Ferguson v. Miller
Before: Murray
Synopsis
A mortgagee in possession has a legal title against the whole world, subject to the rights of the mortgagor; therefore, where he mortgaged the property, and subsequently erected a building on it—for the cost of which a mechanics' lien was filed—the holder of the lien cannot object to the legality of the mortgages, in the face of which he contracted.
It is not the province of the mechanics in such a case to determine the legality of the recorded title, but having contracted with notice of the encumbrances, they are postponed till the encumbrances are first paid.
Mr. Chief Justice Murray, after stating the facts, delivered the opinion of the Court. Mr. Justice Heydenfeldt concurred.
Miller having purchased from Parks and entered into possession, may be regarded as a mortgagee in possession, and as such had a legal title against the whole world, subject to the rights of the mortgagor. If Miller had been in possession, simply relying on that possession, it is evident that his title would have been sufficient to warrant him in mortgaging the premises. IIow, then, can the fact that he was also a mortgagee, weaken the strength of that possession ? The mechanics who erected the house for Miller, were bound by the previous outstanding mortgages executed by him. It was not their province to determine the legality of his recorded title, but having contracted with him in the face of these encumbrances, they are postponed until they shall be first paid off.
Judgment affirmed.
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