THIRD DEPARTMENT, NOVEMBER TERM, 1891.

by Emeline Miller, individually, from so much of a judgment, entered, after a trial at the Columbia Circuit before the court and a jury, in the office of the clerk of the county of Columbia on the 14th day of January, 1891, as ordered and adjudged "that the mortgages executed by Martin H. Stupplebeen to said Harvey Miller (being the said mortgage owned by the defendant Peter S. Anderson) is entitled to priority over the mortgage executed by the said Martin H. Stupplebeen to the said Richard Miller;" and from so much thereof as further orders and adjudges that said defendant "Peter S. Anderson is entitled to be paid the amount thereof out of the first moneys realized from the sale of said premises, after deducting the costs of this action and the expenses of said sale;" and from so much thereof as further adjudges that the plaintiff is only entitled to be paid the amount of her mortgage out of the avails of said sale next after the said payment of said mortgage of said Peter S. Anderson, and the costs of this action and the expenses of said sale;" and from so much of said judgment as orders and adjudges that the referee "pay to Robert E. Andrews, the attorney for the defendant Peter S. Anderson, the sum of two hundred thirty-seven and 25 dollars adjudged to the defendant Peter S. Anderson for his costs and disbursements in this action, with interest thereon from the date" of such judgment; and also from so much thereof as orders and adjudges that the referee "also pay to Robert E. Andrews, the attorney for the defendant Peter S. Anderson, the sum of $4,228.33 stated in said decision to be due the defendant Peter S. Anderson on the 16th day of April, 1890, together with legal interest thereon from said 16th day of April, 1890, or so much thereof as the purchase-money of the mortgaged premises will pay the same, that he take a receipt therefor;" and from so much thereof as orders and adjudges "that the amount due to the defendant Peter S. Anderson, or upon the mortgage held by him, is entitled to be paid out of the mortgaged property before the amount due on the mortgage held by the plaintiff," and from so much thereof as orders and adjudges "that the mortgage held by the defendant Peter S. Anderson is entitled to priority in payment to the mortgage held by the plaintiff;" and from so much thereof as limits the right of the plaintiff to any part of the avails of the mortgaged premises until after payment in full of the amount due

100

THIRD DEPARTMENT, NOVEMBER TERM, 1891.

on the mortgage held by the defendant Peter S. Anderson, and from so much thereof as orders and adjudges that if the "residue of the proceeds of said sale left, as aforesaid, after the payment above directed to be made, for the costs of this action, and interest thereon, and the fees and expenses on such sale, and of the sum of $4,228.33 to R. E. Andrews, the attorney for the defendant Anderson, the amount stated in said decision to be due said Anderson on the 16th day of April, 1890, with the interest thereon from the said 16th day of April, 1890, be insufficient to pay the plaintiff the said sum of $4,228.33 stated in said decision to be due the plaintiff on the said 16th day of April, 1890, together with legal interest thereon from said 16th day of April, 1890, the said referee specify the amount of such deficiency in his report of sale," and so much thereof as orders and adjudges, that the defendant "Emeline Miller pay such deficiency to the amount of $2,623.90, the amount paid to her under the decree of the surrogate of Columbia county out of the personal estate of Allen S. Miller, deceased, and that the plaintiff have judgment and execution therefor."

And from so much thereof as orders and adjudges "that the defendant Emeline Miller pay of any deficiency to the amount of $2,623.90, and the plaintiff have judgment and execution therefor."

And from so much thereof as orders and adjudges "that the defendants Emeline Miller and Reuben Miller, as executrix and executor, etc., of the will of the said Allen S. Miller deceased, pay any deficiency or residue of the debt of the plaintiff remaining unsatisfied from proceeds of sale of said real estate, and from said Emeline Miller individually."

And from so much thereof as orders and adjudges that any of the provisions of said judgment be "without prejudice to the plaintiff to take any proceedings which may be proper for the enforcement and collection of any deficiency that may remain out of the legatees or the estate of the said decedent Allen S. Miller, or otherwise, and also separately from each and every part of the several provisions of said judgment herein stated, as appealed from as aforesaid."

William M. Brownell and Jacob F. Miller, for the appellants. C. P. Collier, for the respondents.

THIRD DEPARTMENT, NOVEMBER TERM, 1891.

R. E. Andrews and Levi F. Longley, for Peter A. Anderson, respondent.

E. P. Magoun, for respondents, Eugene Stupplebeen et al.

LEARNED, P. J.:

The plaintiff commenced the foreclosure of a mortgage. Certain defendants, Miller and others, set up that another mortgage on the same premises, held by one Anderson, not then a party, was a concurrent lien with plaintiff's mortgage, and that Anderson should be made a party. Thereupon the plaintiff served an amended complaint setting forth the facts, and the claim of Miller and others, defendants, and averring that the plaintiff had not sufficient knowledge to form a belief whether said Anderson's mortgage was a prior or a concurrent lien. The plaintiff made Anderson a party.

On the trial the court found that the Anderson mortgage was the prior lien. The plaintiff does not appeal. But Emeline Miller and Emeline Miller and another, executrix and executor of Allen S. Miller, do appeal. Allen S. Miller had previously held the mortgage now held by plaintiff, and had guaranteed the payment. The judgment required Emeline Miller, who, as legatee, had received a certain amount from the estate of Allen S., to make good any deficiency on the foreclosure to the extent of the amount she had received.

The two questions, then, are, first, were the two mortgages concurrent liens, or was the Anderson mortgage a prior lien? Second. Can there be a judgment against Emeline Miller for deficiency?

The two mortgages were purchase-money mortgages, executed at the same time by one Stupplebeen; the one now held by plaintiff being executed to Richard Miller; the one now held by Anderson being executed to Harvey Miller; each covering the whole property, and each dated April 1, 1870, and payable in ten years.

The learned judge before whom the cause was tried, adopting the verdict of the jury on this point, found that on the day of the date of the said mortgages, and before the actual delivery thereof, it was agreed between said Richard and Harvey that the said mortgage executed to Harvey should be and remain the first lien on the said premises and should have priority over that executed to Richard.

The said judge further finds that, in pursuance of said agreement, the said mortgage to Harvey was immediately recorded, viz., on

THIRD DEPARTMENT, NOVEMBER TERM, 1891.

that day at 2.40 P. M., and that the said mortgage to Richard was left to be subsequently recorded, and was recorded by the assignee thereof April 2, 1870, at 2.30 P. M.

The said judge further finds that, at the time of making the agreement aforesaid, it was the intention of Richard to transfer the mortgage received by him to one Arnold Wise, in part payment for a farm purchased by him of said Wise; that said Harvey knew of said intention; that said agreement, by which Harvey's mortgage was to have priority, was not disclosed to said Wise, nor was said Wise informed in any way whether or not said mortgages were equal and concurrent liens. Said Richard, on said first day of April, assigned his said mortgage to said Wise, who took the same at its face as part payment on a farm thus conveyed by him to Richard, and took the same believing it and the mortgage to Harvey to be equal and concurrent liens.

No consideration was paid by Harvey to Richard for the agreement that Harvey's mortgage should have priority. No agreement as to priority was made with Stupplebeen, the mortgagor. Stupplebeen was, however, present at the time when the agreement was made.

The question was submitted to the jury whether the attorney for Mr. Wise was informed, after the execution of the bonds and mortgages, that they were equal liens in point of time. The jury answered in the negative and the court adopted the finding. This question was put to raise a presumption that the said agreement between Richard and Harvey was made with intent to defraud Wise. But such intent is not shown. Stupplebeen paid more than $6,000 for the property, above the two mortgages of $4,000 each. So that the second mortgage, in point of priority, would have been, at that time, a good security for the amount thereof.

If the two mortgagees, before the actual delivery of the mortgages, agreed that one should have priority over the other, that agreement is binding and will be carried into effect, even though the mortgages were recorded at the same time. (Jones v. Phelps, 2 Barb. Ch., 440.) In that case the court says that the law, in order to carry out the agreement of the parties, will presume that the mortgage which was to have priority was delivered before the other. The converse of this principle was decided in Greene v. Warnick (64 N. Y., 220).

THIRD DEPARTMENT, NOVEMBER TERM, 1891.

In that case the agreement was that the two mortgages were to be concurrent liens; and this agreement was enforced, although one was recorded before the other, and each had passed into the hands of a bona fide holder." To a similar effect is Stafford v. Van Rensselaer (9 Cow., 316). So that, as said in Granger v. Crouch (86 N. Y., 494), the decisive test in every case is the intention of the parties, either as actually expressed or as derived from the natural equity of the situation. Now, in the present case nothing is expressed in the instruments on the question of priority. The fact that they are of even date and of signature and acknowledgment may afford a presumption that they were intended to be concurrent. But such concurrence is not expressed in them. And the presumption yields to proof of the agreement. It was certainly competent for all the parties to agree that one mortgage should be delivered and recorded before the other, and should thus have the priority.

As Stupplebeen was present at the making of the agreement and did not object, and as the matter was one in which he seems to have had no real interest, he must be considered as assenting to the agreement between the mortgagees. (See Freeman v. Schroeder, 43 Barb., 618.)

In several of the cases above referred to the intention of the parties did not harmonize with the priority apparent on the record, and the intention was held to overcome that apparent priority. In the present case the intention and the apparent priority on the record agree.

If the agreement was, as found by the jury and the court, prior to the delivery of the mortgages, it became an executed agreement by the delivery of Harvey's mortgage to him with the consent of Richard and with the evident purpose that it was to be recorded before Richard's. It was not an agreement necessarily expressed in the mortgage. It was collateral and not merged in the mortgage. Nor does it vary the written instruments, because nothing was expressed in them as to priority.

The appellants, passing the question whether the agreement was valid as between Richard and Harvey, claim certain equities for Wise. They say that the agreement was a fraud upon him. But there is no proof of any intention to defraud him. Indeed, the fact that Harvey's mortgage was recorded at once indicates a desire