
    Ranney v. Hardy — Zeller v. Bading.
    
      Occupation of premises notice to mortgagee — Deed—Contract for — Rights of subsequent mortgagee — Payment—Evidence of.
    
    1. A. loaned to B. a sum of money, receiving B.’s promissory note and a mortgage on real estate to secure the same; but when A. accepted the note and mortgage, C. was in actual possession of the premises, and resided thereon with his family. Held., that A. was chargeable with notice of O.’s rights and interest in the premises; and A. having assigned the note and mortgage, his assignee occupied the same situation; nor will the fact that A. and his assignee did not know that O. was in possession, make any difference.
    2. B. sold to O. real estate, placed him in possession, and agreed in writing to execute to him a deed on payment of the purchase-money in monthly installments. Subsequently B. executed to A. a mortgage on the premises, which was recorded. Held, that such mortgage was valid, hut subordinate to the rights of C.; that O. may, validly, make payments of purchase-money to B., until A. or his assignee, by suit or in some other unequivocal form, asserts the right to receive from C. the unpaid installments of purchase-money; and that the assignee of O. has the same right.
    3. The assignee of A. asserted, by action, his right against B., 0., and the assignee of 0., to such unpaid purchase-money. Held, that a deed from B. to the assignee of 0., reciting the payment of the purchase-money, is not, as against the assignee of A., evidence of such payment.
    Error to tbe District Court of Cuyahoga county.
    April 23, 1872, J. II. Hardy, owner in fee of real estate in the city of Cleveland, known as lot 17, entered into a contract in writing with J. C. McKinnon for tbe sale of it to him for $1,300, payable $20 in band and the balance in monthly installments of $20. McKinnon made the advance payment and was placed in possession of the premises. In the month following [May 9, 1872], Hardy borrowed of David Rauney $1,500, and gave him a promissory note for tbe amount, payable in one year. He also executed and delivered to him a mortgage on three parcels of real estate, one of which was lot 17; but before accepting the mortgage, Ranney went upon the various parcels of real estate embraced in it, and saw McKiunon’s wife and children occupying the dwelling-house upon lot 17. The mortgage was entered for record on the day of its execution and was recorded the same month. McKinnon remained in possession with his family until November 23,1874, paying Hardy in the meantime, on the the contract, $620, at which time he sold and assigned all his right, title, and interest in the premises to Michael Scanlon and placed him in possession. Scanlon having remained in possession until June 3, 1875, and in the meantime paid to Hardy $120 of the purchase-money, sold and assigned all his right, title, and interest in the premises to John Caldwell, and placed him in possession, and, on the same day, Hardy, his wife joining, executed to Caldwell a. deed in fee-simple for the premises, with covenants of warranty and seizin, and against incumbrances, which deed was recorded the same month. In the meantime, on February 19, 1875, David Ranney assigned and transferred the note and mortgage to C. W. Ranney.
    January 3, 1877, C. W. Ranney brought suit in the court of common pleas of Cuyahoga county to foreclose the mortgage. Among the defendants were Hardy, Scanlon, and Caldwell. After a trial in the court of common pleas, the cause was- appealed to and tried in the district court. There it appeared that neither McKinnon, Scanlon, nor Caldwell had ever heard of the existence of the mortgage to Ranney, until at a time subsequent to the execution and .delivery' of such deed to Caldwell. There is no express finding that all the purchase-money had been paid, but in the answer of Scanlon and Cakhvell, it is averred that it was all paid before the execution of such deed, though this is denied in the reply, and the only proof as to payments, except that above stated, is the deed, in which it is recited that the consideration of $1,300 had been paid by Caldwell. All the lands embraced in the mortgage would not sell for sufficient to satisfy the mortgage debt.
    The district court held that Ranney was not entitled to enforce his mortgage against lot 17 for any sum whatever, and this petition in error is filed to reverse that judgment.
    
      Zeller v. Bading is a case which was prosecuted in the court of common pleas and carried to the district court of the same county. In its material facts it is not distinguishable from Ranney v. Hardy, except that the mortgagee, Zeller, when he accepted the mortgage, did not know that .Bading, the purchaser, was in possession of and resided upon the premises. In both courts the judgment was in favor of Bading, and this petition in'error is prosecuted by Zeller to reverse the judgments.
    
      JL. H. Ware, Mix, Noble 'White, and Burke § Sanders, for plaintiffs in error.
    
      Adams § Bishop, Wilson ‡ Lykora, and Robinson § White, for defendants in error.
   Okey, J.

Upon the facts appearing in the foregoing statement, we are of opinion :

1. As David Ranney, when he loaned the money to Hardy- and acceptec| from him a mortgage ’on lot 17, knew that McKinnon was residing on the lot with his family, he was charged with knowledge of the terms and conditions upon which such possession was held. Cunningham v. Buckingham, 1 Ohio, 261; House v. Beatty, 7 Ohio (2 pt.) 84; Kelley v. Stanbery, 13 Ohio, 408; Williams v. Sprigg, 6 Ohio St. 585 ; McKinzie v. Perrill, 15 Ohio St. 162; Bank v. Sawyer, 38 Ohio St. 339, 343. And the other case [Zeller v. Bading) presenting the question whether knowledge by the mortgagee, at the time he accepted the mortgage, that the purchaser was in possession, was material, we answer the question in the negative. True, in some of the cases above cited, expressions may be found which seem to support the claim that such knowledge is important; but in neither of them was the fact material to the decision, and where, as in the case now before us,the premises are occupied by aman with his family as a homestead, no well considered case can be found, aside from those controlled by statutory provision, in which it was held that such possession was not notice to subsequent purchasers and mortgagees of the rights and interests of such occupant, although such purchaser or mortgagee did not know the premises were occupied. LeNeve v. LeNeve, Amb. 436; s. c., 2 Lead. Cas. in Eq. 35*, 63*, 4th Am. ed. 180; Wade on Notice, §§ 273-306; Holmes v. Powell, 8 De G. M. & G. 572 ; Hottenstein v. Lerch, 104 Pa. St. 454; Noyes v. Hall, 97 U. S. 34; Coari v. Olsen, 91 Ill. 273; Brunson v. Brooks, 68 Ala. 248 ; Pique v. Arendale, 71 Ala. 91. If the possession is not exclusive, or is not of a character to fairly give information that the occupant is asserting dominion over the property under some claim of right or authority, it will not operate as notice. Williams v. Sprigg, supra; Pope v. Allen, 90 N. Y. 298; Lincoln v. Thompson, 75 Mo. 613 ; Jeffersonville, etc., R. Co. v. Oyler, 82 Ind. 394; White v. White, 105 Ill. 313. But neither of the cases before us is within cases of that class.

2. As the note to David Ranney, secured by mortgage, ■was overdue at the time he indorsed it to C. W. Ranney, the latter occupies no better position than the indorser. Arid according to the law of this state (and in Illinois, Minnesota, Oregon, and Louisiana the rule seems to be the same) the fact that the note was overdue is not material. Baily v. Smith, 14 Ohio St. 396. Indeed, with us a mortgage is, both at law and in equity, a mere security for a debt, and the remedies to which the mortgagee or his assignee may resort are only afforded with a view to enforce payment of the debt. Harkrader v. Lieby, 4 Ohio St. 602; Williams v. Englebrecht, 37 Ohio St. 383; Rev. Stats., § 5782, as amended in 1883, 80 Ohio L. 66.

3. McKinnon purchasing in April, 1872, was not charged with constructive notice of the mortgage to David Ranney, subsequently executed and recorded, and might properly make payments in pursuance of his contract until notified by Ranney, in some form, that he claimed the unpaid purchase-money by force of his mortgage. Manley v. Hunt, 1 Ohio, 257; 1 Ohio St. 112; Doolittle v. Cook, 75 Ill. 354; approved Small v. Stagg, 95 Ill. 39; Laverty v. Moore, 33 N. Y. 658; Trustees of Onion College v. Wheeler, 61 N. Y. 88; Young v. Guy, 87 N. Y. 457; Kerr v. Day, 14 Pa. St. 112; Siter's Appeal, 26 Pa. St. 178; Frick's Appeal, 101 Pa. St. 485.

4. Precisely the same rule applicable to McKinnon applied to Seanlan and Caldwell. They were assignees and succeeded to the rights of McKinnon, and were entitled to the same protection in making payments to the vendor. The Trustees of Union College v. Wheeler, supra.

5. The action of C. W. Ranney in the one case, and Zeller in the other case, in view of the issues made therein, were, in effect, the assertion of claims, which they might well make, for the unpaid purchase-money. Young v. Guy, supra. By the pleadings in Ranney’s case, the issue is made whether any pai’t of the purchase-money remained unpaid; and Caldwell was asserting that the premises were not subject to the mortgage for any amount for the reason that he was a bona fide purchaser and that the purchase-money had been fully paid. Under the circumstances, we think the burden was on him to show that fact. The only evidence to show that the purchase-money, except as appears in the above statement of the case, had been paid by McKinnon? Seanlan, and Caldwell, was the deed from Hardy to the latter. This recited the payment of the whole purchase-money, and, as between the parties to it, was prima facie evidence of such payment; .but such recital in the deed was no evidence against Ranney. Rose v. Taunton, 119 Mass. 99.

6. It follows, therefore, that the district court erred in holding, on the facts appearing in this record, that Ranney was entitled to no relief. Whether or not he was entitled to relief depended upon .the fact whether the whole purchase-money had been paid by McKinnon, Scanlon, and Caldwell before he gave notice to them, by suit or in some equally unequivocal form, that he would claim the balance of such unpaid purchase-money. If it appear that the whole of the purchase-money was paid before he took any such step, he is entitled .to no relief; but if at the time he first asserted the right to such purchase-money, any part of it remained unpaid, to that extent he is entitled to a decree against lot 17.

In Zeller’s case there is no error.

7. Counsel for plaintiffs in error insist that in Ranney’s case, the limited ground upon which we have placed his possible right to a decree, and the judgment denying any relief to Zeller, are inconsistent with principles recognized in several cases in this court, especially Grandin v. Anderson, 15 Ohio St. 286; Lewis v. White, 16 Ohio St. 444; McCombs v. Howard, 18 Ohio St. 436; Lefferson v. Dallas, Dayton, etc. R. C. v. Lewton, 20 Ohio St. 68, 401. But we do not think so.

Judgment reversed in Ranney v. Hardy, and affirmed in Zeller v. Bading.  