## Facts

- Mary T. Constant, through her attorney-agent Deane, took a mortgage from Elizabeth Meehan in February 1883 to secure Meehan’s debt to Constant.
- Deane failed to record Constant’s mortgage; it was mistakenly filed among satisfied mortgages.
- In January 1884, Meehan executed a second mortgage on the same property to the University of Rochester.
- Deane acted as the University’s attorney-agent in the January 1884 transaction.
- The University gave value by surrendering a prior mortgage (and accrued interest) in exchange for the new mortgage.
- Constant (later, her executors) sought foreclosure and asserted that the earlier unrecorded Constant mortgage had priority over the University’s later mortgage.
- The dispute centered on whether Deane’s knowledge of Constant’s prior mortgage, acquired while representing Constant, should be imputed to the University when he later represented the University.

## Issues

1. Whether a subsequent mortgagee for value is chargeable with constructive notice of a prior unrecorded mortgage based solely on its agent-attorney’s knowledge acquired in a separate, earlier transaction for a different client.
2. If not, whether the later mortgage taken for value and recorded has priority over the earlier unrecorded mortgage.

## Decision

- The court held the University was a mortgagee for valuable consideration.
- The court held the University was not chargeable with notice of Constant’s prior unrecorded mortgage merely because Deane had learned of it in an earlier, unrelated representation.
- The court reversed the judgment for Constant and held the University’s mortgage was the prior lien.

## Legal Principles

- An agent’s knowledge acquired in one transaction is not automatically imputed to a principal in a later, distinct transaction.
- Imputed notice in a later transaction requires proof that the agent had the relevant fact present in mind at the time of the later dealing, or that the transactions were so connected that the earlier knowledge would reasonably operate in the later one.
- A subsequent mortgagee for value without imputable notice is protected against an earlier unrecorded mortgage under the recording system.

## Conclusion

Because the University took its mortgage for value and Deane’s earlier knowledge of Constant’s unrecorded mortgage was not imputable in an unrelated later transaction, the University’s recorded mortgage had priority over Constant’s unrecorded mortgage.


Constant v. Univ. of Rochester, 19 N.E. 631 (N.Y. 1889)