106 N.Y. 230 | NY | 1887
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *233 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *235 The questions in this case are between the plaintiff, as an unpaid vendor of real estate, and the defendants, one as mortgagee and the other as assignee of the mortgage given by the vendee of the land. The controversy relates to the priority of their claims in those capacities. The court below decided in favor of the vendor's lien, and both defendants appeal.
It appeared that on and prior to the 7th of August, 1872, the title to and the possession of the premises in question were in the plaintiff, and he on that day conveyed them to his son, one Ira B. Seymour, by a deed, with warranty, for the price of $9,100, of which all but $5,000 was paid or satisfactorily arranged for; that, to enable Ira B. to raise that *236 sum, it was agreed between the plaintiff and Ira B. and the Equitable Life Insurance Society that Ira B. should execute to that company a first mortgage upon the premises, the amount of which should be paid by it directly to the plaintiff, and in reliance upon this arrangement he delivered the deed to Ira B. Seymour; that the company declined to make the loan, but, notwithstanding this, Ira B. caused the deed to be recorded, and on the twenty-third of September, without the knowledge or consent of the plaintiff, executed to the defendant McKinstry a mortgage of $5,000, which was recorded on the same day; at the same time, and before he advanced any of the consideration of the mortgage, McKinstry, as the court and jury find, "had knowledge that the plaintiff claimed to be entitled to $5,000 as part of the purchase-price of the premises therein described." The consideration for this mortgage was composed of a prior account of $2,400 due from Ira B. Seymour to McKinstry, two judgments of $300 against him, and $2,100.37 in a check payable to the order of Ira B., which he on the same day indorsed and gave to the plaintiff. On the twenty-eighth of September McKinstry sold the mortgage to the defendant Sabey for the sum of $5,000, and covenanted that there was unpaid and owing thereon the sum of $5,000.
The court finds that "McKinstry before he assigned said mortgage, and before he advanced any part of its consideration, had notice of the equity of plaintiff arising from the non-payment of said purchase-money, and the defendant Sabey has not shown that he, when he took the assignment, did not have notice of plaintiff's equitable rights, or of the facts from which they arise," and, as matter of law "(1), the plaintiff has an equitable lien upon the premises for the balance due him for the purchase-price of the same; (2) that such equitable lien is superior to the lien of the $5,000 mort-mortgage given to said McKinstry, and assigned by him to said Sabey; (3) that the said Sabey, as assignee, has no better rights than his assignor McKinstry; (4) that the plaintiff is entitled to a decree establishing his equitable lien and declaring *237 its priority, and that it is a first lien upon said premises, and directing a sale and foreclosure to enforce it." The judgment entered upon these findings has been affirmed by the General Term. We find no error in its conclusion.
So far as McKinstry is concerned it is entirely plain that he was not a bona fide incumbrancer, nor a purchaser for value beyond the sum of $2,100.27 (Ins. Co. v. Church,
There are many circumstances in the case which would have warranted this refusal, but it is enough that the plaintiff flatly contradicted the statement of the defendant Sabey in every respect and particular, saying not only "I never saw him at the time the conversation is alleged to have taken place," but also, "I never had any conversation with him on the subject in any manner or form; I should certainly have remembered it if I had; I never had any conversation with him until this suit was commenced." The general testimony creates no surprise that the trial court did not credit the defendant in face of this contradiction. But as it was a question clearly within its province, and not within that of this court, the case must stand on its conclusion, and we have only to see whether the burden of alleging and proving innocence and good faith in the transaction was upon Sabey.
In the first place it was sufficient to put Sabey on inquiry that the property was in the actual possession of the plaintiff (Cook v. Travis,
There is a like or greater difference between the present case and the others cited by the appellant. Fisk v. Potter (2 Keyes, 64), was an action to enforce an equitable lien for the purchase-money against a subsequent purchaser under a mortgage executed by the vendee while in possession, and failed for that and other reasons which have no place in the record before us.
To meet the question of pleading and proof the appellant relies upon an averment in the answer that "he took the assignment of the mortgage upon the faith of plaintiff's admission that the mortgage was a valid mortgage, accompanied by a denial of knowledge or information of the alleged facts upon which the allegations of fraud or conspiracy are based." So far as reliance is placed upon the admission, it is the finding that none was made, and as a pleading the allegations are far short of the affirmative allegation which the law requires of one who is bound to allege that he took his security without notice. Moreover, he must both allege and prove it.
It is a defense founded upon new matter. The plaintiff's lien, as an unpaid vendor, is good against the vendee and against the whole world, unless waived by the vendor or defeated by an alienation of the property by the vendee to a purchaser without notice. (Dusenbury v. Hulbert,
The reason for this rule may be the same ascribed to the doctrine which requires the holder of a note, shown to have been fraudulently obtained to prove under what circumstances and for what value he became the holder, viz.: That when there is fraud the presumption is that he who is guilty will part with the instrument for the purpose of enabling some third person to recover upon it, and such presumption operates against the holder and it devolves upon him to show affirmatively the facts essential to overcome that presumption and relieve himself from its effect. (First Nat. Bk. v. Green,
No error was committed therefore by the trial court in giving force to Sabey's omission to deny notice of plaintiff's rights and making it, in connection with other circumstances, a ground for postponing his mortgage to the plaintiff's lien for the unpaid purchase-money.
The other questions raised by the appellant relate to facts depending on evidence and have been found against him by the trial court and the General Term. They require no other *241 discussion. Upon those findings the judgment is without error and should be affirmed.
All concur, except RUGER, Ch. J., not sitting.
Judgment affirmed.
Addendum
On motion for reargument the following opinion was handed down: The defendant Sabey moves for a reargument. The concession in the pleadings was that on the 7th of August, 1872, the plaintiff was possessed in fee and the owner of the premises in question. The finding of the trial judge was, that on that day the plaintiff was the owner in fee and in possession of those premises, and his subsequent findings show a sale made to Ira B. Seymour and a delivery of the deed, not absolutely, but for the specific purpose of enabling him to raise the money by mortgage, to be executed to the insurance company for payment by them directly to the plaintiff. There is no finding or suggestion that the possession was changed, and no inference could be drawn that it was to be changed until after the inchoate arrangements were completed. An examination of the evidence justifies the finding of the trial judge in this respect. It was not excepted to, nor was he requested by the defendant to find that the possession, which was in the plaintiff August seventh, was at any time given to or taken by Ira B. Seymour.
The distinction between the Del Hoyo case (
It appeared in the case before us that McKinstry had from the beginning, and before the execution of the mortgage, full notice of the plaintiff's rights, and was so affected by it that in his hands the mortgage would be invalid as against the vendor's lien. As assignee Sabey is no better off than and is affected by all the equities which affect McKinstry. (Decker v. Boice,
No ground appears to warrant a reargument. The motion, therefore, should be denied.
All concur, except RUGER, Ch. J., not sitting.
Motion denied.