Sullivan v. Corn Exch. Bank

and deliver such a mortgage, but failed to execute and deliver the bond. The mortgage contained a recital that Monahan was indebted to plaintiff in the sum named, “secured to be paid by his certain bond or obligation, bearing even date herewith, conditioned for the payment of the said sum of $4,000.” The grant of the land described in the mortgage was stated to be “for the better securing the payment of the said sum of money mentioned in the condition of the said bond_ or obligation, with interest thereon, and also for and in consideration of one dollar.” The mortgage contained an express covenant to “pay the indebtedness as hereinbefore provided.” The mortgage was duly recorded January 27, 1911. Prior to the commencement of this action, which was on or about August 12, 1912, payment was demanded of the amount of such indebtedness, to wit, $4,000, with interest from October 31, 1910.

Upon default of payment, this action was brought for a foreclosure of said mortgage. As incidental relief, plaintiff demanded that “said mortgage be reformed by omitting therefrom the recital in (sic) the giving of said bond.” Defendants Corn Exchange Bank and W. & J~ Sloane, each a domestic corporation, separately answered, denying none of the allegations of the complaint,- but setting up-—-the Corn Exchange Bank, that on the 10th day of January, 1911, it recovered a judgment against said Monahan in an action in the Supreme Court for $8,157.36,. which judgment was docketed in the office of the clerk of Kings, county on January 11, 1911; and W. & J. Sloane that it also recovered a judgment against said Monahan on January 10, 1911, in aru action in the Supreme Court for $7,733.74, which judgment was also-docketed in said clerk’s office January 11, 1911. No attack is made upon the bona tides of said mortgage, nor do defendants contend that it was given in fraud of creditors. Plaintiff’s motion for judgment on the pleadings was granted, and the question here is solely one of priority of lien.

[ 1 ] The mortgage in question became and was from the date of its delivery a perfectly valid lien and incumbrance upon the premises therein described, as between the parties thereto. Even if it was given to secure payment of an antecedent debt, the same rule applies as between the parties and against all others who had at the time no equitable interest in the property, or who did not acquire rights as subsequent purchasers or incumbrancers for value. 1 Jones on Mortgages, § 459; Young v. Guy, 23 Hun, 1 , affirmed 87 N. Y. 457 ; Obermeyer & Liebmann v. Jung, 51 App. Div. 247 , 64 N. Y. Supp. 959 .

[2] The fact that no bond was actually given at the date of the execution and delivery of the mortgage does not impair it, since there was other sufficient consideration therefor. 1 Jones on Mortgages, § 353; Goodhue v. Berrien, 2 Sandf. Ch. 630 ; Baldwin v. Raplee, 4 Ben. 433 , Fed. Cas. No. 801.

[3] Its validity does not depend upon the form of the indebtedness, whether by note, bond, or otherwise, but upon the existence of the debt which it was given to secure. Goodhue v. Berrien, supra; Burger v. Hughes, 5 Hun, 180 , affirmed 63 N. Y. 629 . This case is distin

guishable from Bergen v. Urbahn, 83 N. Y. 51 , where a bond was in fact given, which was not produced upon the trial, nor was any explanation offered for the failure to produce the. samé.

[4] The mortgage itself contains an express covenant to pay the debt, and the fact that no date is specified when it shall become payable does not render it unenforceable. Either the right to enforce it accrues immediately (Purdy v. Philips, 11 N. Y. 406 ; Eaton v. Truesdail, 40 Mich. 1 ; Rhoads v. Reed, 89 Pa. 436 ), or it may be enforced after the lapse of a reasonable time and upon demand.

[5] The complaint alleges demand, and if the rule of reasonable time does apply, it is for defendant to show that a lapse of nearly two years after delivery, without payment of either interest on the debt or taxes or assessments upon the property, is-'not such reasonable time.

[6, 7] We think, therefore, that without reformation the mortgage was a valid and enforceable legal obligation on plaintiff’s land, and as against defendants, judgment creditors of Monahan, a lien prior to the lien of such judgments, even although the mortgage was not recorded until after the judgments were docketed. The cases relied upon by appellants (Ogden v. Ogden, 180 Ill. 543 , 54 N. E. 750 , Whiting Paper Co. v. Busse, 95 Ill. App. 288 , Bramhall v. Flood, 41 Conn. 68 , and Porter v. Smith, 13 Vt. 492 ) are clearly distinguishable.

In the Ogden Case it appeared that no actual indebtedness existed at the time of the delivery of the mortgage, nor until the delivery of the note recited therein, which was some six years subsequent to the date of the execution of the mortgage, and in the meantime.the right of subsequent incumbrancers had intervened. In the case of the Whiting Paper Co., supra, the original security had been surrendered, the bona fides of the debt was questioned, and the rights of subsequent incumbrancers had also intervened. In Porter v. Smith, supra, where plaintiff held two promissory notes of defendant, and it was agreed that two new notes should be given, secured by a mortgage, and the mortgage was drawn correctly describing said notes,, but, by mistake, the new notes were retained by the debtor and the old notes returned to the creditor, the mortgagee, all that was held was that the mortgagee could not proceed at law in ejectment as he might otherwise have done, but must proceed in equity to enforce his claim. In Bramhall v. Flood, supra, the decision rested upon the peculiar provisions of the recording act of that state, which would seem to put judgment creditors upon a similar footing with purchasers and incumbrancers for value. See Pettibone v. Griswold, 4 Conn. 158 , 10 Am. Dec. 106 .

Our statute only provides that every conveyance (and for the purposes of the recording act a mortgage is within the definition of a conveyance) not recorded as therein required “is void as against any subsequent purchaser in good faith and for a valuable consideration, from the same vendor, his heirs or devisees, of the same real property or any portion thereof, whose conveyance is first duly recorded.” Real Property Law (Consolidated Laws, c. 50 [Laws of 1909, c. 52]) § 291. A judgment creditor is not such a purchaser, and an unrecorded conveyance has a preference over a judgment, unless there is a superior equity in favor of the holder of the latter. Thomas v. Kelsey, 30 Barb. 268 ;