Case Name: JOSEPH ENGLE v. ABRAHAM HAINES AND WIFE, SAMUEL ROSS AND OTHERS
Court: New Jersey Court of Chancery
Jurisdiction: New Jersey
Decision Date: 1845-12
Citations: 5 N.J. Eq. 186
Docket Number: 
Parties: JOSEPH ENGLE v. ABRAHAM HAINES AND WIFE, SAMUEL ROSS AND OTHERS.
Judges: 
Reporter: New Jersey Equity Reports
Volume: 5
Pages: 186–192

Head Matter:
JOSEPH ENGLE v. ABRAHAM HAINES AND WIFE, SAMUEL ROSS AND OTHERS.
1. If a mortgagor, subsequently to the mortgage, sells and conveys a part of the mortgaged premises, an equity arises in favor of the purchaser, to have the part which remains in the mortgagor first sold for or towards the payment of the mortgage.
2. But if the purchaser agrees with the mortgagor that the part he buys shall be subject to the mortgage, and that the amount due on the mortgage shall be a part of the consideration he is to pay, equity will not interpose to subject the part of the mortgaged premises remaining in the mortgagor to be first sold.
3. And a subsequent grantee of such purchaser from the mortgagor, with notice, has no better equity against the mortgagor.
On the 25th of March, 1821, Abraham Haines gave his bond of that date to Stacy Haines, conditioned for the payment of $2000, with interest, in three years; and on the same day, with Agnes, his wife, executed to Stacy Haines a mortgage of the premises described in the bill, to secure the payment of the bond. On the 3d of May, 1823, Stacy Haines transferred the bond and mortgage to one Hinchman Haines; and on the 26th of October, 1841, Hinchman Haines transferred them to the complainant. On the 19th of March, 1839, Abraham Haines and his wife sold and conveyed a certain portion of the mortgaged premises to one Barclay Haines; and Barclay Haines, with his wife, on the 3d of April, 1839, conveyed the same to John W. Stitts; and on the 1st of July, 1840, Stitts conveyed it to Charles and John White, and they, with the wife of said John, on the 11th of June, 1841, conveyed it to the defendant, Samuel Ross. The bill charges that all these conveyances were made subsequent to, and with full knowledge of, the said mortgage ; and prays a sale of the mortgaged premises in satisfaction of the mortgage.
The answer of Abraham Haines, the mortgagor, states that the conveyance, mentioned in the bill, made by him to Barclay Haines, of a portion of the mortgaged premises, was made in consideration of $1500 j that $1000 of that sum was paid to him by the said Barclay, and that, at the time of the said conveyance by him to Barclay, it was agreed between them that the portion so conveyed to Barclay was to be subject to the payment of $500, due on the said mortgage on the whole premises, with interest thereon from March 25th, 1839, in relief of the residue of the mortgaged premises. That the sale of the said portion by Barclay to Stitts was made with a full knowledge, on the part of Stitts, of the said agreement between him, the mortgagor, and Barclay Haines • and that Stitts, at the time of said sale to him, gave to Barclay Haines a writing, of which the following is a copy i u I, John W. Stitts, have bought of Barclay Haines a certain tract of land, of about twenty-four acres, subject to a mortgage of $500, held by Hinchman Haines, and to pay the interest up from the 7th of March last j said tract is situate in Evesham township, which said Barclay bought of his father, Abraham Haines.” This answer then states that the Whites, at the time of the conveyance of this portion by Stitts to them, had notice of this agreement ; and that Ross, at the time of the conveyance of this portion by the Whites to him, had notice of the said agreement, and that the portion conveyed to him was alone chargeable for the said $500. The answer submits that this portion, so conveyed to and now held by Ross, should be first sold, because each of the subsequent purchasers had full notice, &c.
The answer of Samuel Ross was put in before the answer of Abraham Haines, and contains no denial of notice.
The testimony is as follows :
The writing mentioned in the answer of Abraham Haines, as given by John W. Stitts to Barclay Haines, is exhibited and marked Exhibit A on the part of Abraham Haines.
Barclay Haines, for the defendant Abraham Haines, testifies that on the 19th of March, 1839, he bought of his father, Abraham Haines, the tract of about twenty-four acres, mentioned in the answer of Abraham Haines; that at the time he bought it, he understood there was a mortgage on it with other property of Abraham Haines, then held by Hinchman Haines; and that the amount due on the mortgage was $500, with interest from March 25th, 1839; and that the balance of the .mortgage had all been paid up; he was to‘give $1500 for the tract he bought — $1000 in trade and. $500 by paying the balance due on the mortgage; there was no written agreement between him and his father; it was expressly agreed between them that this land should be liable for the $500 due on the mortgage; when he sold to Stitts, he gave Stitts notice that this tract was liable for the money due on the mortgage, and was to be alone liable for it; there was a written agreement between him and Stitts in reference to that sale; the agreement at first was verbal, but was afterwards reduced to writing and signed by Stitts, at the time of the delivery- of the deed. The paper marked Exhibit A on the part of Abraham Haines, was here shown to the witness, and he said that it was the agreement referred to ; that he saw Stitts sign it; that it is witnessed by J. R. Value, who at the time was a clerk for Stitts; he does not think that Value lives in. this state; he lived in Pennsylvania' at the time of the execution of the paper; has never known him to be in Jersey since; Stitts was to give him $1600 for the tract — $100 in cash, $1000 in trade, and the $500 due on the mortgage, which was a part of the consideration ; Stitts was to pay the interest from March 7th, 1839 ; he knows Charles H. and John F. White; they resided in Philadelphia at that time, and do still; he was at his father’s when one of them and ,a Mr. Curtis, a scrivener, whose office was in Arch street, Philadelphia, drove up and inquired for Abraham Haines; they had a conversation with him in witness’ presence; they wished to know of his father whether this tract was free and clear, or encumbered; he means the twenty-four acres spoken of; his father told them it was en cumbered by that $500 mortgage; Curtis then said to White, that man Stitts would have cheated you, perhaps, if you had not come up; his father told them that I had sold Stitts that property, and that I had an agreement from Stitts, showing about that mortgage; they fcheu asked me if I had that agreement; I told them I had, and produced it, and they both read it; Curtis then said to White, this shows the thing exactly— that there is a mortgage on that property for $500; White requested Curtis to take a copy of the agreement, which he did; one of them, he thinks White, then asked who held the mortgage; I told them Hinchman Haines; they asked if I knew whether that money, the $500, was wanted; 1 replied, I did not know; White asked if Hinchman Haines lived far distant; I told them the distance; they asked me to go there with them, to see him ; we found him, and I introduced him to those gentlemen; White asked him if he held a mortgage on the property, describing what property; he said he did; White asked him if he wanted the money; he said he would like the mouey paid off, as there were so many endorsements on the bond— that it was covered with them; White told him he expected to buy the property, and if he did, he would like to make some arrangement about the mortgage — that if required, he would give a new bond and mortgage; that he would pay the interest up punctually, and pay all the back interest, and that if he got the property, he thought he would ho able to pay off* the principal within a year; on these terms, Hinchman Haines consented to let the mortgage lay for one year; White then asked Hinchman where lie couid send che interest money; Hinchman* told him to the post-office at Marltou; they then parted; he does not remember which one of the Whites it was; it was one of them; they are in partnership together; he has a slight acquaintance with Samuel Ross, one of the defendants in this case; he had a conversation with Ross, previous to his purchasing this property; R. W. Howell, of Camden, counsel of Ross at that time, called to me as I was passing his office, and wished- me to tell him what I knew about the title of this property which Stitts bought of me, and how it was situated as respected the encumbrances; be said Ross, a client of his, was about buying it; I told him how it was situated, and that it was liable for this $500, and alone liable; he then asked me to go with him to see Ross; I went with him, and saw Ross, at his factory in Camden; I then told Ross that this property was subject to the payment of $500, as I had told his counsel before; I told Ross, at that time, what the agreement was between Abraham Haines and myself, when I bought the property, in the same manner I have stated in this examination, and also that I had sold it to Stitts subject to the mortgage, and that I had informed one of the Mr. Whites of its being liable for the said mortgage; I do not remember, exactly, the reply of Ross; he, or his counsel, said they were much obliged for the information ; Ross and Mr. Howell were both present at the conversation.
Richard W. Howell, sworn on the part of the defendant Samuel Ross, testifies that he had a conversation with Barclay Haines, in his (Howell’s) office, in relation to some part of the property bought by Ross of the Messrs. White; his recollection is, that a short time before the June Term, 1841, of the Gloucester Court, Barclay Haines called at his office to retain him in a suit; after arranging the business, witness mentioned to him that he had seen his' name in connection with some property that Mr. Ross had either purchased or was in negotiation for with the Whites, and that it might be important for Mr. Ross to possess any information he might have in relation to it; Haines said he would accompany witness in calling on Ross; they found Ross at his. factory in Camden; witness’ impression is, that Ross was just about starting to visit this farm he [either had purchased or contracted for with the Whites; witness mentioned to Mr. Ross that this was Mr. Haines, and stated that Haines knew something about the property, or some part of it; Haines went into an explanation of something relating to the property, which, at the time, witness thought might be important for Ross to know, but the particulars of which he does not recollect; witness had been spoken to by Ross before then, to draw a deed from the Whites to him; he does not recollect whether the conversation was before or after June 11th, 1841; he remembers that Ross did not seem particularly pleased, and rather cut short the explanation of Haines, by remarking that he was entirely satisfied ; the substance of it was this : that the Whites were honorable men; that he had nothing to fear from them, or that they would do what was right in the matter. [To a question here put by the counsel of Mr. Ross, whether, from what passed in the conversation between Ross and Haines, the witness understood that Ross had already purchased rhe property from the Whites, the witness says his impression certainly is that the negotiation was settled at that time.]
Cross-examined, — He cannot recollect whether he drew the deed before or after this conversation with Ross; his impression is, that the papers connected with the property were with him at this time, and had been for some time; he drew the deed that was executed; he drew another deed, which was not executed ; there were some parts of it, cannot say what, but connected with the warranty, which he does not recollect, that was objected to by one of the Whites; it might have been about the $500 mortgage, or it might not; he cannot recollect positively. [The deed which was executed contains only a covenant of warranty, and not a covenant against encumbrances.] The conversation he had with Haines, before going to Mr. Ross, was about an encumbrance on the property, or some part of it, the particulars of which he does not recollect; it was Mr. Haines’ knowledge of the matter, whatever it was, that witness desired Ross to possess; he presumes Haines made the same statement to Ross which he had made to him, in substance, in relation to this matter, whatever it was, but Mr. Ross shortened the conversation; it struck witness at the moment that Ross was not particularly desirous of hearing Mr. Haines; his carriage was waiting for him at the time; witness cannot say whether at this time the deed was executed or not; he believes he should have taken Haines to Mr. Ross whether the deed was executed or not.
The cause was heard on the pleadings and proofs.
Stratton, for the complainant.
Ten Eyck, for the defendant Abraham Haines.
Jeffers, for the defendant Samuel Ross.
Mr. Ten Eyck cited 4 Kent’s Com. 173, 174, 179; 1 Johns. Ch. Rep. 301, 303; 2 Pow. on Mortgages 553, and notes 576, 577, note 1, 561, note 6, 562.
Mr. Jeffers cited Saxton’s Ch. Rep. 413; 1 Green’s Ch. Rep. 439, 447, 448.

Opinion:
The Chancellor.
Under the testimony in this cause, the twenty-four acre tract is first chargeable to the extent of $500 and the interest due on it from the date of the conveyance from Abraham Haines to Barclay Haines. If a mortgagor, subsequently to the mortgage, sells and conveys a part of the mortgaged premises, an equity arises in favor of the purchaser, to have that part of the mortgaged premises which remains in the mortgagor, first sold for or towards the payment of the mortgage ; but if such subsequent purchaser agrees with the mortgagor that the part he buys shall be subject to the mortgage, and that the amount due on the mortgage shall be a part of the consideration for the portion he buys, equity will not interpose to protect him, by subjecting the part of the mortgaged premises remaining in the mortgagor to be first sold. A subsequent purchaser of such portion from the grantee of the mortgagor, with notice of the facts, has no better equity against the mortgagor than the first purchaser.
I cannot, under the circumstances, direct the portion remaining in the mortgagor to be first sold.
Affirmed, 1 Haist. Ch. 632.
Cited in Hog v. Bramhall, 4 C. B. Gr. 570.