The claim of the defendant to priority by virtue of the recording act has been so fully discussed in the opinions of DANFORTH and EARL, JJ., that it would be superfluous to say more upon that subject, than that I feel constrained by the language of the recording act to concur in the conclusion reached by EARL, J., that in order to place himself in a position to assail the plaintiff's mortgage on the ground that it was not recorded, it was incumbent upon the defendant to show, not only that he was abona fide purchaser for a valuable consideration and without notice, but that his conveyance was first recorded. He did show that he was such bona fide purchaser, and he would have been protected by the statute had he taken the precaution to place his assignment upon record before the plaintiff's mortgage was recorded; but unfortunately he omitted that precaution. It is true that the failure on his part to record his assignment did not mislead or injure any one, while the failure of the plaintiff to record his mortgage did mislead the defendant, and cause him to purchase and pay for the Jones mortgage on the supposition that it was a first lien. If it were possible to construe the statute so as to protect the defendant we should feel disposed so to do. But its language is so clear as to leave no room for such a construction. His title, so far as it rest upon the rights acquired under the assignment of the Jones mortgage, cannot therefore be sustained by virtue of the recording act.
The findings of the trial judge, however, disclose other grounds upon which the defendant Gleason is, or at least *Page 34 may be, entitled to hold the fifty-five acres free from the plaintiff's mortgage.
By his purchase on the foreclosure of the Jones mortgage, the defendant became vested with all the title which Jones had, and if for any reason the title of Jones was not subject to the plaintiff's mortgage, the title of the defendant Gleason is equally free.
The findings show that in the year 1857, when the plaintiff purchased the 275 acres (of which the fifty-five acres in question are a part), these fifty-five acres were in the possession of one Inman, who held them under a contract of sale made by Nicholas Elmendorf, through whom the plaintiff derived his title. Inman had made improvements on the land, and after the plaintiff had purchased it he made a new contract with Inman for the same fifty-five acres. Inman surrendering his old contract. Inman remained in possession after this until, by a written executory contract, he sold the same land to Samuel Jones, who entered into possession and made further improvements and remained in possession till October, 1870. On the 13th June, 1868, the plaintiff by a quit-claim deed conveyed the 275 acres to McKoon, and on the same day Morris Schoonmaker executed a deed of the same premises to McKoon, who at the same time gave to Schoonmaker a purchase-money mortgage covering the whole 275 acres, which mortgage was afterwards assigned to the plaintiff and is the mortgage now in suit.
After this conveyance to McKoon, but before the mortgage given by him had been put on record, viz.: on the 1st of October, 1868, McKoon conveyed to Jones the fifty-five acres which he held under his contract with the plaintiff, and Jones gave back to McKoon his bond secured by a mortgage on the same premises for $700, which is the mortgage under which the defendant Gleason claims. Jones' deed and mortgage were recorded on the 1st of December, 1868. Jones had no notice of the mortgage which had been given by McKoon and that mortgage was not recorded until January 8, 1869. *Page 35
The trial judge finds that Jones took his deed and gave the bond and mortgage in good faith, believing that he was acquiring an unincumbered title to his fifty-five acres, and that the whole purchase price of the land was secured by the bond and mortgage
Afterwards on the 2nd December, 1868, and before plaintiff's mortgage had been recorded, McKoon sold and assigned this bond and mortgage to the defendant Gleason for value. Gleason purchased them in good faith, believing the mortgage to be a first lien, after having searched the records and found no incumbrances on the property. He omitted however to record his assignment until March, 1870, and in the meantime, January, 1869, the plaintiff put his mortgage on record.
In 1870 Gleason foreclosed his mortgage and purchased at the foreclosure sale and received the sheriff's deed. The plaintiff was not a party to the foreclosure suit.
From the facts found it appears that when McKoon purchased the 275 acres, Jones was a vendee in possession of the fifty-five acres in question, under a contract which had precedence in point of time over the title of McKoon, and consequently over the mortgage given by McKoon to the plaintiff. That Jones as well as his predecessor had made improvements upon the land. The case does not show that this contract had been in any manner abrogated. Assuming it to have been in force at the time of the conveyance by McKoon to Jones, Jones at that time held the equitable title to the land, subject only to the payment of the amount due on his contract, and was entitled, on paying or securing that amount, to a conveyance free from any lien created either by the plaintiff or McKoon. Such a conveyance could have been compelled by him, by resort to a court of equity. The plaintiff and McKoon had full notice of the rights of Jones, and when the plaintiff conveyed to McKoon, the title of McKoon was subject to Jones' contract. So also was the mortgage given back by McKoon to the plaintiff, which is the mortgage in question. That mortgage consequently was *Page 36 not enforceable against Jones' equitable title. As between McKoon and the plaintiff, the latter was entitled, if necessary to his security, to pursue the purchase money received by McKoon, or the mortgage given therefor, but he had no lien upon the land superior to the title of Jones.
When Jones received his deed from McKoon, and when he placed that deed on record, the plaintiff's mortgage had not been recorded and Jones had no notice of it. If the conveyance was made by McKoon in fulfillment of the contract, I can see no reason why the legal title of Jones should not, for the purpose of determining the question of the lien of the plaintiff's mortgage, relate back to the equitable title of Jones, and be thus freed from the lien. A court of equity would doubtless have so decreed had Jones been put to his action for specific performance. But the General Term held that Jones, by accepting the deed from McKoon, lost all his equitable rights under his contract as vendee in possession; that they became merged in the legal title, and he could claim nothing except what he derived from that deed. Assuming this position to be sound, then clearly Jones was protected by the recording act, against the plaintiff's mortgage. He was a purchaser in good faith without notice of the mortgage, and his deed was first recorded. The only ground upon which it was held below that he was not protected by the recording act, was that he paid the whole of the purchase price by his bond and mortgage, and did not part with anything of value, and therefore he did not come within the statutory requirement of a purchaser for a valuable consideration. But if by accepting the deed he parted with his equitable title to the land, which had precedence of the plaintiff's mortgage, and with his right to his improvements, etc., then he was, within all the cases, a purchaser for value, and entitled on that ground to priority.
If the court had found in favor of the defendant Gleason on these grounds we should deem the facts found sufficient to sustain the conclusion, for we should, in accordance with settled rules, make all intendments necessary to sustain the *Page 37 finding. For instance, as nothing to the contrary appears, we should assume that the contract under which Jones held was still in force, or that Jones had equitable rights thereunder when McKoon conveyed to him, and that the conveyance was made in performance of that contract. But the court found against Gleason on the question of Jones' title, and based the judgment wholly on the rights of Gleason under his assignment of the Jones mortgage, and the recording act. We can therefore make no intendments in support of the equitable title of Jones or his position as abona fide puchaser for value, but on the contrary the intendments must be the other way, and such as tend to support the conclusions of the referee. The consequence is that as the judgment cannot be sustained on the ground upon which it was placed in the court below, it must be reversed, and a new trial ordered, and on such new trial the rights of Jones to priority under his contract, or as a purchaser for value, may be more fully considered and determined.
Judgments of General and Special Terms should be reversed and new trial ordered, costs to abide the event.