Mortgages—Notice—Vendor and Purchaser—Vendor Note Charged with Constructive Notice of Subsequent Mortgage of Contract Purchaser's Equity—Mortgagee Required to Notify Vendor to Protect Security Interest.—Kendrick v. Davis, 75 Wash. Dec. 2d 470, 452 P.2d 222 (1969)

Authors

anon

Abstract

Seller and purchaser executed and recorded an installment contract for the sale of land which provided for forfeiture in the event of the purchaser's default. For security purposes, the purchaser transferred his interest in the contract and land to a mortgagee by means of a recorded assignment of contract and deed. When the purchaser defaulted on the contract, the seller sent notice of intent to forfeit to the purchaser but not to the mortgagee, recorded a declaration of forfeiture, and brought an action to quiet title in himself. The mortgagee appeared as a defendant in the seller's action, claiming that his security interest in the land could not be extinguished without notice to him by the seller. He contended that he, as well as the purchaser, was entitled to notice of intent to forfeit and to an opportunity to cure the purchaser's default by making the delinquent payments and assuming the purchaser's duties under the contract. The seller argued that he need not give notice to the mortgagee because he had no knowledge of the mortgagee's interest, the mortgagee having failed to notify him. The mortgagee replied that lack of actual knowledge did not excuse the seller from his duty to notify him and that, at any rate, the seller had constructive notice of the security interest because the assignment of contract and deed had been recorded. Held: The recording of an instrument creating a security interest in a purchaser's equity under a land sale contract does not give constructive notice of the security interest to a person who acquired his interest in the land by an instrument which was recorded prior to the security instrument. The court explicitly overruled Norlin v. Mongomery to the extent that it is inconsistent with the instant case and ruled that the burden is on the subsequent mortgagee to give notice of his interest to the holder of an antecedent interest. Kendrick v. Davis, 75 Wash. Dec. 2d 470, 452 P.2d 222 (1969) (Hill and Rosellini, JJ., dissenting).

First Page

645

Recommended Citation

anon, Recent Developments, Mortgages—Notice—Vendor and Purchaser—Vendor Note Charged with Constructive Notice of Subsequent Mortgage of Contract Purchaser's Equity—Mortgagee Required to Notify Vendor to Protect Security Interest.—Kendrick v. Davis, 75 Wash. Dec. 2d 470, 452 P.2d 222 (1969), 45 Wash. L. Rev. 645 (1970).
Available at: https://digitalcommons.law.uw.edu/wlr/vol45/iss3/11