Evans Bros. v. Roanoke Savings Bank

Harrison and Buchanan, JJ.

(dissenting).

We concur in the conclusion reached by the court that the Covenant Building & Loan Association was an innocent purchaser for value, unaffected by the fact that the notes held by the Roanoke Savings Bank were outstanding and unpaid at the time the deed securing them was released of record.

We further concur in the view taken that Evans Bros., having paid over to Mrs. Reed $469 under their deed of trust while the prior deed securing the Roanoke Savings Bank stood unreleased, are, to the extent of that $469, subsequent m priority to the lien of said bank.

*305We are unable to concur in the conclusion reached by a majority of the court that Evans Bros, are subsequent in priority to the Roanoke Savings Bank as to the $131 paid by them to Mrs. Reed. After paying the $469 they declined to make further payments on account of the $600 secured to them until the lien now claimed by the Roanoke Savings Bank was released. O. A. Myers then released of record that incumbrance, of which she was the apparent owner, and thereupon Evans Bros, paid over to Mrs. Reed $131, the balance of the $600 secured to them, after deducting the $469 theretofore paid. Evans Bros, having declined to pay over the $131 .until the lien under which the bank claims was released, we are of opinion that to the extent of the $131, they were purchasers for value, without notice, and were unaffected by the fact that the notes held by the bank were not paid.

The question is not one of balancing equities between the parties, nor is it, in our view, material that the legal title to the land was outstanding in the trustee in a deed of trust prior to that released. The necessary effect of the statute was, when the deed of trust securing the notes held by the bank was released, that the title to the land was clear so far as that incumbrance was concerned, and bona fide rights therein subsequently acquired could no longer be affected thereby.

The object of registry acts is to enable any person about to deal with reference to any parcel of land to discover, or find the means of discovering, every existing and outstanding estate, title, interest in, or incumbrance upon the lands which could affect the rights of a bona fide purchaser. 2 Pom, Eq. Jur. sec. 649. And when such a purchaser has gone to the record, and seen that a recorded incumbrance upon the land has been released in the manner prescribed by statute, and, upon the faith of that release, has made his purchase, and paid the consideration, we are of opinion that he takes the land free from that incumbrance, without regard to the question whether the estate which he acquires is legal or equitable.

*306Under the construction placed upon sec. 2498 of the Code by the majority- of the court, one could not deal with an equitable estate with incumbrances upon it, however careful he might be to see that those incumbrances were released in the manner prescribed by law. The record which discloses the lien or incumbrance binds him, but the same record, which also shows the same lien or incumbrance to be regularly released, does not protect him.

Reversed in part.