[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 261
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 262 On this appeal, this court has only to consider the questions of law raised by the findings of the judge at the trial. Douglass not being a party to the mortgage, his paying the amount thereof to the mortgagees, and taking an assignment thereof, with the intention and electing that it should not be regarded paid or merged, does not extinguish or cancel it. (Champney v. Coope, 32 N.Y.R., 540.)
The appellant took the mortgage, subject to all the equities existing between the mortgagor and Douglass. (Mickles v.Townsend, 18 N.Y.R., 575.) And Douglass having agreed with him to pay the mortgage, Philbrook could have successfully defended against any recovery of judgment for deficiency, for aught that appears in the case; but not having defended, the judgment was properly ordered against him.
Douglass, at the time he sold the mortgage as a valid and subsisting security, and represented to the appellant that it was so, was the owner of the lands mortgaged, and capable of charging them with, or continuing any encumbrance upon them. He had in his possession this mortgage, fair and correct in form, unsatisfied and uncanceled of record, which he *Page 264 represents to be, and sells as a valid and subsisting security, and thereby obtains from the appellant the full amount of the mortgage; he certainly must be held to the full legal effect of a parol agreement, that the mortgage should continue a lien upon the premises mortgaged. By such an agreement, had Douglass continued to be the owner of the land mortgaged, in an action brought by the appellant to foreclose the mortgage, he would have been estopped from alleging that the mortgage was not a valid and subsisting security, and a perfect lien upon the premises, or that there were any equities existing between him and the mortgagor, that would prevent a full enforcement of the mortgage against those premises. As between Douglass, when the owner of the land, and the appellant, there could have been no defence to this mortgage. (Lawrence v. Brower, 5 N.Y.R., 374; Dalziell v. Odell, 3 Hill, 221; Frost v. Saratoga Mut. Ins. Co., 5 Denio, 157; Lamoreaux v. Visscher, 2 N.Y.R., 278; 6 Hill, 492; 10 Paige, 490.) Such were the relations existing between Douglass and the appellant, on the 8th of September, 1859, when Douglass sold and conveyed, by warranty deed, these lands to the respondent, Ames.
Ames takes the deed, with constructive notice of the existence of this mortgage. It is upon record. He then steps into Douglass' place; he takes his interest and his rights in the land, and no more; the estoppel which was controlling upon Douglass, is also controlling upon him; he has no defence to this action; his only remedy is upon the covenant of warranty of Douglass.
The order of the General Term should be reversed; the judgment of the Special Term affirmed.
MASON, LOTT and DANIELS, JJ., concurred with MURRAY, J., for reversal.
HUNT, Ch. J., read an opinion for affirmance, in which JAMES, J., concurred.
WOODRUFF, J., was for reversal, upon the facts as found; but thought that the evidence established the fact, that the *Page 265 plaintiff had notice that Douglass was the owner of the land at the time of the assignment, and was bound to pay the mortgage, and had, in fact, paid it; and if the judge had found this as a fact, the reversal by the General Term would have been right, but as the reversal there was not stated to be upon questions of fact as well as law, this court were bound by the finding, and could not take notice of the evidence.
GROVER, J., concurred with WOODRUFF's view.
Order reversed and judgment for the plaintiff.