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. Consider the title to Dayton's property, and Dayton's legal position with respect to Clayton and Banyon. Clayton's unregistered mortgage would take priority over Banyon's registered mortgage, because it was signed and given by Ashton first.

Question

Quizplus · Accepted Answer

In many jurisdictions, the priority of mortgages is determined by the order in which they are registered, not by the date they were signed. Since Clayton did not register his mortgage and Banyon did, Banyon's mortgage would typically take priority over Clayton's unregistered mortgage.

Ashton Wished to Raise Additional Capital for His Business and Arranged