Boies v. Gardner — 24 N.Y. St. Rep. 940

Majority

p. 940

E. Willard Boies, Resp’t, v. Purple Gardner et al., and Sarah Benham, App’lts.

(Supreme Court, General Term, Third Department,

Filed July 6, 1889.)

Headnote

1. Mortgage—Purchase money—Priority—Burden of proof.

The action was in foreclosure. The plaintiff and defendant B., each held á mortgage given by defendant G., on the premises. The price of the premises was $1,800. G. borrowed $1,000 of defendant B. paid $900 to plaintiff, and gave him a mortgage for $800, and at the same time gave B. a mortgage for $1,000. The transactions took place at the same time, and the mortgages were recorded at the same time. Plaintiffs mortgage recited that it was given to secure payment of a portion of the purchase price; the one to B. did not so recite, Held, that the burden was upon B., to show that plaintiff, as vendor of the premises, and holder of a mortgage of equal date and record with her own, did either by act or omission so far waive the priority which his vendors had given him for the purchase money as to admit B.’s mortgage to an equality of lien with his own.

2. Same—Priority of lien.

Held, that inasmuch as B. advanced part of the purchase price, his equity is superior to that which the purchaser can give to third parties, and is entitled to whatever security the land can afford him before judgment liens, dower right or mortgages of third parties who have advanced nothing towards vesting the title in the grantee.

Appeal by the defendant, Sarah Benham, from a judgment entered in Schoharie county upon the report of a referee

The complaint was in foreclosure. The plaintiff and the defendant, Benham, each held a mortgage given by the de

p. 941

fendant, Gardner, on the 11th of March, 1884, upon premises which the plaintiff, on the same day, conveyed to Gardner. The price of the premises was §1,800, $100 of which Gardner had paid to the plaintiff. Gardner borrowed $1,000 of defendant, Benham, and paid $900 of it to plaintiff and gave plaintiff a mortgage for $800, and at the same time gave a mortgage to Benham for the $1,000. The transactions took place at the same time and place, and it was agreed that the two mortgages should be recorded at the same time, and they were both so recorded. The mortgage to the plaintiff recited that it was given to secure payment of a portion of the purchase-money; the mortgage to Benham did not so recite. The conversation of the parties, at the time of the execution of the mortgages, was given in evidence, the contention of the defendant, Benham, being that it was agreed that her mortgage should be of equal lien with that of the plaintiff. The referee finds that the mortgages were of equal date; that both were given for the purchase-money, and both, by agreement, recorded of equal date, but does not find that it was1 agreed that they should be of equal hen, and does find that the plaintiff never parted, or intended to part, with his equitable lien upon said premises for the purchase-money, and, thereupon, found that the plaintiff’s mortgage had the priority of lien. The defendant, Benham, appeals..

6r. L. Danforth, for app’lts; Hiller & Palmer, for resp’t.

J.— The burden rested upon the defendant, Benham, to show that the plaintiff, as vendor of the premises and the holder of a mortgage of equal date and record with her own, did, either by act or omission, so far waive the priority which his vendor’s lien gave him for the purchase-money as to admit the defendant’s mortgage to an equality of lien with his own.

The vendor’s lien for the purchase money is prior to any other lien which the vendee can give upon the land except by the vendor’s consent, expressly given, or implied from his acts or omissions. Dusenbury v. Hulbert, 59 N. Y., 541 ; Ellis v. Horrman, 90 id., 466; French v. Le Roy, 15 Week. Dig., 269.

The vendor’s equitable lien is waived by taking a mortgage. Fish v. Howland, 1 Paige, 20.

The referee has found that the plaintiff did not part with his equitable lien. Upon examination of the evidence we think the defendant did not quite make it appear that the plaintiff consented to admit her mortgage to any equality of lien with his own, and hence, it did not maintain the burden she assumed.

The case of French v. Le Roy, above cited, was fully as strong for the defendant as is the present, but the equitable lien prevailed. The defendant urges that because the referee has found that the mortgage to her was also

Concurrence

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given for the purchase money, that it is thus admitted to an equality with plaintiff’s mortgage in that respect, and because it stands equal in date and record, all the requisites of equality are shown. The money for which the mortgage was given to Benham was purchase money to the amount of $900, as between Benham and the purchaser in the sense that the purchaser could not, by agreement with third persons, give to them a lien upon the land prior to Benham’s. Benham’s equity was in like manner, and for like reasons, as superior to that which the purchaser can give to third persons as the plaintiff’s equity is superior to hers. The land comes from the plaintiff. Until the purchase price is secured to him his grantee has nothing to mortgage to Benham. That security given, then the grantee can mortgage to Benham, subject to plaintiff’s prior-lien. Benham, having advanced part of the purchase price, is equitably entitled to whatever security the land can afford him before the judgment liens, dower right or mortgages of third persons who have advanced nothing towards vesting the legal title to the land in the grantee can be allowed. This is the extent to which the money lent by Benham and paid to the plaintiff becomes purchase money. Jackson v. Austin, 15 Johns., 477 ; Cunningham v. Knight, 1 Barb., 399 ; Kittle v. Van Dyck, 1 Sandf. Ch., 76 .

The judgment is affirmed, with costs.

I concur in the result; but I think that plaintiff’s mortgage was a waiver of his equitable lien as vendor. Fish v. Howland, 1 Paige, 20. .

But it was not shown that he waived his right to priority over any other security.

Ingalls, J.. not acting.