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Keywords

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MidCountry Bank v. Krueger, 782 N.W.2d 238

Facts

The dispute arose when MidCountry Bank sought to foreclose on a mortgage encumbering property owned by Cherolyn Hinshaw. MidCountry argued that its mortgage was properly recorded before Hinshaw's purchase, while Hinshaw and PHH Home Loans contended that the mortgage was not properly recorded and therefore they were good faith purchasers. The district court initially ruled in favor of Hinshaw and PHH, but the Court of Appeals reversed this decision, leading to the Supreme Court's review.

The dispute arose when MidCountry Bank sought to foreclose on a mortgage encumbering property owned by Cherolyn Hinshaw.

Issue

Whether the MidCountry mortgage was 'properly recorded' under Minn.Stat. § 507.32, thereby giving constructive notice to a subsequent purchaser and mortgagee.

Whether the MidCountry mortgage was 'properly recorded' under Minn.Stat. § 507.32, thereby giving constructive notice to a subsequent purchaser and mortgagee.

Rule

Indexing of real-property instruments is part of the recording process, and a purchaser is charged with constructive notice of the contents of a mortgage recorded in a county recorder's grantor-grantee index.

Indexing of real-property instruments is part of the recording process, and a purchaser is charged with constructive notice of the contents of a mortgage recorded in a county recorder's grantor-grantee index.

Analysis

The court determined that the MidCountry mortgage was indexed in the grantor-grantee index and bore the required recording label, which constituted presumptive proof of proper recording. Despite the imperfect indexing, the mortgage was available for review, and the court concluded that Hinshaw and PHH had constructive notice of the mortgage's existence.

The court determined that the MidCountry mortgage was indexed in the grantor-grantee index and bore the required recording label, which constituted presumptive proof of proper recording.

Conclusion

The Supreme Court affirmed the Court of Appeals' decision, holding that the MidCountry mortgage was properly recorded and that Hinshaw and PHH were not good faith purchasers.

The Supreme Court affirmed the Court of Appeals' decision, holding that the MidCountry mortgage was properly recorded and that Hinshaw and PHH were not good faith purchasers.

Who won?

MidCountry Bank prevailed in the case because the court found that the mortgage was properly recorded, thus giving constructive notice to subsequent purchasers.

MidCountry Bank prevailed in the case because the court found that the mortgage was properly recorded, thus giving constructive notice to subsequent purchasers.

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