Appellant insists that there is no law for recording an assignment of a mortgage, and that hence the recording imparted no notice to Grey.
In answer to this we say, that in the " Act concerning Conveyances," passed April 16th, 1850, section thirty-six says:
" The term conveyance, as used in this Act, shall be construed to embrace every instrument in writing by which any real estate or interest in real estate is created, aliened, mortgaged, or assigned, except wills," etc., etc.
It follows, then, that an assignment is a " conveyance."
Section eighteen of said Act says that the certificate of acknowledgment, etc., " shall entitle such conveyance to be recorded," etc. Here is law for recording this " conveyance," to wit: assignment.
Section twenty-five of said Act says: " Every such 'conveyance,' or instrument of writing, acknowledgedor proved and certified, and recorded in the manner prescribed in this Act, shall, from the time of filing the same with the Recorder for record, impart notice to all persons of the contents thereof," etc., etc.
These three sections, eighteen, twenty-five, and thirty-six, answer decisively appellant's objection.
II. By a proper construction of the statute, the recording of a conveyance imparts notice to all persons, and not merely to subsequent purchasers and mortgagees.
In Dennis v. Burritt, (6 Cal. 670) the only question necessary to be passed upon was, whether constructive notice was or was not sufficient to charge a party with fraud, etc. It is true, the Judge who wrote the opinion went further than required by the record, and expressed an opinion upon the construction of the twenty-fifth section of the conveyancing act; but this opinion is not authority, and the reasoning in support of it is most unsatisfactory. To say that because " subsequent purchasers and mortgagees shall be deemed to purchase with notice," therefore the filing, etc., shall not be notice, (when the statute, in the plainest possible language, says it shall be) is a species of reasoning which I admit I do not understand. Instead of saying, " the second subdivision limits the general words of the first part of the section," it had been more appropriate to have said annihilated, for that is the effect of this dictum of the Chief Justice (if it has any effect). I think it evident that the Legislature intended exactly what they said--that the filing, etc., shall be notice, etc. If they did not mean it, why did they use that language? they could have easily struck it out. Stare decisis, a principle which has led to more error than any other known to the law, based upon the decision of States whose statutes are materially different from ours, is evidently the mother of this erroneous dictum .
If the Court possesses the power to anihilate a portion of a statute, and it should be found necessary to do so with this Act--a thing I think wholly uncalled for--then I respectfully suggest that the second subdivision, instead of the first, should be set at nought:
1. Because by virtue of the terms of the first subdivision of the section, notice is imparted to all persons, by the filing for record, etc., and " subsequent purchasers and mortgagees" beingincluded in the category (of " all persons" ) are thus notified as fully as are any other persons; and being thus notified, they would certainly be deemed to " purchase with notice" just as fully without as with the second subdivision.
2. Because thereby the manifest intention of the Legislature would be carried out, instead of defeated.
3. Because by any other construction the manifest intention of the Legislature is defeated, and a positive provision of a plain statute violated and set at naught, without any sufficient reason therefor.
4. Because gross injustice will be done to many of our citizens, if constructive notice cannot be given, as they had a right to suppose, by the terms of said first subdivision, it might be.
III. At common law there was no necessity for notice of the assignment. (Robinson v. Weeks, 1 Code Reports, [New Series] 311; Davenport v. Ludlow, 3 Code Reports, 66; Countryman v. Boyer , 2 Id. 4; 3 Hill, 228; 3 Howard, 386; Morgan v. Lowe , 5 Cal. 325; Beckwith v. Union Bank of New York, 5 Selden, 211.) And from the above authorities, there appears to be no necessity for this notice under the New York Code; and as our Codeis almost a transcript of that of New York, we claim that there is no necessity for it here.
JUDGES: Cope, J. delivered the opinion of the Court. Norton, J. concurring.
OPINION
COPE, Judge
The defendant Grey, being indebted to one Corwin in the sum of eleven hundred and fifty dollars, executed to him a mortgage upon certain property in the city of San Francisco to secure its payment. The mortgage was executed on the eighteenth of April, 1859, and on the thirteenth of August, 1859, Corwin assigned the debt and mortgage to the plaintiff; and on the twenty-fifth of the same month the assignment was recorded in the office of the County Recorder. The suit is brought to recover the debt and to foreclose the mortgage, and Grey sets up certain judgments against Corwin as counter-claims, these judgments having been assigned to him on the twentieth of April, 1860. No actual notice had then been given of the assignment to the plaintiff, and the question is whether the judgments can be relied upon as counter-claims.
The fourth section of the Practice Act provides that " in the case of an assignment of a thing in action, the action by the assignee shall be without prejudice to any set-off or other defense, existing at the time of or before notice of the assignment." This section merely adopts the rule which has always prevailed in equity in such cases, and there is no doubt that the judgments are properly pleaded as counter-claims, unless the record of the assignment is to be regarded as imparting notice. The Act concerning Conveyances declares that the term " conveyance" shall be construed to embrace " every instrument in writing by which any real estate or interest in real estate is created, aliened, mortgaged or assigned," and it is possible that this provision is sufficiently broad to include an assignment of a mortgage. In the view we take of the matter, however, it is unnecessary to determine this point, as we are satisfied that the only effect of recording a conveyance is to impart notice to subsequent purchasers and mortgagees. It is true, the Act provides that a conveyance " certified and recorded," etc., " shall impart notice to all persons of the contents thereof; " but the effect of this language is controlled by the further provision that " subsequent purchasers and mortgagees shall be deemed to purchase with notice." The " persons" alluded to are persons acquiring interests as " purchasers or mortgagees," and it was not intended that the record should be notice to all the world, or even to purchasers and mortgagees in relation to other matters. It is notice so far as to protect the rights of the party claiming under the conveyance; but beyond that it has no efficacy for any purpose, and is not notice, except as to subsequently acquired interests. This construction is in accordance with the opinion expressed in Dennis v. Burritt, (6 Cal. 670) in which case, however, no definite conclusion upon the subject was arrived at.
The result is that Grey was entitled to the benefit of the judgments, as counter-claims; and the judgment of the Court below is reversed, and the cause remanded for a new trial.