Opinion
May Term, 1897.
Gabriel L. Smith, for the appellants.
Frederick Collin, for the respondent.
The defendant Smith's title to the fifty acres in question, if directly acquired under the Tichenor foreclosure, relates back to the date and record of the Tichenor mortgage, namely, December 28, 1881. ( Rector, etc., Christ P.E. Church v. Mack, 93 N.Y. 488; Batterman v. Albright, 122 id. 484; McFadden v. Allen, 134 id. 489.) Jones, when he gave that mortgage to Tichenor, had a record title to the fifty acres, good upon its face, derived through Stillwell's mortgage to Owen. Swartwout did not commence his action against Jones and others to foreclose his equitable lien upon the fifty acres until January 18, 1883. He did not make Tichenor a party to that action. The judgment in that action, therefore, in no way affected Tichenor's mortgage. ( Campbell v. Hall, 16 N.Y. 575; Zoeller v. Riley, 100 id. 102; Masten v. Olcott, 101 id. 152; Foster v. Derby, 1 Ad. El. 781.) Tichenor was a mortgagee of the whole 350. acres, including the 50 in question, in good faith for value, namely, $11,000, the amount expressed in the mortgage. ( Wood v. Chapin, 13 N.Y. 509; Lacustrine Fertilizing Co. v. L.G. Fer. Co., 82 id. 476.) The learned trial court, as we see by his holding upon the trial and by his opinion, refused to find that Swartwout was in possession of the fifty acres at the time Jones gave the mortgage to Tichenor, and thus that Tichenor was not charged with notice of Swartwout's equitable lien.
We have examined the evidence in that respect. It shows that when Jones gave the mortgage to Tichenor, Swartwout was not living upon the fifty acres, but was working the same on shares under Jones and the Stillwell estate. Knowledge of these facts would not have impaired Tichenor's mortgage. Probably Tichenor was not made a party to the Swartwout action, because it was not thought to be safe to challenge his rights under his recorded mortgage. Thus the Recording Act protected the Tichenor mortgage against the unrecorded lien of Swartwout, and against his subsequent judgment foreclosing it.
The Tichenor mortgage was foreclosed and the fifty acres in question sold to the defendant Smith under the judgment entered in the action brought for that purpose during the pendency of the Swartwout action, judgment being entered January 27, 1890. Swartwout filed notice of lis pendens in his action March 28, 1889. The notice of lis pendens, filed in the Swartwout action, was notice to all the world to beware of acquiring any of the rights in the subject-matter of that litigation from any of the parties thereto, but as Tichenor was not a party, nor his rights in litigation in that action, the notice of lis pendens in no wise affected him or them, and, therefore, in no wise affected the defendant Smith's title under Tichenor's mortgage. (Code Civ. Proc. § 1671; Kursheedt v. U.D.S. Inst., 118 N.Y. 358; Hayes v. Nourse, 114 id. 595.) This must be so, otherwise Swartwout, by filing a notice of lis pendens, after he had lost the priority of his equitable lien over Tichenor's mortgage, could reacquire that priority against any purchaser upon the foreclosure of that mortgage, thus nullifying the mortgagee's protection under the Recording Act, and also the rule that places a purchaser under the foreclosure of the recorded mortgage under the same protection as the mortgagee. ( Lacustrine Fer. Co. v. L.G. Fer. Co., supra; Wood v. Chapin, supra.)
The learned trial judge held that the defendant Smith was the legal privy of the mortgagor, Jones, deriving title under him, and, therefore, as we infer, was charged by the Swartwout judgment with the priority of Swartwout's equitable lien. Aside from the notice of lis pendens in the Swartwout action, disposed of above, this view seems to rest upon the fact that at the Tichenor foreclosure sale Jones, in pursuance of a previous understanding with the defendant Smith, bid off the whole mortgaged premises in one parcel, but really 111½ acres of them for the defendant Smith, and the rest for himself. It is unimportant whether the defendant Smith bid off the premises in person or by another. It is not the person of the bidder that determines the nature of the title acquired under a foreclosure sale, but the judgment and the conveyance given under it to the real purchaser. It is the "conveyance upon a sale made pursuant to a final judgment in an action to foreclose a mortgage" that vests the title. (Code Civ. Proc. § 1632.) Such conveyance vests in the person to whom it is given the title of both mortgagor and mortgagee (Id.), and relates back to the date of the mortgage as we have stated above.
Assuming, but not deciding, that whatever knowledge Jones had while acting as the bidding agent of Smith was imputable to Smith, and in like manner further assuming that at the foreclosure sale Smith knew every fact connected with the title, the result would be that he knew that if Jones should, under the Tichenor foreclosure, take title to the fifty acres, Swartwout's original equity in it might reattach, but would not attach if he himself should take the title. ( Clark v. McNeal, 114 N.Y. 287. ) And he also knew that whatever was defective in the title from Jones as mortgagor would be supplied by title from Tichenor as mortgagee. But this is of no importance since Smith took his title under the foreclosure judgment, and not otherwise.
Our conclusion is that the plaintiff's title was subject to the Tichenor mortgage, and that this mortgage was valid, and the defendant Smith holding title under the judgment foreclosing it has, upon the record before us, the better title to the fifty acres. As Swartwout was not a party to the foreclosure of the Tichenor mortgage we do not intend by this decision to prejudice any right which the plaintiff may have, upon facts which may be adduced hereafter, either to subject it to his judgment or otherwise to impeach it.
The judgment should be reversed and new trial granted, with costs to abide the event.
All concurred.
Judgment reversed and a new trial granted, costs to abide the event.