6 Paige Ch. 35 | New York Court of Chancery | 1836
Assuming, for the present, that the vice chancellor was right in the principle upon which his decree in this case is based, the decree appealed from is erroneous in some of its provisions. The principle of charging different parcels of the mortgaged premises, which have been sold at different times subsequent to the mortgage, in the inverse order of their alienation, is not always confined to the original alienations by the mortgagor who is personally liable for the payment of the debt. The principle is equally applicable to several conveyances at different times, by a grantee of the whole or a part of the mortgaged premises, where he conveys with warranty. Thus, if the mortgage is a lien upon 200 acres of land, and the mortgagor conveys one hundred acres thereof to A., the one hundred acres which remains in the hands of the mortgagor is to be first charged with the payment of the debt, and, if that is not sufficient, the other 100 acres is next to be resorted to. But if A. has subsequently conveyed one half of his 100 acres to B. with warranty, the 50 acres remaining in the hands of A. is, in equity, first chargeable with the payment of the balance of the debt which cannot be raised by a sale of the 100 acres that still belong to the mortgagor or his subsequent grantee, before resort can be had to the 50 acres which A. has conveyed with warranty. And if A. conveys his remaining 50 acres to C., either with or without warranty, that portion of the premises is still liable for the balance of the mortgage debt, and must first be sold, before a resort can be had to the 50 acres previously conveyed with warranty to B. In the language of chancellor Kent, C. sits in the seat of his grantor, and must take the land with all its equitable burdens. (5 John. Ch. Rep. 241.)
By the decree which is appealed from in this case, the vice chancellor directs the lands of Patterson to be sold only in case the whole mortgage debt is not satisfied after applying two-thirds of the value of the lands released to Hammond by the mortgagees. But by referring to the exhibits, it will be found that Isaac Knapp was the owner of the whole 60 acres conveyed in March 1820, to John
The seventy acres conveyed to Isaac and Silas Knapp, in April, 1820, and released from the lien of the mortgage in June, 1825, was the last parcel of the mortgaged premises which was conveyed by the mortgagors. And it was worth, at the time it was so released, more than sufficient to satisfy the balance then due on the mortgage, at the lowest estimate of its value as fixed by any of the witnesses ; even if the complainant’s bill contains a correct statement of all the payments which had been made upon the mortgage previous to that time. If the complainants, therefore, are chargeable with notice of the equitable rights of the respective grantees, under the previous conveyances of the
The answer of the defendant Burdick contains a distinct allegation, that at the time of the execution of the releases of the 400 acres to Hammond, and of the 70 acres to Hillman, the complainants knew of the conveyance to Crandall, in 1816 ; and this allegation is sustained by the proof. At the time of the conveyance to Crandall he gave back to Peter Knapp a bond and mortgage upon the same premises, for $467. And from the recitals in the release to John Knapp, executed by the Guions in March, 1817, it appears that such bond and mortgage was actually assigned to them by Peter Knapp, as an additional security for the payment of their debt. This is the same mortgage which was afterwards assigned to Isaac and James D. Knapp, and foreclosed by them ; and through which the defendants Burdick and Hill-man have derived their title to the two small pieces of the mortgaged premises, now claimed by them respectively. How this bond and mortgage came to be relinquished by the Guions does not appear; but the recital is conclusive to show that they must have known that Peter Knapp had conveyed away this part of the mortgaged premises, previous to 1817. It was also notice to them of the rights of Humphrey and of Palmer, and of the grantees of the latter, as the 100 acres of Crandall is bounded on their lands.
The case is different in respect to the lands claimed by the defendants, Patterson, Skillie and Elijah Knapp. Neither of those defendants, or the grantees under whom they claim, had taken the precaution to have the deeds under which they claimed title recorded; so that it could not be ascertained by a search in the proper office, that Peter Knapp had conveyed the lands claimed by them, previous to the conveyance of the 70 acres to Isaac and Silas Knapp, in April, 1820. And there is no evidence whatever in this case, that the complainants had any notice, either actual or constructive, of their equitable rights, as prior purchasers, at the time the releases to Hammond and to Hillman were applied for and given.
The right Jo have the lands, which have been sold by the mortgagor, charged in the inverse order of their alienation^ is not strictly a legal but an equitable right, and is governed by those equitable principles upon which this court protects the rights of sureties, or those who are standing in the situation of sureties. And the conscience of the party who holds the incumbrance is not affected, unless he is informed
The decree of the vice chancellor must therefore be reversed, but without costs to either party on this appeal. And a decree must be entered declaring the lands of Burdick, Hillman, Humphrey, Raymond, Guthrie and Snow, discharged from the lien of the mortgage, and dismissing the bill, as to them, with costs. A reference must also be directed to a master residing in the county of Onondaga, to ascertain and report how much, if any thing, is due upon the bond and mortgage; and, upon the coming in and confirmation of the report, if it shall appear that there was