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Massachusetts Agencies

Constructive Notice of Subordinate Matters

Mortgages

Read the cases of Strong v. Stoneham Co-operative Bank, 2 Mass.App.Ct. 828, 310 N.E.2d 607 (1974) and the companion case, Strong v. Stoneham Co-operative Bank, 375 Mass. 662, 260 N.E.2d 646 (1970) which, although having to do with the priority of an amended mortgage over subordinate matters appearing of record after the mortgage but before the amendatory instruments, contained the following language in the decisions:

The priorities were not affected by the agreements to increase the interest rates payable . . . under . . . the notes . . . . Those agreements were binding on the parties thereto . . . . We need not decide whether they were valid against non-consenting junior encumbrancers of whom the bank had actual or constructive notice . . . since there was no evidence that the bank had such notice. While it appears that the junior mortgages were recorded before the amendatory agreement had been made, the recording of those mortgages was not constructive notice of their existence to the mortgagee under the first mortgages. (Emphasis added).

Apparently, then, the mere recording of the mortgages, which otherwise would import constructive notice, did not impart such notice to the holder of an already-recorded mortgage.

Note that the court stated, " We need not decide whether [the mortgages] were valid against non-consenting junior encumbrancers of whom the bank had actual or constructive notice . . . since there was no evidence that the bank had such notice," leaving unanswered the question whether actual notice would have affected the outcome of the case.