Poillon v. Martin.

equity arising out of the wrongful manner in which the mortgage was obtained from him. Jacobson became vested with an equitable title, by his purchase and the assignment to him. But as the complainant had the legal title and the prior equity, he must prevail over Jacobson.

Again, without reference to the legal title, the complainant has the prior equity, and then the maxim applies, qui prior est in tempore, potior est in jure. It is said that the complainant's refusal to re-exchange postpones his equity to that of Jacobson. I think not, considering the circumstances of that refusal. The authorities sustain the complainant's prior right. In Van Rensselaer v. Stafford, (Hopkins' R. 569,) affirmed on appeal in 9 Cowen, 316; one Van Dusen sold to W. lands which he had bought of Van Rensselaer, and for which he was partly indebted to V. R., and took from W. two mortgages of equal date, intending that one should have priority and be assigned to V. R. for the original purchase money due to him. The mortgages were registered concurrently, but the one was soon after assigned to V. R. Afterwards V. D. assigned the

other to Stafford in good faith, for full value, without notice of V. R.'s intended priority. It was held that Stafford stood in the place of V. D., and held his mortgage subject to all the equity which V. R. had against V. D., and V. R.'s mortgage was declared to have priority. In Covell v. The Tradesmen's Bank, (1 Paige's R. 131,) Covell held a sealed note for $2425 against Hunt, payable to himself in a year. He borrowed $100 of Mullins, and pledged the note to secure it, indorsing his name in blank. M. being indebted to the Tradesinen's Bank in $2600, and pretending to own the note, transferred it to the bank in payment of $1000 of that debt, and received the balance of the note in money. He indorsed his name on the note in blank, and delivered it to the bank. All this was within two months after the sealed note was given. Covell having paid M. in full, claimed the note of the bank; and it was held that having both the prior equity and the legal title, he was entitled to the note.

The blank indorsements in that case were equivalent to the assignments here, and for aught I can see, the case is perfectly decisive of the one before me.

Smith v. Underdunck.

Fourth. The only question as to the defendant Browne, is as to the costs. It is stipulated that they abide the event of the suit, and that the bill against him be dismissed. He suffered his name to be used without any interest, in a transaction that was inequitable; and he has no claim for costs, although ignorant of the wrong.

The complainant is entitled to a decree for the restoration of the bond and mortgage by the defendants, or for the proceeds of the same if collected. He is also entitled to costs against Martin and Williams.

SMITH V. UNDERDUNCK.

Where a parol contract is made for the sale of two parcels of land for a gross price, and the vendor, at the time for completion, conveys one parcel only, and agrees to convey the other presently, and the vendee pays the whole price and enters into possession of both parcels, on receiving the deed for the one; the contract is not merged in such deed, nor is it varied by the vendee's assent to the delay, as to the other parcel. And the vendor's agreement to give the deed for the latter, is not a new parol contract, or a substitute for the first agreement. The conveyance of the one parcel is a part performance of the original contract. It is a sufficient part performance, to take a parol agreement out of the statute of frauds, for the vendee to take possession of the lands sold, by virtue of the agreement, where the assent of the vendor is shown, or is inferrible.

And where there are several parcels sold by one parol contract, it suffices if the vendee pays the price and goes into possession of one parcel only.

Sept. 2, 1844.

THE bill was filed by the heirs of Miles Smith, against the heirs of James Underdunck, for a specific performance of the contract set forth in Lord v. Underdunck, (ante p. 46,) so far as to obtain a conveyance of the 800 acres. Besides the facts there stated, the bill charged that the deed which was executed, conveyed the great bulk of the property contracted; that Smith went into possession of the whole property embraced in the agreement, and the whole has since remained in the possession

Smith v. Underdunck.

of Smith and his heirs and assigns. His heirs have sold the 800 acres in two parcels, to purchasers who entered and have kept possession, and one of them has built a house and made other permanent improvements on his parcel.

The infant defendant, by his guardian ad litem, demurred to the bill for want of equity.

T. H. Wheeler, in support of the demurrer.

R. Parker, for the complainants.

THE ASSISTANT VICE-CHANCELLOR.-The defendant's first objection is, that the parol agreement made by his father, was merged in the subsequent deed and writings between the parties.

I think the deed and bonds formed no part of the contract which the bill seeks to have performed. That contract was made before the deed was executed. It was distinct and perfect in its terms. One party agreed to sell and convey all his lands, &c. in Hancock for a gross sum; the other party agreed to pay that sum in two bonds, with security. The defect in it was, that it was not in writing. The bill obviates the defect, by showing that it was almost all performed on the vendor's part, and was wholly performed on the part of the vendee, so that it will work a fraud upon him and his heirs, if it be not enforced as to the residue against the vendor's heirs.

The execution of the deed and bonds was no part of the contract of sale. It was a part perforinance of that contract. Smith's consent to receive two deeds, waiting a short time for one of them, and paying the whole purchase money before the second deed was delivered to him, was a waiver of the strict performance of Underdunck's part of the contract, which does not deprive him of the benefit of the contract; and it would be inequitable to give to it that effect, by construing the waiver into a new verbal agreement.

The cases to which I was referred on this point, are those of attempts to explain and vary written instruments by evidence of contemporary parol agreements, or of the negotiations of the terms which were reduced to writing in such instruments.

Smith v. Underdunck.

In those cases, the written instruments were the contracts in question, and the parol stipulations were sought to be engrafted upon the writings, and made a part of the same contracts. In this case the whole agreement is by parol. There was no part of it in writing. No part of it is now in writing. It is a simple executory parol agreement. The deed for the other lands in Hancock, is not evidence of the terms of the agreement. It is evidence of its part performance by Underdunck. It is a written instrument, fulfilling in part the verbal agreement upon which the complainants file their bill. Therefore it does not merge the previous agreement. The rule that all negotiations between the parties prior to, or contemporaneous with the execution of a deed, are merged in it, is not applicable. The error of the argument consists in treating as negotiations, what the bill sets forth as positive contract.

Next, it is urged that the bill does not aver a sufficient part performance to take the case out of the statute of frauds. This objection rests principally on the averment as to taking possession of the premises.

When the case of Lord v. Underdunck, founded on the contract in question, was before me, (August 7th, 1843,) my impression was, that independent of the possession of the 800 acres, there was enough in the case to make it clear of the statute. I have no doubt upon the subject now. The contract was entire and indivisible, for the sale of all the lands in Hancock and the personal property, for $5,300. In part performance, a conveyance was executed and delivered for all except the 800 acres, and possession of all but that parcel taken and retained by the purchaser. (I leave out of view at present the possession of the 800 acres.) And the payment of the whole price was made to the seller.

These acts were sufficient to relieve the contract from the operation of the statute. I find no authority which requires the buyer to take possession of all the lands sold, in order to make such a part performance as will establish a parol agreement for their sale. The reason assigned for giving this effect to the act of taking possession, is as applicable to entering into a part of the lands sold, as it is to an entry into the possession of the whole. (2 Story's Eq. Jurispr. 66, 761.)

Smith v. Underdunck.

But I am satisfied that the averment in the bill in regard to the possession of the 800 acres, is sufficient to connect it with the contract. It is alleged that Miles Smith took possession by virtue of the agreement, and that Underdunck and his heirs. have had no possession of any part of it since the agreement was made.

In Gregory v. Mighell, (18 Ves. 328. 333,) where the contract did not provide for the possession, and no express assent was proved, the master of the rolls held that as the plaintiff had no other title to possess the land, his possession was prima facie to be referred to the agreement.

In Harris v. Knickerbacker, (5 Wend. 638,) it was held that possession of land taken and continued by the vendee, although not provided for by the contract, was an act of part performance taking the case out of the statute, it appearing that such possession was taken in consequence of the contract.

The taking possession as stated in the bill, was such an act as could be done with no other view than that of the agreements being performed; 1 Sugd. on Vend. 10th ed. 199, (141 ;) and it was expressly by virtue of the agreement. The assent of Underdunck is inferrible from the execution of the deed of the other lands, which entitled Smith to the possession of those; and from the averment that Smith went into the possession of the whole at the same time. If I am right in this inference, the case upon the possession of the 800 acres, is not impugned by any of the authorities cited by the defendant's counsel.

In reference to the consideration, the bonds with security were given and accepted for the price. This was a payment to James Underdunck, and so far as it affects the question before me, no lien or claim upon the land remained for the purchase money.

On these grounds the demurrer to the bill must be overruled.