16 N.Y.S. 633 | N.Y. Sup. Ct. | 1891
Lead Opinion
The plaintiff commenced the foreclosure of a mortgage. Certain defendants, Miller and others, set up that another mortgage on the same premises, held by one Anderson, not then a party, was a concurrent lien with plaintiff’s mortgage, and that Anderson should be made a party. Thereupon the plaintiff served an amended complaint, setting out further facts, and the claim of Miller and others, defendants, and averring that the plaintiff had not sufficient knowledge to form an opinion whether said Anderson’s mortgage was a prior or a concurrent lien. The plaintiff made Anderson a party. On the trial the court found that the Anderson mortgage was the prior lien. The plaintiff does not appeal, but Emeline Miller, and Emeline Miller and another, executrix and executor of Allen S. Miller, do appeal. Allen S. Miller had previously held the mortgage now held by plaintiff, and had guarantied the payment. The judgment required Emeline Miller, who, as legatee, bad received a certain amount from the estate of Allen S., to make good any deficiency on the foreclosure to the extent of the amount she had received. The two questions, then, are: First. Were the two mortgages concurrent liens, or was the Anderson mortgage a prior lien ? Second. Can there be a judgment against Emeline Miller for deficiency?
The two mortgages were purchase-money mortgages, executed at the same time by one Stupplebeen; the one now held by plaintiff being executed to Richard Miller, the one now held by Anderson being executed to Harvey Miller; each covering the whole property, and each dated April 1, 1870, and payable in 10 years. The learned judge before whom the cause was tried, adopting the verdict of the jury on this point, found that on the day of the date of the said mortgages, and before the actual delivery thereof, it was agreed between said Richard and Harvey that the said mortgage executed to Harvey should be and remain the first lien on the said premises, and should have priority over that executed to Richard. The said judge further finds that, in pursuance of said agreement, the said mortgage to Harvey was im
The appellants, passing the question whether the agreement was valid as between Richard and Harvey, claim certain equities for Wise. They say that the agreement was a fraud upon him. But there is no proof of any intention to defraud him. Indeed, the fact that Harvey’s mortgage was recorded at once indicates a desire to give notice to the world of the priority agreed upon -r and when Wise took the assignment from Richard he could have seen Harvey’s mortgage on record. The fact that Harvey knew that Richard intended to assign his mortgage to Wise is no evidence that a fraud was intended. Nearly $7,000 had been that day paid for the property over and above the two mortgages of $4,000 each. The appellants urge the principle that one who stands by in silence and permits another to deal with his property may be estopped; but that principle has no application, for Harvey at once gave notice to the world of his mortgage, and recorded it as first lien. Wise, then, if he had looked at the records to see whether he was obtaining a good mortgage, would have found Harvey’s mortgage on record. There was nothing in the contents, of either mortgage to show that another similar mortgage existed, as concurrent or otherwise. Wise held the mortgage for about nine months; his assignee and the subsequent assignees for-some seventeen years. During this time it does not appear that any question of fraud upon Wise had been raised, or that any claim had been made that Harvey’s mortgage was not rightfully the prior lien. Even the present plaintiff averred in her complaint that the Harvey mortgage was the prior lien, and therefore did not make the holder a party until compelled to do so. The claim of fraud is certainly stale.
The appellants further urge that, as Wise had agreed some time in January previous to sell his farm to Richard, Wise became in equity the owner of Richard’s mortgage. But the contract between Wise and Richard is not given in evidence. There is no evidence whatever that by that contract Richard was to assign to Wise this mortgage in part payment. This is asserted in the appellants’ points, but is not proved, and is improbable. Nor is there any proof that Harvey thought that Wise expected to receive a first or a concurrent mortgage. This mortgage had no existence when that contract was made; and, as the appellants did not produce the contract, or prove its contents, we cannot assume that that contract referred to a mortgage not in existence, or that it specified such a mortgage to be a first lien. It is impossible, then, on the facts proved, to say that Wise had any equitable rights in Richard’s mortgage. Nor is there any evidence that Richard, when he assigned his mortgage to Wise, represented that it was a prior or a concurrent lien. One who assigns a second mortgage does not, by that act, guaranty that it is a first lien, even though the first mortgage were not on record. Indeed, at another part of their argument the appellants admit that the ques-' tian, so far as the assignees are concerned, is the same as if the contest were-between Richard and Harvey. This was held in Greene v. Warnick, ubi supra, and other cases, in spite of all the protection intended to be given to a bona fide purchaser by the recording acts. If the appellants are correct in this,—■ that is, if the question here is just what it would be if Richard and Harvey -were now the separate owners of the two mortgages,—can there be a doubt that the learned judge was right? The two mortgages as yet not being delivered, the owners agree that Harvey’s shall have priority. Thereupon, in pursuance'of that agreement, Harvey’s is immediately recorded, and, of course,, delivered. Thus the agreement is executed. The plaintiff claims ownership of her mortgage through an assignment and guaranty made by Allen S. Miller, since deceased. Reuben Miller and Emeline Miller were his executor and executrix. His personal property amounted to $5,607.54. There whs a final accounting of the executor and executrix in October, 1884, under which they
Mayham, J., concurs.
Dissenting Opinion
(dissenting.) The two mortgages were concurrent in date, delivery; ■ were were by to create concurrent and equal liens upon the mortgaged premises. The mortgagees were the grantors by deed of the same date to the mortgagor of their equal undivided interest in the premises, and the mortgages were both given to secure parts of the purchase money. They were therefore of equal and concurrent lien, unless some existing equity required that one should have priority over the other,—Boies v. Benham, (N. Y. App.) 28 N. E. Rep. 657;—or a valid agreement to that effect existed between the mortgagees at 'the time of their execution and delivery,—Jones v. Phelps, 2 Barb. Ch. 440. The mere fact that one was recorded before the other did not, of itself, create any priority. Greene v. Warnick, 64 N. Y. 226; Decker v. Boice, 83 N. Y. 215. The respondents do not claim any equitable priority, but rely upon priority created by the agreement between Harvey and Bichard Miller prior to the execution and delivery of the two mortgages. If that agreement (if it may be called such) were free from fraud, it might uphold the claim of priority given by the judgment to the mortgage to Harvey Miller. But I think that agreement must be condemned as fraudulent. Before the execution of ■the two mortgages, and in expectation of their execution, Bichard Miller made .an agreement with Arnold Wise for the purchase by Bichard of Wise’s farm, the $4,000 mortgage to be received by Bichard to be applied in part payment of the purchase money theredf. This agreement was known to Harvey Miller. Some point is made that Harvey did not know that Wise was to take the mortgage from Bichard. Harvey himself testified, when asked if he knew that Wise was to take that mortgage that day; “Bo, not positively; but I supposed it would be turned in. Whether "Wise or somebody else would take it, I didn’t know, but I supposed it would be turned in for that property. I knew no other source in which Bichard would turn that mortgage.” Of course, the person to be cheated, whether Wise or another, is now as immaterial to the question under consideration as it was then to Harvey. The intention was, by a secret agreement between themselves, to import into Bichard’s mortgage a latent defect which would benefit Harvey’s mortgage, and then assign the impaired mortgage without disclosing the impairment, and thus thrust upon the assignee—whether Wise or another was immaterial— ■the risk .to result from their artifice. The suggestions that they did not do
