2 Barb. Ch. 151 | New York Court of Chancery | 1847
The mortgage of February, 1837, to the executors of J. Hone, was entitled to a preference, so far as related to the 24 lots embraced therein, over the mortgage of the same date, to the master, which was afterwards assigned to G. W. Bruen, as the owner of the surplus money upon the safo,
This court has frequently had occasion to act upon the principle of equity, that where fnortgaged premises are subsequently sold to different- purchasers in parcels^ such parcels, upon a foreclosure of the mortgage, áre to be sold in the inverse order of their alienation,- according to the equitable rights of the different purchasers, as between themselves,- in reference to the payment of the mortgage which is a lien upon the equity of redemption in all the parcels; And the sáme principle of equity is applicable to subséquent incumbrances, upon different portions of the mortgaged premises, either by mortgage or judgment. (Hartley v. O'Flaherty, Lloyd & Goold's Rep. Temp. Plunkett, 208. Conrad v. Harrison, 3 Leigh's Rep. 532. New- York Life Insurance and Trust Company v. Milnor and others, 1 Barb. Ch. Rep. 353. Snyder v. Stafford and others, 11 Paige's Rep. 71.) It has also been decided by this court, that if the mortgagee, in such a case, with full notice Of the equitable rights of the subsequent purchasers or incumbrancers, as between themselves, releases a part of mortgaged premises which in equity is primarily liable for the payment of his debt, he will not be permitted to enforce the lien of his mortgage against other portions of the premises; without
In this case, N. W. Stuyvesant, the mortgagee, undoubtedly had notice of the conveyance from Hall, the mortgagor, to T. H. Smith; of the trust deed from Smith and G. W. Bruen to Anthon; and of the death of Smith and the devise of his estate, or interest, in the equity of redemption to G. W. Bruen. For these facts were all referred to in the bill filed by Stuyvesant in May, 1829, to foreclose his mortgage for the non-payment of the interest money. But if we should even presume that the executors of Stuyvesant had notice of the suit of Anthon and of Hone & Sons, to enforce the security of the trust deed, and of the decree for sale made in that suit, it would not be notice to them of the equity claimed by the appellants here; an equity to have 32 of the 56 lots purchased by Thome, under that decree, and mortgaged to the master, charged with the payment of the Stuyvesant mortgage, before resorting to the other 24 lots, purchased by Thome at the same time, and mortgaged to the executors of Hone. Previous to the giving of these two mortgages by Thorne, no equity existed, in behalf of any person, which would have rendered it improper or inequitable for the executors of Stuyvesant to release any part of the mortgaged premises from the lien of their mortgage; even if such executors had received actual notice of all the facts as they then existed. For, as the security of the trust deed, and of the decree obtained under the same, extended to the whole 56 lots embraced in the mortgage to Stuyvesant, a release of any of those lots from the last mentioned mortgage, at that time, might benefit the executors of Hone, but it could not possibly have diminished their security. Every thing that occurred previous to the sale and conveyance by the master, under the decree in that cause, must therefore be laid out of view in deciding the question whether the holders of the Stuyvesant mortgage had notice of any existing equity, in the executors of Hone, which should have prevented them from releasing a • part of the 56
There is not a particle of proof to charge the acting executor and executrix of Stuyvesant with actual notice of the rights of the executors of Hone, under the mortgage of February, 1837, at the time the release was executed, in September of that year. And if G. W. Bruen, or Thorne, wished to commit a fraud upon the executors of Hone, by obtaining a release of the portion of the premises which was primarily liable for the payment of the mortgage given by Hall, it is wholly improbable that they would inform the executor and executrix of Stuyvesant that Hone’s executors had a mortgage upon the 24 lots, which they were proceeding to foreclose; and which mortgage was first recorded, and was entitled to a priority in payment over a subsequent mortgage given by Thorne upon the whole 56 lots embraced in the Stuyvesant mortgage. On the contrary, the natural course of Bruen and Thorne would have been to inform the holders of the Stuyvesant mortgage that Thorne had purchased the whole of the 56 lots, under the decree founded upon the trust deed to Anthon, and to ask the holders of that mortgage to release 42 lots from the lien thereof; leaving their mortgage to remain as a security upon the remaining 14 lots, which, at that time, were of sufficient value to render the collection of the mortgage, and the interest thereon, perfectly safe.
The only remaining question to be considered is, whether the recording of the mortgage of February, 1837, from Thorne to Hone’s executors, or the filing of the notice of the pendency of the suit to foreclose that mortgage, was constructive notice, to the executors and executrix of Stuyvesant, of the equitable rights of the executors of Hone under their mortgage. In the case of Cheesebrough v. Millard, (1 John. Ch. Rep. 414,) Chancellor Kent held, in reference to an equity of this descrip-; tion arising under a judgment, that the docketing of a judg- j ment which became thereby a prior lien upon a part of the i mortgaged premises, was not constructive notice to the mortgagee of the whole premises, of the equitable rights of this judgment creditor, Under his subsequent judgment. In Will
The assistant vice chancellor is right in supposing that this court, in the case of Guion v. Knapp, (6 Paige’s Rep. 35,) did not intend to decide that the recording of a subsequent deed, » given by the mortgagor, was constructive notice to the mortgaged
In that case too, this court expressly decided that the right of subsequent purchasers, or incumbrancers, of different parts of the mortgaged premises, to have such parts charged in the inverse order of their alienation, was not a legal but an equitable right, and was governed by equitable principles. And that the conscience of the party, who held the incumbrance on the whole premises, was not affected unless he was informed of the existence of the facts upon which that equitable right depended ; or had sufficient, notice to put him upon inquiry. In the case of Jones v. Smith, (1 Hare's Ch. Rep. 55,) Sir James Wigram says, the cases in which constructive notice has been established resolve themselves into two classes: First, cases in which the party charged has had actual notice that the property in dispute was in fact charged, incumbered, or in some way affected; and the court has thereupon bound him with constructive notice- of facts and instruments, to a knowledge of which he would have been led by an inquiry after the charge, incumbrance, or other circumstances affecting the property, and respecting which he had actual notice. Secondly, cases in which the court is satisfied, by the evidence, that the party charged with notice has • designedly abstained from making inquiry, for the very purpose of avoiding notice.
It is true the executors of Hone, a few weeks before that time, had filed a bill against Thorne and G. W. Bruen, and the master, to whom the junior mortgage was given, to foreclose the prior mortgage upon the 24 lots; and a notice of the pendency of that suit was filed in the proper office, to make the filing constructive notice to a purchaser. But the executor and executrix of Stuyvesant were not made parties to that suit; nor is there any proof from which it can reasonably be inferred that they ever heard that such a suit had been brought. And the commencement of a suit in chancery is only constructive notice, of the pendency of such suit, as against persons who have acquired some title to, or some interest in, the property involved in the litigation, under the defendants, or some of them, pendente lite. ■
It is not necessary to inquire whether an executrix, who is a fejne covert, can release a portion of the mortgaged premises from the lien of a mortgage, given to the testator, without the concurrence of her husband, signified by his joining with "her in such release. For, the release of one of two executors is sufficient. And a satisfaction piece acknowledged by one of the executors, would be sufficient to discharge the whole mortgage, and to authorize the cancelment of the registry of such mortgage.
Nor was the objection well taken, that the complainant in this case was bound to file her bill against the present owners of the whole 56 lots; charging that the release was obtained for the purpose of defrauding the executors of Hone. If the executor and executrix of Stuyvesant acted in good faith, and without any intention of committing a fraud, it was sufficient for their assignee to file her bill against those who had subsisting interests in that portion of the mortgaged premises which bad
The decree of the assistant vice chancellor was not erroneous; and it must be affirmed with costs.