The action is brought to foreclose a mortgage for $15,000 given by the defendant, Fanny IL Simons, to one Allen, and afterward assigned to the plaintiff.
It appears from the case that Allen was the owner of the premises covered by the mortgage, and that Mrs. Simons held two mortgages given by Allen amounting to the sum of $11,196.67. That an arrangement was made between them by which she was to buy the premises of Allen for $15,000, and pay him by satisfying her mortgages and giving him her bond and mortgage for the remainder; that when the contract was executed, the two prior mortgages were satisfied, but through the fraud of Allen the amount of them was not deducted from the agreed price, but Mrs. Simons gave her bond and mortgage for the full sum of $15,000. It further appears that at the time of this transaction there was upon the premises a prior mortgage for $1,000, which Allen fraudulently represented to Mrs. Simons was paid, but that in fact an action was then pending to foreclose it, and that Mrs. Simons was compelled to bid the premises in on the foreclosure sale and pay $1,436.58,«the amount due on that mortgage. On the 9th day of February, 1877, Mrs. Simons contracted with the defendant, Mary A. Bates, to exchange the mortgaged premises for certain lands owned by Mrs. Bates. The price fixed for these mortgaged premises was $24,050. Mrs. Bates was to take the premises subject to the plaintiff’s mortgage and interest, and the value of the lands to be conveyed to Mrs. Simons was fixed at the difference between $24,050, and the amount then estimated due on the mortgage. In September, 1877, Mrs. Simons completed the transaction by conveying the premises to Mrs. Bates. The deed contained the following clause: “ Subject to a certain mortgage executed by the party of the first part, to Thomas E. Allen, for the sum of fifteen thousand dollars, bearing date May 10,1876, if there shall be found anything owing and unpaid on the same.”
In 1879 the plaintiff brought this action to foreclose the mortgage. Mrs. Simons answered setting up the fraud in the transactions between herself and Allen, and claiming that the mortgage should be reduced by the amount which Allen had defrauded her. After she had answered, she was by order of the court and with *366consent of plaintiff released from any liability on her bond. Mi’s. Bates also answered, setting up the same defenses as were pleaded by Mrs. Simons.
Upon the trial the learned justice found the facts substantially as stated above, and held that Mrs. Bates was entitled to have deducted from the amount of the mortgage, the damages which Mrs. Simons sustained by the two frauds of Allen, and that the mortgage was a lien only for the difference,-deducting a payment made on it, and ordered judgment of foreclosure for that amount. From the judgment entered on this decision plaintiff appeals.
As to the question whether a deed was delivered from Mrs. Simons to Mrs. Bates before the deed of September 25, 1877, we see no reason to dissent from the conclusion of the learned justice at Special Term. He had the witnesses before him, and could judge better than we, of the credit to be given to them.
The serious question presented is upon the effect of the provision of the deed of September 25, 1877. There can be no doubt that if the deed had said simply that the land was conveyed subject to the mortgage of $15,000, and that sum had been deducted from the price, the case would be within Freeman v. Auld (44 N. Y., 50), and Mrs. Bates could not question that the whole sum was due. But the deed contains more. It is said that the land is conveyed subject to that mortgage of $15,000, if there shall be found anything due and owing upon it. We must give effect to this clause, .and we are clear, as matter of law, that by reason of it, Mrs. Bates stands in the same condition as if she had purchased the premises subject to the mortgage exactly as it was in truth, without regard to the amount of the purchase-price. In that case there is no doubt that Mrs. Bates can question the aqiount due to the same extent as Mrs. Simons might. (Russell v. Kinney, 1 Sandf. Ch., 34, 39; Hartley v. Tatham, 10 Bosw., 273.) The rule is well settled that the plaintiff took this mortgage subject to all defenses in the hands of the mortgagor. (Trustees of Union College v. Wheeler, 61 N. Y., 88.) He holds it subject to the equities attending the original transaction. (Crane v. Turner, 67 N. Y., 437.) Looking at the original transaction, we see that there never was $15,000 due. The whole sum due upon it when it was given was but $3,803.33. That was in fact the sum “ due and owing,” the amount legally demandable upon *367it, and as to which, it was in fact a lien. As to all the remainder there was a perfect defense to the mortgage. And this defense was not personal to Mrs. Simons, bnt arose from the fact that there was .a failure of consideration.
We think the court at Special Term was right in holding that this sum of $11,196.67, was not owing upon this mortgage, and that it was not a lien upon Mrs. Bates’ premises to that extent. We are ■also quite clear that the payment of $1,050, made May 10, 1877, was properly deducted from the amount of the mortgage. No such amount of interest was due on that day, and as the payment was greater than the interest, the excess was properly credited on the principal.
But the amount of the Taylor mortgage stands on a different ■footing. Upon the facts found, the right to recover from Allen for that fraud was a separate and independent cause of action, which belonged to Mrs. Simons. (Gillespie v. Torrance, 25 N. Y., 306; Henry v. Daley, 17 Hun, 210.) It never was the property of Mrs. Bates, and there is nothing to prevent Mrs. Simons asserting it now against Allen. Besides that, we do not think that it existed as a •cause of action in favor of Mrs. Simons when this mortgage was assigned by Allen. It is true that Allen had then made the fraudulent representations, but no damage had come to her. If he had afterward paid the mortgage, or if it had been extinguished, no damage would have resulted. Till there is damage there is no cause of action. It is the concurrence of fraud and damage which gives the right of action. (Hubbard v. Briggs, 31 N. Y., 518, 529; Cooley on Torts, 62; People v. Stephens, 71 N. Y., 557, per Allen, J.) Mrs. Simons suffered no damage until she bid off the premises on the foreclosure sale in July, 1877.
The plaintiff then owned this mortgage. His rights had before that attached, and the right of action then arising against Allen could not affect him. (Code of Civ. Proc., § 502, sub. 1.)
The purchase by Mrs. Simons at the sale upon this mortgage did not extinguish the lien of the plaintiff’s mortgage. She was then the owner of the fee, but she had contracted to sell and she was bound to pay the Taylor mortgage, and she bought the premises at that sale simply as a way of carrying out her contract. Her subsequent conduct shows that she did not intend to extinguish *368plaintiff’s mortgage, for she conveyed subject to it, and Mrs. Bates having taken subject to that mortgage cannot now question its existence or validity. (Jones on Mortgages, §§ 735, 736.)
We do not think that the court erred in excluding the evidence of Bates’ declarations a year after the transaction. It did not appear that when he made them he was acting in his wife’s business, and therefore they were not original evidence. (Abb. Trial Ev., 327.) It appears by the case to have been offered for no other purpose.
For the error in regard to the Taylor mortgage the judgment must be reversed and a new trial ordered, costs to abide event, unless the defendant shall stipulate to modify it by adding to the amount for which the mortgage is to be deemed a lien the sum of $1,041.41, with interest at seven per cent from May 10,1876, being the amount then deducted for the Taylor mortgage. Such stipulation, if made, to be given in twenty days after service of this order. If such a stipulation is given the judgment as modified' is affirmed, without costs of this appeal to either party.
Osborn, J., concurred.