Page:North Dakota Reports (vol. 1).pdf/392

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368
NORTH DAKOTA REPORTS.

that defendant’s foreclosure proceedings, culminating in this deed, be annulled by the court on the theory that it was the defendant’s duty to apply the insurance money in extinguishment of her lien, because of her equitable duty not to impair the subordinate lien by her conduct with respect to the security. Plaintiffs insist that she had two distinct securities out of which she could collect her debt—the land and the insurance money; that they held a lien on only one of these securities—the land; that defendant owed to them the duty of obtaining their pay from the insurance money, which was sufficient to extinguish her lien; and that equity will regard such duty as performed, and the lien wiped out, on the principle that one who disregards duty shall not assert his own dereliction to the detriment of another to whom that duty was owing. In all this record we find nothing to render these considerations pertinent. There was no equitable duty, because defendant had no knowledge of the rights of the plaintiffs as junior incumbrancers. Equity compels no one to respect an unknown right. Defendant did not know of plaintiffs’ mortgage when she suffered this insurance money to pass from her control to the mortgagor. There is no averment of notice in the complaint. This demurrable defect was not cured by the reception without objection of evidence of notice on the trial. Under such a state of the record, the complaint might be amended to conform to the proof. But there is no such evidence in the record. There is no such fact found. There is no pretense of actual notice. Without notice of the lien to be protected, there arose no duty to protect it. Deuster v. McCamus, 14 Wis. 333; Straight v. Harris, id, 509; Insurance Co. v. Halsey, 8 N. Y. 271; Vanorden v. Johnson, 14 N. J. Eq. 376; Ward’s Ex’rs v. Hague, 25 N. J. Eq. 397; Wade, Notice, § 2038, and cases cited. This principle is elementary. It is true that constructive notice is held to be sufficient to create the duty. But defendant did not have even constructive notice of plaintiffs’ inferior lien. The record of their mortgage constituted no such notice. It is only as to subsequent incumbrancers or purchasers that the recording of a mortgage or deed is notice. So the statute is written. §§ 3293, 4369, Comp. Laws. Similar statutes have been so constructed in many jurisdictions. Deus-