Ashton wished to raise additional capital for his business and arranged with Banyon for a $10,000 mortgage on his estate, Blackacre. Ashton did not disclose the fact that he had previously borrowed $10,000 from Clayton by way of a mortgage, and Clayton had not registered his mortgage against the title of Blackacre. Shortly after the mortgage to Banyon was registered, Ashton conveyed the estate to Dayton, for $25,000. Dayton was unaware of the mortgages to Banyon and Clayton, and did not examine the title to Blackacre when he registered his deed. Dayton was unaware of the mortgage to Banyon, and consequently, Dayton's title to Blackacre would not be subject to the mortgage.

Question

Quizplus · Accepted Answer

Dayton's title to Blackacre would still be subject to Banyon's mortgage if it was properly registered before Dayton acquired the estate, regardless of Dayton's knowledge or examination of the title. Registration of the mortgage serves to notify all subsequent purchasers of its existence.

Ashton Wished to Raise Additional Capital for His Business and Arranged