McCabe v. Grey

Cope, J. delivered the opinion of the Court—Norton, J. concurring. 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 setioff 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 [516]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.