Knell v. Green Street Building Ass'n

Baetol, C. J.,' delivered the opinion of the Court. This is a contest with regard to the proper distribution among creditors of a fund arising from the sale of certain leasehold property of the common debtor, Mary Kraft. The appellee claims as mortgagee of the specific property sold; the appellant claims as creditor upon a judgment recovered against the debtor and mortgagor, after the date of the execution of the mortgage, and before it had been recorded. The mortgage was duly executed and acknowledged on the 19th day of June, 1868, and was placed on record on the 30th day of Kovember, 1868.

The judgment under which the appellant claims was confessed by Mary Kraft, in favor of Charles Thompson, on the- 26th day of September, 1868, and was assigned to the appellant on the 24th day of Decern ⁷⁰ ber, 1868. The judgment was for $2,000, which it appears by the proof was for money loaned by Thompson to Mrs. Kraft at the time; the judgment being given as a security therefor. On the same day Mrs. Kraft made a voluntary deed to William P. Hoopes, conveying all her property in trust for the benefit of her creditors, giving priority to “ all judgments and record liens of every kind.” Afterwards, on the 11th day of November, 1868, she made another deed, conveying to Henry Knell, the appellant, all her property of every kind in trust for the payment of her debts. Knell, the grantee, in the second deed, filed a bill impeaching the first deed as fraudulent; but by the decision of this Court, 31 Md., 550 , the validity of the deed to Hoopes was established.

In the meantime the property was sold by Samuel Snow-den, Esq., receiver, and the fund arising from the sale being insufficient to pay both the judgment and the mortgage, it becomes necessary to decide which is entitled to priority. The question arises upon the appellant’s exceptions to the auditor’s report and account E, made in conformity with the opinion and direction of the Circuit Court, by which the fund is applied in part payment of the mortgage, to the exclusion of the judgment. The mortgage was duly executed, acknowledged' and recorded, within six months from its date, as required by the Code, Article 24, sections 1, 13, 28. Section 14 provides that when so acknowledged and recorded, “it shall tahe effect, as between the parties thereto, from its date.” By the operation of this section, so far as Mrs. Kraft is concerned, the mortgage being recorded within six months after its date, as required by the Code, related back and took effect from its date, the 19th day of June, 1868.

The judgment in favor of Thompson was rendered on the 26th day of September thereafter, when the only estate and interest of Mary Kraft in the property, upon which the judgment was a lien, under the Act of 1861, chap. 70, was the equity of redemption. The general rule is that a judgment^ ⁷¹ is a lien only on the debtor’s interest and estate in the land; a purchaser under an execution takes only the estate belonging to the debtor in the judgment and execution. But it is contended by the appellant, that as against a judgment creditor, without actual notice of the mortgage, that instrument operates only from the time it is recorded. In support of this position we have been referred to the 16th section of Article 21, of the Code.

That section relates only to the case “ when there are two or more deeds conveying the same lands or chattels real,” and provides that “ the deed or deeds first recorded according to law, shall be preferred, if made bona fide and upon good and valuable consideration,” and the section by its terms applies “to all deeds of mortgage and to all other deeds or conveyances, to the validity of which recording is necessary.” A judgment creditor is not within^ the letter, or spirit of this provision, and cannot claim its ? protection. It is intended to protect against unrecorded deeds/ and mortgages, the title of a bona fide