[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 622 The plaintiff had an equitable lien for the purchase-money unpaid until the substitution for it of the legal lien of the mortgage taken by him to secure the payment of the balance of the purchase-money. (Fish v.Howland, 1 Paige, 20; Payne v. Wilson, 74 N.Y. 348.) And the conveyance having been made and the mortgage taken by him in the same transaction, the former will be deemed made subject to the latter, and in practical effect the grantee took by the deed the equity of redemption only. (Stow v. Tifft, 15 Johns. 458; Jackson ex dem. v. McKenny, 3 Wend. 233; Rawson v. Lampman, 5 N.Y. 456; Dusenbury v. Hulbert, 59 id. 541; Coutant v.Servoss, 3 Barb. 128.) And subject to a mortgage made at the time of conveyance, by the grantee to a third person who advances the purchase-money, are dower (although the mortgage is made by the husband alone) and previous judgments against him. (1 R.S. 740, § 5; Id. 749, § 5; Code, § 1254; Jackson v. Austin, 15 Johns. 477; Kittle v. Van Dyck, 1 Sandf. Ch. 76; Cunningham v. Knight, 1 Barb. 399; Clark v. Munroe,14 Mass. 351.)
But by reason of the pre-existing equitable lien of the vendor and grantor, which continues until the substitution for it of the legal lien of the mortgage to secure the unpaid purchase-money, the mortgage so taken by him has priority over that of such third person taken at the same time from the grantee. (Clark v. Brown, 3 Allen, 509; Turk v. Funk,68 Mo. 18; 30 Am. R. 771; Appeals of Williamsport Nat. Bank, 91 Penn. St. 163.) As to the former, the continuity *Page 625 of the lien is not broken, but merely changed in character from an equitable to a legal one perfected by the mortgage to him for the balance of the purchase-money. (Stafford v. Van Rensselaer, infra; Payne v.Wilson, supra.) And this is not dependent on the statute. It is unnecessary to inquire whether any different question may have arisen in the present case if no equitable title in the vendee, and no equitable lien of the vendor had preceded the time of the execution and delivery of the deed and mortgage.
A grantor may, however, by agreement waive such prior right or estop himself from asserting it, and thus subject the lien of his to the preference of that taken by another at the same time on the property, or place it on an equal footing with it.
The question at the trial was whether that was done in the present case. Such may have been the intention of the parties; and it may be that the evidence would have warranted that finding by the referee. But the facts found by him did not require such conclusion. While there was evidence on the part of the defendant tending to prove that such was the purpose of the parties at the time of the transaction, that of the plaintiff was to the contrary. The evidence and the inferences derivable from it presented in that respect a question of fact for the referee, whose determination must here be deemed conclusive upon that issue.
The understanding of the parties as found, that the deed and mortgages were to be, and accordingly were, made and recorded at the same time, did not necessarily, and as a matter of law, place the lien of the two mortgages on an equality, as would have been the case if neither of the mortgagees had been the vendor and grantor of the premises. Upon the facts so found he did not necessarily waive any rights which the relation of the vendor and grantor gave him. The inquiry as to the purpose of the understanding that the mortgages should be made and recorded at the same time was for the consideration of the referee upon the evidence, and whether it was intended to confer greater rights upon the defendant Benham *Page 626 than would arise from the mere fact that they were so made and recorded was for him to determine. He found that the plaintiff did not waive or intend to waive his equitable lien. By this he meant to be understood that the plaintiff neither waived, or intended to waive, or surrender any of the rights which the equitable lien, existing in his favor up to the time of taking his mortgage, afforded him. This was the right of preference of his lien, presumptively arising from his equitable lien merged in the legal lien of his mortgage. (Stafford v. Van Rensselaer, 9 Cow. 316.) The defendant's lien, having been founded upon the security given for that amount of the purchase-money advanced by her for the grantee, was secondary only to that of the plaintiff's mortgage.
In Potter v. Crandall (Clarke, 120) all the mortgagees were grantors of the premises, and in that respect their rights, and, consequently, as between themselves, the liens of the mortgages stood on equality. In the case at bar the defendant's claim rests upon an alleged agreement with the plaintiff to place her mortgage in such relation with that of the plaintiff. As that position is not supported by the findings of the referee the liens of the two mortgages must here be treated as having the relation in which the law placed them. While it is true, as suggested, that the defendant is entitled to the benefit of the findings of the referee most favorable to her, if there is any material conflict between them, there is no inconsistency in the findings for the application of that rule to substantially aid the defendant. (Kelly v. Leggett,122 N.Y. 633.)
The judgment should be affirmed.