Court Opinion

ID: 6122887
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:09:17.797029+00
Date Added: 2024-06-11T08:23:57.729140
License: Public Domain

Bocees, J.:
The defendant, Guy, held “No 3, St. Paul’s place,” under a contract of purchase from Scribner, the owner of the fee, when the latter gave to the plaintiff the mortgage on those premises sought to be foreclosed in this action. The mortgage then became a lien on “No. 3,” but only to the extent of the unpaid purchase-money, and it would lose its lien as to all purchase-moneys subsequently paid by Guy to Scribner on the contract, if paid in good faith without notice to the former of the mortgage lien. The rule of law applicable to the case as above stated is clearly laid down in Moyer v. Hinman (13 N. Y., 180); see, also, Trustees of Union College v. Wheeler (61 N. Y., 88). Guy was entitled to protection-for all payments made to Scribner on the contract of purchase until he had notice of the plaintiff’s mortgage lien, and the recording of that mortgage was not such notice. (See cases above cited.) He was, therefore, protected in his payments made prior to, and at the time he received his deed from Scribner pursuant to the contract of purchase, May 1, 1875, including the liens on the lot then assumed by him, for he was then without notice of the plaintiff’s mortgage. There then remained but $1,300 of the purchase-price unpaid, and for this sum he gave Scribner his bond with a mortgage covering the premises. The giving of the bond and mortgage by Guy to Scribner was not payment of the $1,300. (Hill v. *328Beebe, 13 N. Y., 556.) The plaintiff’s mortgage lien therefore yet continued to this extent, liable however to divesture or defeat, by payment of the Guy mortgage by the latter in good faith without notice of the lien. It seems that this balance of the purchase-money was not paid until the plaintiff commenced the foreclosure of his mortgage. Guy being made a party to the action, then had notice of the lien and claim, and there yet remained this $1,300 of purchase-money unpaid by him. Now if the bond and mortgage given by Guy to Scribner for this sum had still been held and owned by the latter, there could have been no question but that the plaintiff’s lien would have prevailed over any claim he, Scribner, could have asserted under Guy’s mortgage to him. The plaintiff in that case would have had a superior right in equity to any which Scribner could interpose. But the bond and mortgage given by Guy had been assigned by Scribner to the Flack brothers, and Guy paid and satisfied them to those assignees, with knowledge, however, by him of the plaintiff’s position and claim. Now, had Scribner remained the owner of the bond and mortgage, and had Guy made this payment to him, having notice of the plaintiff’s claim, he, Guy, would not have been protected in it against the claim and lien of the plaintiff. Is Guy any better protected in the payment because made to the Flacks, the assignees of Scribner ? It should be here noticed that the Flacks were also parties to this action, if that fact be of any importance, and hence, like Guy, had notice of the plaintiff’s claim, when they received payment from him. It is now the settled rule of law, that an assignee of a bond and mortgage takes the exact position of his vendor. (Bush v. Lathrop, 22 N. Y., 535 ; Trustees of Union College v. Wheeler, 61 N. Y., 88; Greene v. Warnick, 64 N. Y., 220.) In the last case cited it was held, that an assignee of a mortgage takes it not only subject to all equities existing between the parties to the instrument, but to the equities which third persons could enforce against the assignor. The plaintiff’s claim and lien were therefore unimpaired by the assignment of the Guy bond and mortgage to the Flacks. His right and equity remained to him to the extent of the $1,300 unpaid purchase-money, inasmuch as Guy had notice of his lien and claim to it while it yet remained unpaid. It follows that Guy cannot be protected by his payment to the Flacks against the *329plaintiff’s lien. The learned judge who directed judgment in this ease was, therefore, in error in holding No. 3, was, by reason of the payment by Guy to the Flacks, released and discharged from the operation of the plaintiff’s mortgage.
The learned judge has found that the plaintiff never asserted, any other lien or claim except the ordinary mortgage lien on the premises, evidenced by his mortgage here sought to be foreclosed. The legal aspect of the case is not at all changed by this finding. All right that he had against the premises was his mortgage lien. This he asserted by his action to foreclose the mortgage. Whether he had a lien, and if he had, the extent of it, were subjects involved in the action. All he could do was to assert his lien under his mortgage. He had no claim upon the Guy mortgage, nor upon the unpaid purchase-money. His claim was on the land by virtue of his mortgage lien, limited in amount to the unpaid purchase-money. The action presents his claim in its true and only aspect. He could make it in no other way than on the facts stated in the complaint. He had no right to demand a surrender or an assignment to himself of the Guy mortgage, nor could he’ enjoin Guy from paying it, if the latter was disposed so to do. All he was required to do was to give Guy notice of his lien, after which the latter was bound to respect it. The judgment appealed from must be reversed.
Boardman, J., concurred.