Kellogg v. Rand , 11 Paige Ch. 59 ( 1844 )

The Chancellor.

The decree is erroneous in directing the south half of the mortgaged premises to be sold first, even if the vice chancellor was right in supposing that Gray’s mortgage was entitled'to a preference over that of the appellant. The admission of the parties that, the part of the premises included in Gray’s mortgage is not sufficient to satisfy the balance due upon that mortgage, and also to satisfy the complainant’s mortgage and the costs,, is not sufficient to throw the whole charge of the first incumbrance and the costs, upon the south half of the premises, which was conveyed to Lansing in fee. For if the part included in Gray’s mortgage is worth any thing beyond the amount due on that mortgage, the surplus must, in any event,, be applied in part payment of the complainant’s debt and costs, before the part of the premises, conveyed to Lansing can be, resorted to for that purpose. If Gray’s mortgage, therefore, was actually older than the first conveyance to Lansing, still the decree should have directed the master to sell the part of the mortgaged premises not embraced in that conveyance, first; and after deducting, from the proceeds, the amount still due upon Gray’s mortgage, to apply the residue of such proceeds in satisfaction of the complainant’s debt and costs, as far as it would go. The cáse would have been different, if Gray had had a conveyance in fee of that part of the premises, or if he was claiming under one who had received a conveyance in fee from Pierce, The equitable, rule is, that as between subsequent purchasers of different parcels of the premises, such parcels are to be sold in the inverse order of alienation. But a subsequent mortgage of a part of the. equity of redemption, by the owner of the whole of the mortgaged premises, is only an alienation of that part, thereof to the extent of the money due on such junior mortgage, and for which the owner of such- junior mortgage has no other security which should in equity be first resorted to. The conclusion, however, at which I have arrived upon the merits of this case, renders it unnecessary that I should place .the reversal or modification of the decree upon that ground.

I think the vice chancellor erred in supposing that the acceptance, by Lansing, of a second deed for a lot which had been previously conveyed to him by the same grantor, could operate as an estoppel in: favor of a mere stranger to that transaction. For the mortgage of another and a distinct lot to Gray, by the-grantor-in. that deed, nine months before, created no privity whatever in relation to this lot; the title to whicli was not in the mortgagor but in Powell, at the date of such mortgage. Jf the testimony of Powell did not show the fact to be otherwise, it perhaps might have been supposed that Powell had sold his interest in the south half of the mortgaged premises to Pierce, so that he had again become the owner of the legal title. But Powell swears positively he did not convey to Pierce; but that he actually recon-veyed to Lansing, although that conveyance is not recorded. What the object was in obtaining this second deed from Pierce, unless it was to get an express covenant against incumbrances, to satisfy Dennis and Fitch, who purchased from Lansing about the time such deed was given, it is difficult to conjecture. It would not, however, have the effect to destroy or in anywise impair the title which Lansing previously had in the premises; or change the equities which previously existed between him as the owner of the south half, and Gray as an incumbrancer of the north half of the mortgaged premises, in relation to the lien of the complainant’s mortgage. When Gray received his mortgage upon the north hqlf, he had constructive notice, that the part of the premises upon which he took his lien was bound in equity to sustain the whole burthen of the prior incumbrance. For the deed of March, 1835, to Lansing, for the south half of the mortgaged premises, and the conveyance from Lansing to Powell, were then both upon record. In addition to this, Gray had express notice that the south half had been previously conveyed by Pierce. For the mortgage itself recites the reservation of the right of passage in the rear of the south half of the premises contained in the conveyance to Lansing, and gives him that right as an appurtenant to the north half which was mortgaged to him. The date of Cogswell’s mortgage is whplly immaterial; as it relates back, in settling these priorities, to the date of the first deed to Lansing, under whom he claims.

The whole burthen of the complainant’s mortgage, and the costs, should have been thrown upon the part of the premises not embraced in the deed to Lansing, in the first place; and the part embraced in that deed should only be sold in case the pro-. ceeds of the sale of the other part proves to be insufficient. The decree must, therefore, be so modified as to direct the master to sell the north half of the mortgaged premises, not embraced in the deed to Lansing, with the right of passage across the rear of the south half by a four foot alley, as reserved in the deed, together with the four foot alley running from the southwest corner of the south half of the lot to the public alley; subject, however, to the right of the owners of the south half to use the same for a passage, as granted in the deed to Lansing. And the master must pay the debt and costs and expenses, specified in the vice chancellor’s decree, out of the proceeds of such sale; and also the taxable costs of the appellant upon this appeal. The residue of the proceeds are to be brought into court to abide its further order. And if the part of the premises thus sold do not bring sufficient to pay such debt, interest, costs and expenses, then the decree must direct that the master sell the part of the premises described in the conveyance tovLansing, subject to the reservation of the right of passage by the purchaser of the north half and his heirs and assigns, and with the right of passage through the four foot alley on the south line of lot B. as granted to Lansing in such deed. The proceeds of such second sale must be applied to pay the residue of such debt, interest and costs and expenses, and the surplus must be brought into court to abide its' further order.