Court Opinion

ID: 6232697
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:25:33.57829+00
Date Added: 2024-06-11T08:57:55.852674
License: Public Domain

The opinion of the court was delivered, May 15th 1866, by
Woodward, C. J.
There is no doubt that the $4500 mortgage which the defendants in error held, became the first lien upon the premises. It was recorded two hours before the $7500 mortgage, for the purpose of giving it priority, and Dungan himself swears in the bill of discovery, that he intended to give the $4500 mortgage priority, and supposed it was prior in lien to the other mortgage. After the sheriff’s sale, he continued to think so, for he paid two instalments of interest on that mortgage as a subsisting lien. If it was indeed a prior lien to the larger mortgage, it was not divested by the sheriff’s sale.
But though first upon the ■ record it is supposed not to be a prior lien, because the larger mortgage made and recorded the *256same day expresses itself to be a purchase-money mortgage. And the doctrine is unquestionably true, that if purchase-money be secured by two mortgages, and both are recorded on the same day, and within sixty days of their date, their liens are contemporaneous, and no priority of one over the other can be predicated. And, of course, a sheriff’s sale on either divests both.
I cannot understand, however, how upon the facts of this case, the' $7500 mortgage can be regarded as a purchase-money mortgage in the same sense as the $4500. The admitted facts are, that Dungan negotiated with Gilbert for the purchase of the real estate in question, situate on Yine and Wood streets, for $12,000 ; that he conveyed to Gilbert in part payment a house and lot in Arch street at $7500, and agreed to give him a mortgage on the Yine and Wood streets property for $4500.. When the bargain came to be consummated, Dungan interposed one John II. Simon and requested Gilbert to make the deed to him, and to take these two mortgages, one for $4500 and the other for $7500, with the understanding, however, that the $4500 mortgage was to be recorded first, and that the $7500 mortgage was to be assigned to Dungan. And in this manner the transaction was completed. Now as to Gilbert, the $7500 mortgage never represented a dollar of purchase-money. The Arch street house conveyed to him by Dungan, and the $4500 mortgage made to him by Simon, paid him all the purchase-money he was entitled to receive for the Yine and Wood streets property. And if the recitation in the mortgage be referred to that purchase-money, it is unfounded and false.
The only sense in which the recitation can be- true is, that Dungan having bought of Gilbert sold to Simon, and as between them, Dungan and Simon, the $7500 was purchase-money. But if this were the case the sheriff’s sale did not divest the prior mortgage, for if a purchaser of real estate having given a mortgage for part of the purchase-money sell it and take a mortgage from his vendee, both mortgages are indeed for purchase-money, but not for parts of one and the same sum of purchase-money. Necessarily one mortgage is prior to the other, for each attaches on each transition of the estate, and if the prior mortgage be first Recorded, it will not be divested by a sheriff’s sale on the subsequent mortgage. Simon regarded as vendee of Diingan could only mortgage the estate encumbered by the prior mortgage to Gilbert.
Such would have been the legal effect of the transaction if it had been truly represented by the names concerned, but they are blended and confused, perhaps for no dishonest purpose, but with such effect as to give Dungan an apparent position as the holder of a purchase-money mortgage on the same footing as Gilbert. With all the facts before the court below, it would have been wise *257to divest the ease of its fictions and reduce it to the naked truth, when it would have appeared that Dungan was not the holder of a purchase-money mortgage of the degree and quality of that which Gilbert transferred to the insurance company ; and that he was altogether right in supposing that the sheriff’s sale on his mortgage did not divest the lien of the prior mortgage. But the cause was placed upon the doctrine of estoppel. The evidence was very clear that the agents of the insurance company were induced to disregard the sheriff’s sale by the assurance of Dungan’s counsel, that it would not divest the lien of the $4500 mortgage. If this was a mistake in law, and an honest one, made with no intention to mislead, it is difficult to see how it could ground an estoppel, for the insurance company had no right to seek or act upon the opinion of the legal adviser of the adversary. The law was equally open to them as to Dungan, and they should have ascertained it by application to their own counsel instead of Dungan’s. And, besides, we verily believe that the opinion was not only honestly given, but that it was correct in point of law. Estoppel excludes the truth, but it is the truth which the insurance company seek to assert in this ease, and, therefore, I cannot see how their case falls under this head of law.
If, however, the cause is determinable on the doctrine of estoppel, the court below ruled it according to the manifest justice of the case, and we will not disturb a judgment merely because it was not placed on the best of reasons.
The judgment is affirmed.