Tefft v. Munson, 57 N.Y. 97 (1874)

A grantor who conveys land with a warranty of title is estopped from later asserting a title acquired after the conveyance against the grantee; this estoppel also binds subsequent purchasers who are in privity of estate with the grantor, and a recorded mortgage from the grantor before acquiring title takes priority over a deed from the grantor after acquiring title, even if the deed is recorded first.

Summary

This case addresses the issue of priority between a mortgage recorded before the mortgagor obtained title and a subsequent deed recorded after the mortgagor obtained title. The court held that the mortgage took priority based on the doctrine of estoppel by deed. Martin B. Perkins mortgaged land to the loan commissioners with a warranty of title, then later acquired title and conveyed it to Tefft. Tefft argued his deed had priority because the mortgage was recorded before Perkins owned the land. The court rejected this argument, holding that Perkins was estopped from denying he had title when he mortgaged the property, and Tefft, as his privy in estate, was similarly estopped.

Facts

1. Martin B. Perkins executed a mortgage on certain lands to the loan commissioners, containing a warranty of title.
2. At the time of the mortgage, Martin B. Perkins did not actually own the land.
3. The mortgage was duly recorded.
4. Subsequently, Martin B. Perkins’ father conveyed the land to Martin B. Perkins.
5. Martin B. Perkins then conveyed the land to the plaintiff, Tefft.
6. Tefft recorded the deed from Perkins.

Procedural History

The plaintiff, Tefft, brought suit claiming his deed had priority over the mortgage to the loan commissioners. The lower court ruled in favor of the defendant (Munson, representing the loan commissioners). Tefft appealed to the New York Court of Appeals.

Issue(s)

1. Whether a mortgage recorded before the mortgagor obtains title has priority over a deed from the mortgagor after he obtains title, when the deed is recorded after the mortgage.
2. Whether the plaintiff, as a subsequent grantee, is estopped from denying that his grantor had title at the time of the mortgage.

Holding

1. Yes, because the mortgagor is estopped by his warranty of title from denying that he had title at the time of the mortgage. The estoppel binds the land.
2. Yes, because the plaintiff is in privity of estate with his grantor and is therefore also estopped from denying the grantor’s title at the time of the mortgage.

Court’s Reasoning

The court based its decision on the doctrine of estoppel by deed. The court stated, “It is a principle of law, not now open to doubt, that, ordinarily, if one who has no title to lands, nevertheless makes a deed of conveyance, with warranty, and afterward himself purchases and receives the title, the same will vest immediately in his grantee who holds his deed with warranty as against such grantor by estoppel. In such case the estoppel is held to bind the land; and to create an estate and interest in it.” The court reasoned that because Perkins warranted the title in the mortgage, he and those in privity with him (like Tefft) were estopped from later denying that he had title at the time of the mortgage. The court emphasized that the estoppel binds not only the parties but also “all privies in estate, privies in blood and privies in law.” Therefore, for purposes of determining priority, Perkins must be treated as having had title at the time the mortgage was executed and recorded. This makes the mortgage prior to Tefft’s deed. The court referenced the analogous case of White v. Patten which involved similar facts and arrived at the same conclusion. The Court reasoned that registry laws do not protect a purchaser who is estopped from denying the prior encumbrance.