Hyperlawhypertext legal database Brinsmade v. Hurst 10 N.Y. Super. Ct. 206

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Brinsmade v. Hurst

10 N.Y. Super. Ct. 206 3 Duer 206 Court IX. The judgment at special term should be affirmed with costs. Decision date 1854-02-25 English

Contents

Majority

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James B. Brinsmade, Respondent, v. Lewis Hurst, Appellant.

Headnote

Under a judgment of foreclosure and sale upon a mortgage given by J. M. to J. B. the mortgaged premises were sold at public auction, and by the terms and conditions of the sale were declared to be “subject to a prior mortgage of $3000 with interest from the 1st of May, 1851, also a mortgage of $'700 and interest from 10th of August, 1850.” The defendant was the real party in interest, conducted the proceedings unto the terms of sale, and purchased the equity of redemption for $100.
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Held, that, by the fair interpretation of the terms of sale, the title of the purchaser was to be subject to the mortgage of §700 (for the foreclosure of which this action was brought) as a prior incumbrance.
Held, that the defendant, as such purchaser, and by his acts and declarations proved, was estopped from denying the validity of that mortgage and its right to a prior satisfaction.
Held, that the omission of a reference to that mortgage, in the sheriff’s deed to the defendant, was immaterial, and created no obstacle to the relief sought by the plaintiff.
To permit a person, who has purchased real estate, declared at .the sale to be subject to an incumbrance of a certain amount, subsequently to dispute, for his own benefit, the validity of the incumbrance, would be, in all cases, to sanction a fraud.
To admit such a defence, when the sale is made under a mortgage, would operate as a fraud upon the mortgagor or mortgagee, since the price of the property is certain to be diminished by the sum declared to be due upon the prior incumbrance.
(Before Dube, Campbell, and Slosson, J.J.)
Feb. 8, 25, 1854.
Appeal from a judgment at Special Term.
The complaint charged that on or about the 10th of August, 1850, William McGarvey of the city of New York executed and delivered to John Curry of Troy, in the county of Rensselaer, N. Y., a bond and mortgage to secure the payment in one year of $700 with interest; that the mortgage covered certain premises particularly described in the Seventh Ward of the city of New York, and was duly recorded on the day it bore date, and together with the bond had been duly assigned to the plaintiff for a valuable consideration; that the whole sum secured to be paid thereby, together with interest, was due and unpaid, and that there had been no proceeding at law to recover the same. The complaint further stated, upon information and belief, that McGarvey and his wife had executed and delivered to John Brady of Middletown, Connecticut, a mortgage upon the same premises dated 25th May, 1850, and conditioned to be void on the payment of $400 with interest on the 25th May, 1851, and that the same was properly recorded on the 12th of August, 1850. It was then averred that if the mortgage to Brady was in fact executed before the execution and delivery, or the recording of the mortgage to Curry, yet that he (Curry) had no knowledge or notice of the facts, but took his own mortgage and caused the same to be
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recorded in good faith and for a valuable consideration. The complaint further showed that in the month of February, 1851, Brady commenced an action in the Supreme Court for the foreclosure of his mortgage, to which McGarvey and his wife and some other persons, but neither Curry nor the plaintiff, were made parties defendant; that, in this action, the usual decreé of foreclosure and sale was made; and that under this decree the sheriff of the city of Hew York duly advertised the mortgaged premises for sale at public auction on the 2d of December, 1851, at the Merchants’ Exchange in the said city; that the said mortgaged premises were sold by the said sheriff, under and pursuant to such decree and notice, and at the time and place in said notice specified therefor; that the terms and conditions upon and according to which the said sale was made were that the said mortgaged premises were subject, and were sold subject, to a certain prior mortgage thereupon, for the sum of three thousand dollars, together with interest from the first day of May, A. D. 1850; and also to a certain other mortgage thereupon, for the sum of seven hundred dollars, with interest thereon from the tenth day of August, A. D. 1850; that the said premises were sold subject to the said two mortgages last mentioned, and that the same were struck off to, and purchased by, the defendant, Lewis Hurst, he being the highest bidder therefor; that the mortgage for $3000, above mentioned, was given by McGarvey and his wife to Isaac T. Ludlam, that it was dated on the 1st of May, 1850, and recorded on the 7th of the same month, and was conditioned to be void on the payment of $3000 with interest half yearly, on the 1st of May, 1855; and that the mortgage for $700, above mentioned, is that which was- given by McGarvey to Curry, and which was held by plaintiff as assignee. The complaint averred that the sheriff had executed and delivered a deed of the mortgaged premises to the defendant, who had since been, and then was, in the possession thereof,, and after other averments, which it is not deemed necessary to notice, prayed for the usual judgment of foreclosure and sale.
The defendant, in his answer, denied that the mortgage to Curry was given to him or assigned by him to the plaintiff in good faith and for a valuable consideration, and- insisted that
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the same were fraudulent and void as made with an intent to defeat the creditors of McGarvey. He denied that the premises were subject to the mortgage to Curry as a prior incumbrance or that they were rendered so subject by the terms of the sale, and he denied that he had ever agreed to pay to the plaintiff the amount due upon the mortgage assigned, as was averred in the complaint.
Upon these pleadings the cause was tried before Mr. Justice Campbell at a Special Term in June, 1853.
Upon the trial the counsel for the plaintiff, after reading in evidence the bond and mortgage to Curry, which it was admitted were correctly set forth in the complaint, read in evidence the following deposition of Curry.
City and County of New YorJc, ss. :
Deposition of John Curry, a witness for the plaintiff in this action, taken by consent, upon the tenth day of May, A.D. 1853, at the city of Hew York. The said witness being duly sworn, and being examined by Mr. Birdseye, of counsel for the plaintiff (Mr. Peabody, attending as counsel for the defendant), doth depose and say :—
My name is John Curry; I reside in Greenbush, in the county of Rensselaer; I am a clergyman; have been so for more than twenty years; I am acquainted with William McGarvey, lately of the city of Hew York, and now of California; have known him more than ten years ; he gave me a bond and mortgage in 1850 for $700 ; it should have been for $800 ; the consideration of the bond and mortgage was this; first, I gave him three hundred dollars by a draft on one of the banks in Hew York; and secondly, I went collateral security with him to Rev. Mr. John Brady, of Hartford, Conn., for $500, which was advanced by Mr. Brady to Mr. McGarvey, as I understood from them; I consider myself liable to pay the debt to Mr. Brady of $500 whenever he pushes me for it; the whole of the $800 was due to me on the tenth day of August, 1850; and I owed $500 of it to Rev. Mr. Brady.
At the time of the date of the mortgage to me I did not know that Rev. John Brady, jr., of Middletown, Conn., had any mortgage on these premises; I knew nothing about any
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mortgage except one for $3,000 or $3,500, which I suppose was the first one on the premises.'
The mortgage was received by me in good faith, and for a sum less by one hundred dollars than what he justly owed me, as I have explained above.
Prior to the date of the mortgage it had, of course, been a part of the understanding that he should secure me. (This answer is taken subject to objection.) The note I considered a security at the time; that note was cancelled by the giving of the bond and mortgage, and I subsequently gave it up to him.
The bond and mortgage were delivered to me in Hew York, I think; I then resided in Troy, H. Y.
Cross-examined by G. A. Peabody, for defendant: McGarvey had the $300 some time in the month of May, 1850, what time I don’t recollect; I don’t exactly know the date when I became security for him to Mr. Brady, but it was the second time he applied to me for money, when I told him I had not the money, and I wrote to Mr. Brady, saying, I was security with McGarvey for what money he might advance ; whether it was $500 I wrote I don’t know, but it was for what he would advance him. And I told him then if he did not get it of him to go to apply to his uncle, John Brady, in Hartford ; I took the mortgage for $700 instead of $800, the amount he owed me, because I left it with him to make the mortgage, and he made it for $700 ; I understood from Mrs. McGarvey that it was a mistake of the lawyer in drawing it out; I first discovered this mistake at the time I got the mortgage, I suppose; I don’t know the date ; I don’t know when I got it; it was some time in the year 1850.
It was after it was recorded that I got it, because he got all done himself of that; he got the recording all done himself; I can’t say how short or how long after the date of the mortgage ; I cannot tell how soon after the mortgage was made I knew of its being made; I did not know of it until I got the mortgage; I gave up the $800, or note I have spoken of, to Mr. McGarvey; I think some time last fall; the fall of 1852; until that time I retained it; in fact, I did not know, I forgot that I had it at all; the $500 to Mr. Brady I have not yet paid ; it stands as it did originally. The Mr. John Brady to whom I
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addressed the letter for McGarvey respecting the $500 >vas Mr. John Brady, of Middletown, a Catholic priest of that place. The Mr. John Brady, of whom as I understood McGarvey obtained the $500, is Mr. John Brady, of Hartford, uncle of Mr. John Brady, jr., to whom my letter was addressed ; he did not get any money from Mr. John Brady, jr., on the strength of my letter; it was from the other Mr. John Brady that he got the money; I don’t know how soon after he got this money I knew of his having gotten it; it was close on the date of the note, however; either McGarvey, or his wife, or both, first told me of it; I suppose that Mr. Brady holds my letter, and that is the only security he has from me ; I considered the note as dead after taking the bond and mortgage, aud this is what I meant when I said it was cancelled. Both the Messrs. Brady and myself are Catholic priests, all of us ; I think I received both of them, the bond and the mortgage, at the same time, and I think it was in the city of New York where I received them; I left the making and execution of them entirely to McGarvey ; I did not authorize any one to attend it for me.
On a farther direct examination the witness says: I don’t know that the letter addressed to Mr. Brady, of Middletown, contained anything about Mr. Brady, of Hartford; that was sent by word of mouth, I think; what I sent by word of mouth was, that if Mr. Brady, of Middletown, could not let McGarvey have the money, then he should go to Mr. Brady, of Hartford, and give him the letter, to hold it as security, and that I would be security to him for what he should advance; I meant .that whichever of them advanced the money, and held the letter, to that man I was security. I don’t know that I told him by word of mouth that I would be security to Mr. Brady, of Hartford, though I probably may have told him so; I cannot recollect that I did; I can’t recollect the precise words of it; I saw Mr. Brady, of Hartford, about a fortnight ago ; I told him that McGarvey was in California, and likely to do well, and he did not press me for the payment of the debt; we have always expected that McGarvey would be able to pay us both, and consequently he did not distress me for the money. The note was not given up when the mortgage was delivered to me first, because the note was not about me; I think 1 received the
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bond and mortgage in Hew York, and the note was in Troy; and secondly, I did not think anything about giving up the note; at one time I had forgotten that I had got a note; at first, after a long interval, I forgot I had had the note ; and then whether it was given up or not. The note I got from McGarvey was for $800; I never had any other note from him; it was given for the $300 I sent him, and the $500 I went security for to Mr. Brady, as I have explained ; this note was taken close by the time of my going security; within a week or ten days, I think; I have no recollection, but it is probable that it was within a week or ten days after the money was advanced I knew of its being advanced on that security.
Ee-cross-examined : I gave up that bond and mortgage to Mrs. McGarvey when she complained of her circumstances, and that if she had the means she could start the millinery business; I gave it up to her to enable her to get money to start the millinery business; I have never received any consideration for it; I intended the delivery to her as for her own and Mr. McGarvey’s benefit, for the good of the family; I don’t know that I intended it for his particular benefit, but for that of his and her family; I have never sold that bond and mortgage to any person ; I still desire that McGarvey and his family should have any benefit that may be derived from it. (The last answer taken subj ect to obj ection by plaintiff.) I heard some time ago from McGarvey that he was doing pretty fairly; I understood Mrs. and Mr. McGarvey sold the mortgage to Mr, Brinsmade ; I gave an acquittal of it, I think, to Mr. Brinsmade or Mr. McGarvey; I don’t know which; I think I made it out in his name; Mr. Brinsmade, the plaintiff’s name. I hope still that McGarvey will be able to and will pay me; if he is ever able to he probably will pay all of us; I believe that he is honest; I have every reason to think so ; of course I consider him bound in conscience to pay me that $800, if he is ever able ; and I have confidence in him that lie will, if he is ever able; I consider the $800 a debt due from him to me, but if he pays Mr. Brady, of course, that will answer my purpose just as well, so far as the $500 are concerned, and the $300 he owes me anyway; and I have the same expectation as to the $300 that I have to the $500, that he will pay me if he is ever able;
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I have mentioned this once or twice before. (All since the last objection is taken subject to objection by the plaintiff.) I am not positive that I was ever introduced to Hr. Brinsmade until to-day; I may have seen him before, but I never had any intercourse with him until, to-day; I knew him by sight when Hr. HcGarvey lived in his house ; this was a couple of years ago, I think.
On a further direct examination, he says : I told Hrs. HcGarvey that I would give up the mortgage to her for her to try to sell it, or raise money on it; I meant that she herself should try to sell the mortgage, not I; of course, if she got any one to buy the mortgage, I was to give an acquittal to the one that bought it; I mean by acquittal, that if she got any one to buy the mortgage, 1 was to give up to that person all my right and title to the mortgage. Did you intend that Hrs. HcGarvey should sell the mortgage, and make use of the money obtained upon the sale of it for her benefit, as a loan from you in starting the millinery business ? (Objected to, and answered subject to objection.)
A. I intended she should try to get a purchaser and sell the mortgage, and if she found any one to give her the money for it, I was to give up to that person all the right and title I had to the bond and mortgage; she was to have the use of the money to start the millinery business; and I told her if she was ever able to pay me to do so, and, if not, then to let it go by the board, or words tantamount to that.
Q. Is this the only way in which you ever gave up the mortgage to her? (Objected to.)
A. She got the purchaser, and I gave up all my right and title to him; that purchaser was Hr. Brinsmade, the plaintiff ; and I gave him an acquittal, or transfer of the mortgage.
Q. How was the giving of the mortgage to be of benefit to her?
A. Of course by getting the money and making use of it. The transfer to the plaintiff was a printed blank filled up with writing, and signed by me.
Q. When you say you never sold the mortgage to any person, what do you mean? (Objected to.)
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A. I mean that I never sold it individually, or except through her agency.
Q. 'When you say you desire that McGarvey and his family should have any benefit that may be derived from the mortgage, what do you mean ? do you mean that he or they have any interest in the termination of this suit? (Objected to.)
A. They have no interest in the termination of this suit that I know of; I mean that they should have the whole amount of that mortgage; if they have had it once, I don’t wish they should have it again ; the whole thing may be summed up in three words, I gave Mrs. McGarvey the bond and mortgage, and told her to sell them and use the money, and if she could ever pay me to do so ; if not, to let it go.
John Curry.
Sworn before me, this 12th day of May, 1853.
H. S. McCall, Commissioner of Deeds.
Counsel for plaintiff then read the assignment by Curry to plaintiff, of the mortgage made by McGarvey, which is in the usual form, and bears date on the eighth day of April, 1851, and was acknowledged in Bensselaer county, on the 14th day of April, 1851, and was recorded in the office of the Register of the City and County of Hew York, on the 20th day of September, 1851, in Liber of Mortgages, 323, page 8.
Plaintiff then called, as a witness, Elliott T. Farr, who, being sworn, testified, that he lived in the city of Hew York.
(The following was objected to, and taken subject to objection, and exception taken by defendant.)
That in December, 1852, he called on defendant before the sale on the Brady mortgage; he thought it was on the day before, or on the morning of the day of sale; asked Hurst the terms or conditions of the sale. He said Brinsmade need not trouble himself about it nor attend the sale; I asked him if the property would be sold subject to the mortgage held by Brinsmade; he said it would be ; I called on behalf of Brinsmade ; I told him so.
Being cross-examined he said : I spoke of the mortgage assigned to Brinsmade-; I don’t know that Hurst knew anything
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about the mortgage to Brinsmade ; I think I described it as a mortgage Mr. Brinsmade had an interest in ; I don’t recollect in what language this was referred to; I knew the name of Curry, the mortgagee ; perhaps I might have described it as a mortgage from McGarvey to Curry, but I don’t recollect it; at any rate I supposed Hurst knew from the- answer he made me; I have no knowledge, further than from this conversation, that Hurst knew of Brinsmade having an interest in it; nothing more passed than I have told my object in calling upon Hurst was to ascertain the conditions of the sale. .
William H. Stodgill was then called by plaintiff, who, being sworn, said: I officiated as agent for the sheriff at the sale under the foreclosure of the mortgage to Brady ; the sheriff was also present at the sale. (This evidence objected to, and admitted by the judge, subject to objection, and exception taken by defendant.) The terms of sale were drawn by me; here are the terms. (Objected to by defendant, admitted by judge, and exception taken by defendant.)
The terms and conditions of the sale were then read, the 7th paragraph of which is alone material, and is as follows:
7. Subject to a prior mortgage for $3,000, with interest, from May 1st, 1851; also a mortgage for $700 and $370 interest from 10th August, 1850.
Witness then said that the clause stating that the sale was subject to a prior mortgage for $3,000, and also a mortgage for $700, &c.,- was inserted by direction of Hurst, the defendant in this suit, who was the attorney for the plaintiff in that foreclosure suit; I saw the plaintiff in this suit at the sale ; there was only one bid on the premises; the price bid was $100 ; it was bid by Hurst, the defendant herein ; the sale was on a decree of foreclosure of the Brady mortgage. These terms of sale were proclaimed and read at the sale by the auctioneer; Brinsmade was present at the sale.
E. L. Brinsmade was then called for plaintiff, and being sworn, testified : I am a son of the plaintiff; am an auctioneer; in December, 1852, my office was at No. 8 Wall street, with Henry H. Leeds; defendant’s office was at No. 6 or 8 Wall street; he called on me in December, 1851, or January, 1852 ; it was after the sale. (This evidence was objected to by defend
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ant and admitted by judge, subject to objection, and exception taken by defendant.) He called on me in reference to the mortgage held by the plaintiff; he said he had purchased the house in Cherry street, on which plaintiff had mortgage for $700; he said his object in calling was to see if plaintiff would be willing to have his mortgage renewed; I told him he was not, that he wanted his money: he then asked if I thought he would wait till the latter part of the next month ; he said that if he would, he would then have the money, and would settle the mortgage ; 1 told him I did not know, he had better see Mr. Brinsmade.
I didn’t think he would wait; this is all I remember; I. don’t think I saw defendant again on this subject; I knew before this conversation with Hurst of the sale on the mortgage.
Being cross-examined, he said: I did not attend the sale ; I saw the sale advertised; I don’t recollect the language Hurst used, but I have stated the substance; I understood that he wished to give a new mortgage, to renew the mortgage held by Brinsmade.
It was here admitted that this suit was commenced June, 1852.
Plaintiff here rested. Counsel for the defendant then moved that the complaint be dismissed, which motion was denied, and counsel for defence excepted.
Defendant then offered and read in evidence a list of judgments recovered against the mortgagor, William McGarvey; and also read in evidence the deed, executed by the sheriff to the defendant, which was in the usual form.
The judge decided that the plaintiff was entitled to the relief demanded in his complaint, upon the ground that the defendant having bought, according to the terms of sale subject to the mortgage to Curry, held by the plaintiff, was estopped to deny it validity or priority over that under which the sale was had.
Judgment for the plaintiff, with costs, was accordingly given, fixing the- amount due on the mortgage, at $839 39, and the costs at $107 13.
The cause was now heard upon the appeal from this judgment.
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C. A. Peabody, for the defendant, appellant, made and argued the following points.
1. The terms of the Sheriff’s sale, under the decree of foreclosure of Brady’s mortgage, determine nothing concerning the rights of plaintiff by virtue of his mortgage. That was a sale by the Sheriff, pursuant to a decree of the court, and transferred to the purchaser only the rights of the parties to that suit, whatever they were, and did not alter or in any way affect the rights of others, not parties thereto, having liens on the premises. (Vanderkemp v. Shelton, 11 Paige, 28.) 1. Plaintiff was not a party to that suit. And whether his mortgage was prior or subsequent to that to Brady, it remained after the sale as it was before, unaltered by it, whatever the terms of the sale may have been. 2. The defendant herein, by his purchase under the decree, acquired the rights of the holder of that mortgage, whatever they were: and whether prior or subject to the mortgage held by plaintiff, discharged of all the rights and equity of redemption of the defendants in that suit, their rights having been foreclosed therein. (Ya/nderkemp v. Shelton, 11 Paige, 28.) 3. The mere fact, that by the terms of the Sheriff’s sale, the premises were said to be subject to the mortgage held by plaintiff, did not, and could not, change the position of that lien, and make it prior, if it would otherwise be subsequent: could not make the Brady mortgage void, as against Curry’s, if it was not so previously for other reasons. 4. To hold that it'did this, would be to hold that the Sheriff had power to, and did charge the property with the payment of plaintiff’s mortgage, in a manner different from that in which it was charged by the mortgagor; a proposition which will scarcely find an advocate. 5. The object of that notice was to inform purchasers that such a lien existed, or was claimed, and for this purpose it was necessary. The priority or validity of that lien was not determined or even asserted by it; but purchasers thus notified were put upon inquiry, and could ascertain for themselves whether it were valid or not, and if valid, whether prior to that of defendant. It was not stated to be prior in the terms of sale, but the purchaser was to see and examine for himself. Thus forewarned, “ cmeat ernptor.”
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If it was prior, its existence was of importance to the purchaser at that sale, and if subsequent, it was important, for the holder of it could redeem the premises from the purchaser. In either case its existence was of importance to a purchaser at that sale. This being the case, the question of priority is to be determined by a reference to the relative position of the mortgages anterior to the foreclosure of that to Brady. The cases which establish the doctrine, that a party taking property, expressly subject to the payment of a prior incumbrance, cannot repudiate or deny the validity of that incumbrance, all proceed on the idea that the parties so contract—that the grantor in such a case so granted—that he conveyed the premises in that state or condition, subject to that charge—'that grantee took them only in that condition; in short, that he conveyed only the equity of redemption—that he conveyéd only the estate or property, which he had therein after deducting therefrom the payment of the prior incumbrance, together with the right, by paying that, to relieve the property from it, and having paid it, to hold the premises discharged of that lien; that he waived his right to defend, and put funds into the hands of the purchaser, with which to pay off the incumbrance. This case would be' analogous, if the mortgage to Brady had been later in date than that to Curry, and expressly subject to it, neither of which is pretended. (Morris v. Floyd, 5 Barbour, 130, 138.) Cases are here cited and reviewed. (Green v. Kemp, 13 Mass. 575 .) Here the Court called it a mortgage of the equity of redemption. (Jumel v. Jumel, 7 Paige, 591; Wells v. Chapman, 13 Barbour, 564; Eagle Fire Ins. Co. v. Lent, 6 Paige, 638.)
H. The mortgage to Brady under which defendant holds, bears date the 25th May, 1850. The mortgage to Curry held by plaintiff, bears date the 10th August, 1850. The Brady mortgage was recorded August 12th, 1850. The one to Curry held by plaintiff, was recorded Aug. 10th, 1850. 1. The Brady mortgage is therefore prior to that of Curry in its creation,, and must remain so, unless the priority was lost under the operation of the recording statute. 2. The mortgage to Brady, having been executed and delivered first, could only lose its priority in favor of a “ subsequent purchaser in good faith
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and for a valuable consideration,” whose deed should be first recorded. (1 Rev. Stat. p. 746, sec. 1, 3d ed.) To be such a purchaser Gurry must have parted with value, or relinquished security for a pre-existing debt, before he had notice of the prior mortgage. Taking a mortgage for a prior debt, is not sufficient. (Dickinson v. Tillinghast, 4 Paige, 215 ; Wyckoff v. Remsen, 11 Paige, 564.) 3. Curry was not a subsequent purchaser in good faith, for a valuable consideration, within the meaning of the statute. (1 Rev. Stat. 746, § 1, 3d ed.) His testimony shows, that he parted with no value on the faith of it, but at best received it as security for a pre-existing debt, and a liability as surety for McGarvey; parting with no security for it. Such a mortgage is not within the statute. To be such a purchaser, he must have parted with value or relinquished security, for a pre-existing debt, before he had notice of the prior equity of Brady’s mortgage. (Dickinson v. Till inghast, 4 Paige, 215; Wyckoff v. Remsen, 11 Paige, 564; Jackson v. Campbell, 19 Johns. Rep. 282 , 283; Churchill v. Green, 1 Ch. Cases, 35, 36.) 4. Moreover, plaintiff is affected with notice of the prior equity of Brady’s mortgage. 1. Curry had actual notice. (See Curry’s deposition.) He knew of a prior incumbrance for $3,500 which is the amount of Ludlam’s and Brady’s together, and which is all there was, admitting the priority of Brady’s mortgage; he thought the amount was in one mortgage instead of two, but that makes no difference. 2. Brady’s mortgage was recorded prior to the purchase by plaintiff, and plaintiff therefore had notice of it from the record when he bought. The assignment by Curry to him bears date 8th April, 1851, and is recorded 20th September, 1851. The mortgage to Brady was recorded 12th Aug., 1850, bears date 25th May, 1850. 3. The mortgage to Brady, under which defendant holds, was recorded 12th Aug., 1850, prior to the date of plaintiff’s purchase, and long before the registration of his title. Plaintiff took his mortgage with full notice by the record of the prior mortgage to Brady. (Fort v. Burch, 5 Denio, 187 ; Jackson v. Post, 15 Wend. 588 ; Van Rensselaer v. Clark, 17 Wend. 25 .) 4. Defendant by his purchase acquired the rights of at least one judgment creditor, whose lien was confessedly prior to that of plaintiff.
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For instance, Wintersteins, whose judgment was docketed June 24,1850, anterior to the mortgage of plaintiff, though after the execution of Brady’s. ( Vanderkemp v. Shelton, 11 Paige, 28.) To enable plaintiff to succeed, the rights under this judgment unquestionably prior to plaintiff’s mortgage must be overridden.
HI. The proof shows plaintiff’s mortgage to have been executed and placed on record by McGarvey in failing circumstances, without the knowledge of Curry, under circumstances which impeach its validity, as to creditors, and as to them, it should be declared fraudulent and void.
IY. But waiving the fraud in its creation, it was only capable of being enforced to the extent of $300; to this extent it was given for a prior debt. 1. As to the other $400 it was only given as security against loss by reason of Curry’s having become surety for McGarvey to John Brady; but Curry’s testimony fails to show that any liablity was incurred by him as surety, and shows at most only a fancied assumption of one. As to that part, the mortgage to Curry was absolutely void. ■ 2. But if there was a liability incurred by Curry, his surety-ship had not resulted in loss at the time, and has not yet, and this part of it, therefore, cannot now be collected.
Y. Brinsmade takes it subject to all the equities to which it was liable in the hands of Curry, and can have no greater or better rights under it, than he had. (Ellis v. Messervie, 11 Paige, 467.)
YI. The complaint should be dismissed because of the nonjoinder of defendant’s wife, and also all the judgment creditors, subsequent to the mortgage to Curry, as party defendants. They are necessary parties, in order to a complete determinación and settlement of the questions involved in this action. (Amended Code—Voorhies Ed.—sec. 188; Denton v. Nanny, 8 Barb. S. C. R. 618.)
C. P. Kirkland, for the plaintiff, contended that the judgment ought to be affirmed upon the following grounds.
I. The proof establishes that the mortgage to Curry was founded on valuable consideration, and was given to secure a just and bond fide demand. It was given pursuant to. the
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agreement made contemporaneously with the loan; and so far as is necessary for the respondent’s protection is to be deemed as then given.
II. The delivery of this mortgage was perfect and consummated when it was left for record: and at that time Curry had no knowledge or notice whatever of the Brady mortgage. (Rathbun v. Rathbun, 6 Barb. 98 ; Elsey v. Metcalf, 1 Den. 323 ; McCrea v. Dunlap, 1 John. Ca. 114; Church v. Gilman, 15 Wend. 656 ; Jackson v. Phipp, 12 J. R. 421.)
III. Under these circumstances, the Curry mortgage had preference, under the recording acts, to the Brady mortgage. (2 R. S. 40, §§ 1, 44, 3d ed.; 1 R. S. 756, § 1, 762, § 38, 1st ed.)
IY. But irrespective of the preference by being first recorded, the Curry mortgage must be paid by the appellant or be held to be a prior and subsisting lien on the premises, because the appellant purchased, expressly subject to it, and in this mode for all practical purposes discharged that amount of the purchase price. He, the appellant, conducted the whole proceedings on the Brady foreclosure; was the party really in interest; admitted Curry’s priority by not making him a party; in his own hand inserted in the conditions of sale that the purchase was subject to this mortgage; and bought expressly subject to this mortgage. All this is substantially admitted in the answer, and whatever is not thus admitted is proved. (Morris v. Floyd, 5 Barb. 130 ,138 ; Green v. Kemp, 13 Mass. 515 ; Dumel v. Dumel, 7 Paige, 591; Eagle Fire Co. v. Lent, 6 Paige, 635; Welles v. Chapman, 13 Barb. 561 , 564.)
Y. The appellant before the sale expressly informed the respondent that the sale was to be subject to respondent’s mortgage, and that he (respondent) need not trouble himself about it nor attend the sale. Itewould be a gross fraud on the respondent to permit the appellant after all this to insist, that he did not purchase subject to respondent’s mortgage.
YI. The appellant expressly promised the respondent to pay this mortgage; and this promise was founded on good consideration.
YII. The respondent is, therefore, entitled to a decree for payment of the debt and. costs; or for foreclosure, sale, &c.
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YIH. The most that the appellant can ask is to be subrogated to respondent’s rights. But he has no claim to this; for the amount of this mortgage has for all practical purposes been paid to the appellant by its deduction from his purchase price. He is, therefore, bound to pay the respondent, and is not entitled to collect the amount of McGlarvey when thus paid. (Cherry v. Monro, 2 Barb. Ch. 619 .)
IX. The judgment at special term should be affirmed with costs.

We decline to consider the objections that have been raised to the validity of the plaintiff’s mortgage, or to his right to claim its prior satisfaction, since we entirely agree with the Judge at Special Term, that they are objections which this defendant is not at liberty to urge.'

The terms on which he purchased the property, and his own acts and declarations in relation to it, have created an estoppel from which, without a plain violation of well settled rules of equity, he cannot be discharged.

By the terms of sale the mortgaged premises, when purchased by the defendant, were declared to be “subject to a prior mortgage of $3000 with interest, from the 1st of May, 1851; also a mortgage for $700 and interest, from 10th of August, 1850this second mortgage being that which is now in suit. These words were inserted by the direction of the defendant, and, in our judgment, they reasonably admit of but one interpretation. They were a notice to every person, desiring to purchase, that it was an equity of redemption only that was to be sold, and that both the mortgages were existing encumbrances which it would be necessary to satisfy in order to complete the title. This is the meaning which the words naturally and immediately suggest, nor can we at all doubt that it was in this sense that the defendant, when he caused the words to be inserted, meant that they should be understood by those who might attend the sale; and it is, therefore, by the meaning thus conveyed, that he, emphatically, is bound. If believing that the words would thus be understood by other bidders, he meant to give them a different and more favorable interpreta

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tion in case he should become the purchaser himself, he was guilty of an intentional fraud—an intention which we certainly shall not impute to him.

We, therefore, with no hesitation, reject the interpretation that upon the argument was attempted to be given to the words “ also a mortgage of $700,” &c., namely, that they merely declare the fact that this mortgage existed, not that the premises sold would be liable to its payment. The word “ also ” clearly shows th§t the word “ subject,” in the beginning of the clause, was meant to apply to the second as well as to the first mortgage, and the omission of the word “ prior ” we regard as immaterial. It was doubtless omitted because the second mortgage, although, as first recorded it was a prior lien, was not prior in date to that under which the sale was made.

It was not denied by the able counsellor the defendant that if the clause in question had been inserted in the sheriff’s deed, it must have received the interpretation that we have stated, nor that, if thus inserted, it would have barred the defence that has been relied on; but we are clearly of opinion that we are bound to give the same construction to the terms of sale that must have been given to the deed, and that the estoppel thus created is as absolute in the one case as it would have been in the other. If the words were proper to be inserted in the deed, the defendant, the attorney who conducted the proceeding and dictated the terms of sale, was bound to insert them, and would never be permitted, as a purchaser, to take advantage of the omission. Were it necessary, it would be our duty as a court of equity to order the deed to be reformed; but no such necessity exists, since parole evidence in a case like the present is always admissible to show what were the terms of sale and the true nature of the contract, when its admission is necessary to prevent a fraud; and but a little reflection is necessary to convince us, that to permit a person who has purchased real estate, declared at the time to be subject to an encumbrance of a certain amount, subsequently to dispute, for his own benefit, the validity of the encumbrance, would be, in all cases, to sanction a fraud. When the sale is made under a mortgage it must

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always operate as a fraud upon the mortgagor or mortgagee, since the price of the property is certain to he diminished by the whole sum declared to be due upon the prior encumbrance.

Regarding the case as a very plain one, we have not deemed it necessary to support our views by a reference to adjudged cases, but, in addition to the cases cited by the counsel for the plaintiff, we may refer to the observations of Hr. Justice HcCoun in a recent case in the Court gf Appeals (if not to the actual jndgment of the court, which perhaps was on a different ground) as an authority, which, considering the experience as an equity lawyer of that learned judge, is entitled to far more than ordinary weight. (Rawson v. Lampman, 1 Seld. 462.) The objection as to parties seems not to have been taken at special term, and -was not much pressed on the argument before us,—it is not tenable. HcGarvey and his wife are barred by the judgment in the former action, and judgment creditors are, in no case, necessary parties. If the defendant has succeeded to the rights of any of the judgment creditors, his rights will not be affected by the affirmance of this judgment.

The judgment at Special Term is affirmed with costs.

Cases cited