ed., 292, 293). iy. There was no actual notice of the assignment. To make a notice effective, ‘it must reach all the parties through whom the title is derived. A grantor without notice can convey a good title to a grantee with notice ; and a grantor having notice can convey a good title to a grantee without notice (Wood v. Chapin, 13 N. Y. [3 Kern.], 509); 1 Story Eq., § 409 ; Jackson v. Given, 8 Johns., 137; Demarest v. Wynkoop, 3 Johns. Ch., 147; Fort v. Burch, 5 Den., 194; Hooker v. Pierce, 2 Hill, 654 ; Jackson v. Post, 15 Wend., 595 ; Varick v. Briggs, 6 Paige, 329 ; Jackson v. McChesney, 7 Cow., 360). Y. Any record made, or notice given, after Us pen-dens filed, would have been ineffective {Code, as amended in 1858, § 132 ; Stern v. O’Connell, 35 N. Y., 104 ; 1 Story Eq., §§405,406; Cleveland v. Boerum, 24 N. Y., 613). [MAJORITY — By the Court. Barbour, Ch. J.] By the Court. Barbour, Ch. J. This was an action brought by the vendor in a contract which was made in 1867, for the sale and purchase of a lot of land in this city, against the vendee therein, to obtain a specific performance, or the return of a portion of the purchase money paid thereupon. By the contract in question the defendant undertook to execute to the plaintiff “a proper deed for the conveying and assuring to him the fee simple of the premises, free from all incumbrances,” except certain'mortgages therein mentioned, and the plaintiff agreed to pay therefor $6,500 in money, and to assume the payment of these mortgages, and the sum of $3,500 was then and subsequently paid by him upon the contract. But before the delivery of the deed, the plaintiff discovered, upon an examination of the title, that, in 1860, David Vreeland, the then owner of the premises, mortgaged the same to J. C. Lord for $5,500 ; that in 1861 Vreeland conveyed and assigned the land, with other property, to Henry J. Irving, for the benefit of the assignor’s creditors, which deed of assignment and conveyance was filed in the county clerk’s office as an assignment; that in 1862 a foreclosure suit was brought upon the Lord mortgages, resulting in a judgment, under which the premises were sold by the sheriff to John Douglass, who subsequently conveyed them to one Fitzpatrick, by whom they were granted to the defendant; but that Irving, the assignee of Vreeland, was not made a party to such foreclosure suit. On ascertaining those facts (which I may here say were fully proven upon the trial, as well as the further fact that some of the creditors mentioned in the assignment were still unpaid), the plaintiff objected to the title, upon the ground that the estate and interest of Irving in the premises were unaffected by the decree of foreclosure, and requested the defendant to procure a release of that interest, and subsequently also requested him to return the $3,500. The defendant refused to comply with either of those requests, but made and tendered to the plaintiff a deed of the premises, which deed the plaintiff rejected. Ho evidence was given upon the trial tending to prove that Vreeland’s deed of assignment to Irving had ever been recorded in the office of the register of deeds, nor that the defendant, or either of the persons under whom he derived title subsequent to the sheriff’s sale, had any actual notice or knowledge of the existence of such assignment, and for that reason the learned justice before whom the trial was had, directed a judgment dismissing . the complaint, with costs. The ultimate question to be determined by the court upon this appeal is, whether the deed which was made and tendered by the defendant to the plaintiff would, if accepted by the latter, have vested in him an estate of inheritance in the premises in fee simple, free of incumbrance. For, if it would, such tender and refusal exonerated the defendant from all obligation either to convey the land or to return that portion of the purchase money which he had received upon the contract, and the judgment dismissing the complaint upon the merits was consequently just and proper. The assignment to Irving was not a mere incumbrance upon the title, but was a full and complete deed of conveyance of the premises, in fee, for the purposes o'f the trust. A purchaser, therefore, deriving his title from Yreeland, subsequent to his grant to Irving, must be presumed to have purchased in good faith, and in ignorance of that deed, unless it appears that he had notice thereof at the time of the conveyance to himself. The notice required may be either actual or constructive, the latter being the mere creature of the statute, as provided for in a single section (1 Rev. Stat., 756, § 1), and the other embracing at least such knowledge or information in the actual possession of the purchaser at the time of the conveyance to himself, in regard to the prior grant, as would put a careful, prudent man upon further inquiry. The fact that the deed of assignment was recorded in the county clerk’s office was wholly unimportant. The statute provides for but one kind of constructive notice, viz : the recording of the deed in the register’s office ; and, therefore, the purchaser, finding there, upon examination, no record of a prior grant, would have a right to suppose none existed, unless he had been informed, in some way, that such grant had been made. In the absence of such information, he was no more bound, for his own safety, to search the records in the county clerk’s office for a deed of conveyance, than he was to examine the records of this court for that purpose ; although if he has been informed that a conveyance of the land was embraced in an assignment made by Vreeland to Irving for the benefit of creditors, it probably would have been his duty to examine the records in the clerk’s office, to see if that assignment contained a conveyance of the land. It was incumbent upon the plaintiff to prove, upon the trial, that the assignment to Irving was recorded as a deed in the register’s office prior to the recording there of the sheriff’s deed, or to show by competent evidence that the grantee in that deed, and also his grantee and the defendant, were informed prior to the recording of their deeds, respectively, that the land had previously been conveyed to Vreeland. For if either of those persons took and recorded the conveyance to himself in good faith, and in ignorance of the prior grant, his title was not only good, but he could confer a like perfect title upon one who had a full knowledge of such prior conveyance. “If this were otherwise,” as Chancellor Walworth says, in Varick v. Briggs (6 Paige, 323), “ a bona fide purchaser might be deprived of the power of selling his property for its full value.” As neither of these facts were proven, the complaint was properly dismissed. The judgment must be affirmed, with costs. Jores and Fithiah, JJ., concurred.