People ex rel. Mathews v. Woodruff

It must be held, I think, that as between Mrs. Romeyn and the relator, in this matter, the agreement of March 20, 2899, should be treated in equity as an equitable mortgage, and that, as against her, it would be enforced as such. It is true that such agreément itself does not purport to create a present lien upon the premises in question, but there is contained in it a distinct and positive agreement to execute a mortgage to secure the $2,000 therein mentioned, in the event that the foreclosure proceedings then threatening to devest her of such lands should for any reason not proceed to judgment. The intent is plain. By the instrument itself she gives to Mathews & Co. a lien upon the surplus moneys that she then expected to receive through the judgment in foreclosure, but if that expectation was not realized, on account of the action being discontinued, she agrees to give him a lien, by mortgage, upon the land itself. And such mortgage is to be given whenever Mathews & Co. shall demand it. I do not agree with the attorney general that such demand was a condition precedent to any liability on Mrs. Romeyn’s part under such agreement. Her obligation arose at once,—to give the mortgage whenever she was asked to,—and I discover nothing in such agreement that re

_ It is averred in the petition, and not disputed in the return, that the commissioners, when they took the mortgages from Bowers, liad actual notice of the instrument of March 20, 1899; and so, of course, they had notice of the agreement by which such equity is created. But there is no charge in such petition that Bowers had such notice when he took his conveyance from Mrs. Romeyn, and the burden is upon the one who claims the benefit of such outstanding equity to establish that the one who claims under the record title had notice of such equity. See Brown v. Volkening, 64 N. Y. 76 . But I am of the opinion that the record shows that Bowers, also, had notice of such agreement , and equity. The affidavits of Earle and of Davidson, used upon the hearing, show that in June and July, 1899, Bowers had purchased two other parcels of the land referred to in this agreement of March 20, 1899, and had mortgaged them to such commissioners, and that on the application of Davidson, who was then acting as Bowers’ attorney, as I understand the statement in his'affidavit, the firm of Mathews & Co. released such parcels from the lien created by such agreement, and such releases were put upon record. In the face of that fact, we must, I think, conclude that on August 30, 1900, when he took the conveyance of the remaining part of such premises, he still had notice of such agreement, and that, unless released, such parcel, also, would be subject to such lien. Such deed was taken to Bowers on the 30th, and the mortgages executed on the 31st. Evidently it was one transaction, and the commissioners took the title upon the understanding that Mathews’ debt had been paid, and that a release for this last parcel was not necessary. When one of the commissioners afterwards ascertained that the debt was not paid, and tried to get the release, he stated these facts to Mathews’ attorney. This appears from the affidavit of Earle, and is not contradicted. We must conclude then, that bqth Bowers and the commissioners had actual knowledge of this agreement creating this equitable lien, and that neither took the title to these premises as purchasers in good faith. The lien was, and still

These conclusions require that the determination of the commissioners of the lar "1 office be reversed, with $50 costs and disbursements. All concur.