Subsequent incumbrancers are supposed to have acquired their interests with reference to existing liens on the premises, of which they had notice, and are, therefore, entitled to have payments applied, so far as to reduce those liens as they appear of record; and their rights cannot be prejudiced by private arrangements of parties, though such may be binding as between the parties themselves. Whitacre v. Fuller, 5 Minn. 508. But a junior mortgagee cannot avail himself of usury in the senior mortgages. Powell v. Hunt, 11 Iowa (3 With.), 430.

Where a party holds a third mortgage, the two prior ones being held by another, who has obtained judgment of foreclosure and sale on them, he cannot, as such, claim to be subrogated to the first, nor is he entitled to a stay of the sale by injunction. If he had any ground to equitable relief, he should have set it up on the foreclosure. As mere third mortgagee his rights as such are protected by the opportunity to purchase at the sale or pay up beforehand. Bloomingdale v. Barnard, 7 Hun (N. Y.), 459.

§ 7. Sureties or guarantors of mortgage. A surety may be substituted in the place of the creditor to whom the principal debtor has made a mortgage as security for the payment of the debt, if such surety is compelled to pay it. Cheesebrough v. Millard, 1 Johns. Ch. 409; Root v. Bancroft, 10 Metc. 48; Burton v. Wheeler, 7 Ired. Eq. 217; Ohio Life Ins. Co. v. Winn, 4 Md. Ch. Dec. 253. So, a creditor may avail himself, as a security for his debt, of the benefit of a mortgage which his debtor has made to a surety for such debt by the way of indemnity. Curtis v. Tyler, 9 Paige's Ch. 432; Moore v. Moberly, 7 B. Monr. 299; Eastman v. Foster, 8 Metc. 19; Stewart v. Preston, 1 Fla. 10. As where one gives to an accommodation indorser a mortgage of indemnity, and both maker and indorser become insolvent, the holders of the notes may avail themselves of the mortgage security (Rice v. Dewey, 13 Gray, 47); and one surety may avail himself of a mortgage made by the principal to his co-surety. Hall v. Cushman, 16 N. H. 462.

The right of subrogation, though originally a doctrine of equity, has become recognized as a legal right. LaFarge v. Herter, 11 Barb. 159;5 Seld. 241; Aiken v. Gale, 37 N. H. 501. And if two co-debtors mortgage land belonging to them jointly to secure a joint debt, and one of them is obliged to pay the whole debt, he becomes in technical language subrogated to the place of the mortgagee, as to the mortgage upon the co-debtor's half of the estate, as security for his contributing his share of the debt. Sargent v. McFarland, 8 Pick. 502. But if, as between the debtors, one is the principal and the other the surety in the mortgage debt, and the real principal of the debt pay it,

the doctrine of subrogation as to the land of the other mortgagor does Crafts v. Crafts, 13 Gray, 362; Cherry v. Monro, 2 Barb.

not apply.

Ch. 618.

A surety may have the benefit of the mortgage to the creditor by the principal debtor, even though, before he has been called on to pay the debt, the mortgagor has sold and conveyed the estate to another. Gossin v. Brown, 11 Penn. St. 527. And where a creditor voluntarily does an act invalidating or discharging the security that he holds from the principal for a debt to which there is a surety, he will, thereby, lose his claim on the surety, to the same extent as the latter is injured by such act of the creditor. Hayes v. Ward, 4 Johns. Ch. 123. But a surety is not entitled to be substituted as to the security until the whole debt shall have been paid. Stamford Bank v. Benedict, 15 Conn. 437. And he may lose the benefit of the subrogation by his own laches in suffering other persons to acquire a valuable interest in the land in consequence of his omitting to make known his own claim upon it. Jarvis v. Whitman, 12 B. Monr. 97.

Where one purchases land, and assumes in his deed to pay off a bond and mortgage of his grantor to which the land is subject, he thereby becomes a surety in respect to the mortgage debt. Klapworth v. Dressler, 2 Beasley (N. J.), 62; Hoysradt v. Holland, 50 N. II..433. But a promise by the grantee to the grantor, to pay a mortgage debt as part of the purchase-money of the land conveyed, does not render the grantee surety for the grantor, but, as between the parties, the grantee is the principal debtor and the grantor the surety. Huyler v. Atwood, 26 N. J. Eq. 504. The acceptance by the grantee of a deed conveying lands subject to a specified mortgage and providing that he shall assume and pay the mortgage, binds him as effectually as though the deed were inter partes and executed by both grantor and grantee. The mortgagee may treat both the mortgagor and his grantee under such a promise as principal debtors, and may have a personal decree against either or both. Crawford v. Edwards, 33 Mich. 354.

An indorser upon a note not yet matured, gave a mortgage upon a vessel to secure his contingent liability, by which he was entitled to an extension of time for payment. It was held in this case that the mortgagee was to be deemed a mortgage, for a valuable consideration, and entitled, as such, to intervene for the protection of his interest in a libel filed against the vessel to recover wages. Either the extension of time for payment of the debt, or the waiver by the holder of the note of the right to sue the indorser, and in such suit to attach the vessel, constituted a sufficient consideration for this purpose. The Dubuque, 2 Abb. (U. S.) 20.

Where the principal debtor executes to the payee of a note, on which there is personal security, a mortgage for further security, until the surety pays the debt, he has no right to be subrogated to the rights of the mortgagee, and to have the mortgaged premises sold and the money paid to him. Conwell v. McCowan, 53 Ill. 363.

For an exhaustive collation and discussion of the doctrine of subrogation, and substitution as applicable to the parties to a mortgage, see Rardin v. Walpole, 38 Ind. 146.

Where a mort

§ 8. Sureties, etc., indemnified by mortgage. gage is given, not to secure a debt, but to indemnify a surety, there the security does not in the first instance attach to the debt, as an incident to it, but whatever equity may arise in favor of the creditor with regard to the security arises afterward, and comes into existence only upon the insolvency of the parties holden for the debt. Jones v. Quin nipiack Bank, 29 Conn. 25.

Where several debts are secured by a mortgage, for some of which there are sureties who are not parties to the mortgage, the mortgagee becomes the trustee for the sureties to the amount of the funds thus provided for their indemnity; and upon a sale of the mortgaged property, the mortgagee must see that their just proportion of the proceeds of the sale is applied to the discharge of the debt on which the sureties are bound. Fielder v. Varner, 45 Ala. 429.

Where one conveys land to a trustee for the benefit of a surety, conditioned that the conveyance shall be void if the grantor shall pay certain debts for which the surety is liable, the assent of the creditor will be presumed even though the conveyance was made without his knowl edge, and the deed will be held, not only as indemnity to the surety, but as security for the debt. The trustee cannot discharge or defeat the trust, except to a purchaser for a valuable consideration, without notice. Carpenter v. Bowen, 42 Miss. 28.

If the owner of land makes two mortgages thereof, and in the second mortgage, which is given merely to indemnify a surety upon a note, who has since paid nothing thereon, reserves to himself the right, to cut and dispose of all the wood on the premises, and in the first mortgage stipulates for the right to make coal from the wood under an agreement which provides that he shall deliver the same to the first mortgagees, and that the amount that may be due thereon shall be indorsed on the mortgage note, an assignee of the second mortgage has no right to complain, in a suit against him to foreclose the first mortgage, of a settlement fairly made between the mortgagor and the first mortgagees, by which the amount to be so indorsed is ascertained and determined, and is indorsed accordingly, although in such settlement a

set-off was allowed for supplies furnished by them to enable the mortgagor to go on with his work, and to a third person with whom he had a contract respecting the same subject-matter, but conditional judgment will be entered for the amount due on the note after deducting the indorsement. Pomeroy v. Latting, 2 Allen (Mass.), 221.

9. Possession of mortgaged property. Where lands are conveyed in mortgage, the mortgagee, as against the mortgagor and all persons claiming under him, is taken to be the owner of the fee, and as the right of possession follows the right of property, if there be no stipulation to restrain it, he is entitled to possession before condition broken, and is liable to be dispossessed only by performance of the condition at the time limited. Erskine v. Townsend, 2 Mass. 493; Blaney v. Bearce, 2 Greenl. 132; Collins v. Torry, 7 Johns. 278. Otherwise, in some of the States. Trimm v. Marsh, 54 N. Y. (9 Sick.) 599. But where it appears by necessary implication from the condition of the mortgage that the understanding of the parties must have been that the mortgagor should remain in possession of the land, the mortgagee cannot maintain a writ of entry to recover the land, until the condition be broken, or waste be done. Hartshorn v. Hubbard, 2 N. H. 453. Where a person, by taking possession of mortgaged premises, disseizes the mortgagor, he also disseizes the mortgagee, and, while the disseizor remains in possession, the deed of the mortgagee will not pass his, the mortgagee's, interest in the land. Poignand v. Smith, 8 Pick. 272.

Permission to the mortgagee to take possession of the mortgaged premises, given by the mortgagor's administrator after he had parted with the title, is of no more force than if given by a stranger. Newton v. McKay, 30 Mich. 380. Under the statutes of Michigan, a mortgagor is entitled to recover possession from his mortgagee at any time before his rights have been foreclosed in some manner. Humph rey v. Hurd, 29 Mich. 44.

§ 10. Nature of mortgagor's possession. The rights of the mortgagor and of the mortgagee in the matter of possession of the mortgaged premises are so independent and distinct, that if either, while in possession, or any one claiming under him, commits waste by acts which essentially impair the value of the inheritance, the other may restrain him from so doing by an injunction through a court of chancery. Given v. M' Calmont, 4 Watts, 460; Fay v. Brewer, 3 Pick. 204; Smith v. Moore, 11 N. H. 55. But the possession of the mortgagor to a certain extent is the possession of the mortgagee. Partridge v. Bere, 5 B. & Ald. 604; Chapman v. Armistead, 4 Munf. 382; Gould v. Newman, 6 Mass. 239; Beach v. Royce, 1 Root, 244. In Vermont,

the mortgagor's possession after condition broken is as tenant at will to the mortgagee or his assignees; so that if he cut timber and the assignee, coming into possession, use it, trover will not lie. Morey v. McGuire, 4 Vt. 327. See, too, Judd v. Woodruff, 2 Root, 298. Where a mortgagor continues in possession of the mortgaged premises, and there is no contract on the subject, he may be considered either as a trespasser or as a tenant at will, at the election of the mortgagee. Pettengill v. Evans, 5 N. H. 54; Blaney v. Bearce, 2 Greenl. 132. And a mortgagor in possession does not bind his mortgagee in passing any right of his in the premises to third persons. Ellithorp v. Dewing, 1 Chip. 141; Beacher v. Cook, 1 Root, 296.

A mortgagor, so long as he remains in possession, or until actual entry by the mortgagee, may receive the rents and profits to his own use, and is not liable to account therefor to the mortgagee. Fitchburgh Manuf. Co. v. Melven, 15 Mass. 268. Nor is he liable even for such as may accrue between the time of the commencement of the action to foreclose, and the time of taking possession upon execution. Mayo v. Fletcher, 14 Pick. 525.

The possession of a mortgagor must be presumed to be in subordination to the title of the mortgagee until the contrary is shown.

Conner v. Whitmore, 52 Me. 185; Dadmun v. Lamson, 9 Allen, 85. A mortgagor in possession may maintain an action for injury to timber growing on the mortgaged premises. Annapolis, etc., R. R. Co. v. Gantt, 39 Md. 115. But neither the mortgagor nor his grantee, when in possession, can acquire any rights hostile to the mortgagee by paying the taxes on the mortgaged premises. It is their duty to do so; and the mortgagee may well regard such payment as a protection of his interest. Medley v. Elliott, 62 Ill. 532.

§ 11. Nature of mortgagee's possession, his rights and duties. A mortgagee, who has gone into peaceable possession of the mortgaged premises after a default, cannot be ejected by the mortgagor while the mortgage remains unsatisfied. Hennesy v. Farrell, 20 Wis. 42; Den v. Wright, 2 Halst. 175; Pace v. Chadderdon, 4 Minn. 499; Sahler v. Signer, 44 Barb. (N. Y.) 606. The mortgagee after condition broken is entitled to the possession of the premises and may maintain trespass quare clausum for an injury thereto. Harris. v. Haynes, 34 Vt. (5 Shaw) 220; Pettengill v. Evans, 5 N. H. 54; Bussey v. Page, 14 Me. 132. When a mortgagee elects to consider his mortgagor in possession, after condition broken, as his tenant, he is a tenant at sufferance and not entitled to notice to quit, and a purchaser from the mortgagor would be in no better condition than his vendor. Jackson v Warren, 32 Ill. 331. But a mortgagee in possession, after having