Northrup v. Metcalf , 11 Paige Ch. 570 ( 1845 )

The Chancellor.

The evidence in this case shows that Hall took the legal title to the Northrup lot as a mere trustee, and as a security, in the nature of a mortgage, for the amount of that portion of the purchase money which he advanced to G. Clark for C. Northrup the elder. It comes, therefore, directly within the decision of Chancellor Kent in the case of Boyd v. McLean, (1 John. Ch. Rep. 582.) There it was held that such a transaction created a resulting trust in favor of the person for whom 'the purchase was made; which trust might be established by parol evidence. It is not necessary to decide whether a judgment against the trustee is, in equity, a lien upon the premises, even to the extent of the moneys advanced for the benefit of the cestui que trust; so as to make it the duty of the cestui que trust to search the records, and ascertain whether any such judgments exists, before he pays over to the trustee the moneys borrowed of him. For the judgment in this case was unquestionably an equitable as well as a legal lien upon the mill lot, which was conveyed to Hall on the 4th of October, 1828; the value of which lot was more than sufficient to satisfy the judgment. And the evidence in the case establishes the fact, beyond all doubt, that the whole amount of the advances of Hall, for the benefit of C. Northrup the elder, had been re-paid some months previous to the conveyance of the mill lot to Hall. It is true Hall had contracted to sell the mill lot to B. Clark, some four or five weeks before he purchased it of Metcalf. But no part of the purchase money was paid to him, by R. Clark the purchaser, until the execution of his deed of the 8th of October, 1828, when the judgment of Morris had become an equitable as well as a legal lien upon the mill lot in the hands-of Hall.

Although the docketing of the judgment was constructive: notice to subsequent purchasers from Hall, it is probable that neither R. Clark nor the Northrups were aware of its existence at the time they made their several payments to him. And in this respect, if the judgment was ever a lien, in equity, upon lot No. four, which was held in trust, the equities of the parties were equal. But the equity of C. Northrup, to a conveyance of his lot discharged of any claim on account of the judgment, was prior in point of time to the .equity of R. Clark under his purchase. And the principle that as between equal equities he who is first in time is strongest in right, would of course, throw the charge of the judgment upon the land last purchased and paid for, upon which it was a lien. The result will be the same if we apply the doctrine of constructive notice to this case. For if the equitable owners of both parcels had constructive notice of the existence of the judgment, at the time they made their several payments to Hall, the possession of lot No. four by C. Northrup, at the time R. Clark purchased, was constructive notice of his right, in equity, to that lot discharged of the lien of the judgment: That is, it was sufficient .to .put ,a subsequent, purchaser from Hall upon inquiry, whether the lot, for which he was about to pay his money, was not, in fact, primarily liablefor the payment of the amount .of the judgment; upon the equitable principle of charging the several parcels, sold by the judgment debtor, in the inverse order of alienation. And if such an inquiry had been made of the Northrups, at the time R. Clark paid his purchase money, he would have ascertained that the judgment of Morris was chargeable exclusively upon the mill lot, and upon the other property, belonging to the judgment debtors at that time ; and that in equity lot No. four was not subject to the lien of such judgment.

Morris, the original owner of the judgment, therefore, had no right to enforce the lien of that judgment, against the mere legal title of Hall in lot No. four, which title Hall held as a mere naked trustee for C. Northfup, subsequent to the 4th of October, 1828 ; and to exempt the mill lot and the property of Carpenter the surety, which was primarily liable. And the subsequent assignments certainly gave no greater rights in this respect, to L. Met-calf, than Morris himself had. The sale of lot No. four, under the execution, and the purchase thereof by Metcalf with full notice of all the facts upon which the equitable rights of these, complainants to have that lot exonerated from the technical lien of the judgment was based, was therefore inequitable and unconscientious.

The decree appealed from is not erroneous, and it must be affirmed, with costs.