Case Name: E. Willard Boies, Resp't, v. Sarah Benham, Impl'd, App'lt
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1891-10-13
Citations: 40 N.Y. St. Rep. 421
Docket Number: 
Parties: E. Willard Boies, Resp’t, v. Sarah Benham, Impl’d, App’lt.
Judges: 
Reporter: New York State Reporter
Volume: 40
Pages: 421–426

Head Matter:
E. Willard Boies, Resp’t, v. Sarah Benham, Impl’d, App’lt.
(Court of Appeals, Second Division,
Filed October 13, 1891.)
Mortgage—Priority.
Plaintiff sold to one G. certain- premises and took back a mortgage for, a part of the purchase price. At the same time G. gave a mortgage to defendant, who advanced him the money to make the payment for the property. It was found that it was agreed that the deed and mortgages should be recorded at the same time. Held, that upon the facts found plaintiff did not necessarily waive any rights which the relation of vendor and grantor gave him, and that his mortgage was entitled to priority over that given to defendant.
(Follett, Ch. J., dissents.)
Appeal from judgment entered on order of the general term of the supreme court in the third judicial department, affirming judgment entered upon report of referee.
The ■ plaintiff by contract with Purple Gardner agreed to sell and convey to the latter certain premises in Schoharie county for $1,800. Afterwards, on March* 11, 1884, the plaintiff received $1,000, made deed of conveyance to Gardner and took from him his bond for $800, the balance of the purchase money, secured by mortgage on the premises. This action was brought to foreclose that mortgage. The defendant Benham held a mortgage made to her upon the land to secure the payment of $1,000. The plaintiff alleged that the lien of the Benham .mortgage was subsequent to that of his mortgage. This she denied and alleged that the lien of hers was synchronous with that of the plaintiff’s mortgage. The referee determined that issue against her, and by his report found that the two bonds and mortgages were made at the same time by Gardner, who then in. the presence of the plaintiff borrowed of Benham the $1,000; that the two mortgages were recorded at the same time; that the plaintiff neither parted or intended to part with his equitable lien; and that the lien of his mortgage was prior to that of the defendant, Benham. And upon the request of the defendant, the referee further found that before the conveyance was made it was agreed between the plaintiff, Gardner and Benham, that Gardner was to execute to her a mortgage on the premises for $1,000, and this money to be paid by Benham directly to the plaintiff; that Gardner was also to execute to the plaintiff another mortgage on the premises for $800; that the deed and the two mortgages should be recorded at the same time; and that according to the agreement the deed and mortgages were executed and delivered at the same time as part of the same and one transaction, and the payment was made by Benham directly to the plaintiff. The referee refused to find that the two mortgages were equal liens, and the defendant Benham excepted.
E. Countryman, for app’lt; G. M. Palmer, for resp’t
Affirming 34 N. Y. State Rep., 940.

Opinion:
Bradley, J.
The plaintiff had an equitable lien for the purchase money unpaid until the substitution for it of the legal lien of the mortgage taken by him to secure the payment of the balance of the purchase money. Fish v. Howland, 1 Paige, 20 ; Payne v. Wilson, 74 N. Y., 348. And the conveyance having been made, and the mortgage taken by him in the same transaction, the former will be deemed made subject to the latter, and in practical effect the grantee took by the deed the equity of redemption only. Stow v. Tifft, 15 Johns., 458 ; Jackson v. McKenny, 3 Wend., 233 ; Rawson v. Lampman, 5 N. Y., 456 ; Dusenbury v. Hulbert, 59 id., 541; Coutant v. Servoss, 3 Barb., 128. And subject to a mortgage made at the time of conveyance,, by the grantee to a third person who advances the purchase money, are dower (although the mortgage is made by the husband alone) and previous judgments against him. 1 R. S., 740, § 5; id., 749, § 5 ; Code, § 1254; Jackson v. Austin, 15 Johns., 477 ; Kittle v. Van Dyck, 1 Sand. Ch., 76; Cuuningham v. Knight, 1 Barb., 399 ; Clark v. Munroe, 14 Mass., 351.
But by reason of the pre-existing equitable lien of the vendor and grantor, which continues until the substitution for it of the legal lien of the mortgage to secure the unpaid purchase money, the mortgage so taken by him has priority over that of such thiid person taken at the same time from the grantee. Clark v. Brown, 3 Allen, 509 ; Turk v. Funk, 68 Mo., 18; 30 Am. R., 771; Appeals of Williamsport Nat. Bk., 91 Penn. St., 163. As to the former the continuity of the lien is not broken, but merely changed in character from 'an equitable to a legal one perfected by the mortgage to him for the balance of the purchase money. Stafford v. Van Rensselaer, infra; Payne v. Wilson, supra. And this is not dependent on the statute. It is unnecessary to inquire whether any different question may have arisen in the present' case if no equitable title in the vendee and no equitable lien of the vendor had preceded the time of the execution and delivery of the deed and mortgage.
A grantor may, however, by agreement waive such prior right or estop himself from asserting it, and thus subject the lien of his to the preference of that taken by another at the same time on the property, or place it on an equal footing with it
The question at the trial was whether that was done in the present case. Such may have been the intention of the parties, and it may be that the evidence would have warranted that finding by the referee. But the facts found by him did not require such' conclusion. While there was evidence on the part of the defendant tending to prove that such was the purpose of the parties at the time of the transaction, that of the plaintiff was to the contrary. The evidence and the inferences derivable from it presented in that respect a question of fact for the referee, whose determination must here be deemed conclusive upon that issue.
The understanding of the parties as found, that the deed and mortgages were to be, and accordingly were, made and recorded at the same time, did not necessarily, and as matter of law, place the lien of the two mortgages on an equality, as would have been the case if neither of the mortgagees had been the vendor and grantor of the premises. Upon the facts so found he did not necessarily waive any rights which the relation of vendor and grantor gave him. The inquiry as to the purpose of the understanding that the mortgages should be made and recorded at the same time was for the consideration of the referee upon the evidence ; and whether it was intended to confer greater rights upon the defendant, Benham, than would arise from the mere fact that they were so made and recorded, was for him to determine. He found that the plaintiff did not waive, or intend to waive, his equitable lien. By this he meant to be understood that the plaintiff neither waived, or intended to waive or surrender, any of the rights which the equitable lien existing in his favor up to the time of taking his mortgage afforded him. This was the right of preference of his lien, presumptively arising from his equitable lien merged in the legal lien of his mortgage. Stafford v. Van Rensselaer, 9 Cow., 316. The defendant's lien having been founded upon the security given for that amount of the purchase money advanced by her for the grantee, was secondary only to that of the plaintiff's mortgage.
In Potter v. Crandall, Clarke, 120, all the mortgagees were grantors of the premises, and in that respect their rights and consequently, as between themselves, the liens of the mortgages stood on equality. In the case at bar the defendant's claim rests upon an alleged agreement with the plaintiff to place her mortgage in such relation with that of the plaintiff. As that position is not supported by the findings of the referee, the liens of the two mortgages must here be treated as having the relation in which the law placed them. While it is true, as suggested, that the defendant is entitled to the benefit of the findings of the referee most favorable to her, if there is any material conflict between them, there is no inconsistency in,the findings for the application of that rule to substantially aid the defendants. Kelly v. Leggett, 122 N. Y., 633; 33 N. Y. State Rep., 264.
The judgment should be affirmed.