Governeur v. Lynch

| New York Court of Chancery | Aug 24, 1830

The Chancellor.

Where lands belonging to several persons are covered by a mortgage given by the person from whom they all derive their titles, the lands last s.old by him ' are first liable to satisfy the incumbrance ; and the several • parcels must be sold by the master in the inverse order of their alienation. Where the purchase money has been paid in good faith, the first purchaser has the prior equity, although the consideration was not actually paid until after other portions of the lands had been purchased and paid for by the vendee.

■ If a vendee is in possession of land, under a contract to purchase, a subsequent purchaser or mortgagee has construe-.., tive notice of his equitable rights ; and takes the land subject to his prior equity. (5 John. Ch. R. 29. 4 Little’s R. 317. I Munro’s R. 301.) If the purchase money has been paid before notice of and prior to the recording of a subsequent mortgage, the mortgagee will have no claim upon the land. Where a part remains unpaid, he will have an equitable lien thereon to the extent of the unpaid purchase money.

The decree in this case must be drawn up in conformity to these principles; and if the lands not contracted for at the date of the mortgage are insufficient to pay the amount due to the complainant, with costs, the master must ascertain and report the amount of the purchase money which was due on . the other lots at the time of the registry of the mortgage.