154 N.Y.S. 673 | N.Y. Sup. Ct. | 1915
In May, 1910, one Bansch purchased certain premises in the city of Buffalo from the
When Speidel executed the mortgage to the defendant Haller, he fraudulently misrepresented that Haller’s mortgage was a first mortgage, and when Speidel conveyed to Zimmermann he fraudulently misrepresented to the grantee that there was no mortgage on the premises other than the $8,500 mortgage. Neither Haller nor Zimmermann examined the records, and neither discovered the truth until along in the year 1914.
Zimmermann sues Haller and the representative of the White estate to have the $8,500 mortgage reinstated for his benefit; that is, that he be subrogated to the White estate. Haller defends, claiming, in the main, that while he and Zimmermann were both unwise in not examining the records Zimmermann is not in a position to be subrogated.
The plaintiff is entitled to the equitable relief demanded in the complaint. He had not personally assumed or agreed to pay either incumbrance.
It is clear that the plaintiff paid the first mortgage under circumstances authorizing the inference of a mistake of fact. He is, therefore, entitled to the relief demanded, unless there are superior intervening equities. Barnes v. Mott, 64 N. Y. 401. There are no superior equities. The defendant Haller is in no way
This disposition of the case works exact justice between the parties and violates no rule of law. Subrogation is, in point of fact, simply a means by. which equity works out justice between man and man. Judge Peckham says, in Pease v. Egan, that “ it is a remedy which equity seizes upon in order to accomplish what is just and fair between the parties; ’ ’ and the courts incline rather to extend than to restrict the principle, and the doctrine has been steadily growing and expanding in importance.
It is clear that if the plaintiff had paid off the White mortgage with full knowledge of the defendant’s lien he would have been entitled to be subrogated to the rights of the mortgagee. Pom. Eq. Juris., § 798; Sheld. Subrogation, § 28; Clute v. Emmerich, 99 N. Y. 342. In other words, the plaintiff would have been entitled to an assignment of the mortgage; and, this being so, it cannot, in this case, be a matter of controlling importance that he did not know of the defendant’s mortgage. The court will relieve the plaintiff
I have not lost sight of the fact that defendant Haller believed he had purchased a first mortgage, and that he was not aware of the existence of the White mortgage until some time after it had been canceled of record. But such lack of knowledge is immaterial. Whatever defendant Haller believed on the subject, the fact is that he had purchased a second mortgage, which investigation of the records would have shown to him, and it would be inequitable to permit him to succeed to the rights of a first mortgagee, simply because the plaintiff had failed to investigate the facts before satisfying the first mortgage lien. This "is another instance where one of two parties must suffer when both are the victims of a rascal. I place the burden where I think it ought to be placed under the law; but under the circumstances I grant no costs.
Judgment accordingly.