as a defense to an action by the mortgagor or his grantee to redeem. Ten Eyck v. Craig, 62 N. Y. (17 Sick.) 406. But a mortgagee has no right in an action at law on the debt secured by the mortgage to sell and buy in the mortgaged lands. In such case if he purchases one part and a stranger the other, the lands are left as they stood before the sale, and the stranger's purchase, if valid at all, amounts to a purchase of the equity of redemption; and the latter has a right to demand that all the mortgaged lands be brought before the court for foreclosure, in order to have each part bear its proportion of the entire indebtedness. Young v. Ruth, 55 Mo. 515.

Where a mortgage contains a power of sale whereby, upon failure to perform by the mortgagor, the mortgagee may sell at public auction, if the authority to make the sale is executed and regulated by statute, the mortgagee may himself become the purchaser. Bergen v. Bennett, 1 Caines' Cas. 1. But he cannot do so, and thereby extinguish the mortgagor's right of redemption against his consent, where the sale is made by agreement between the parties, though made at public auction. It is in the nature of a trust to sell, where the trustee cannot himself be purchaser. Hyndman v. Hyndman, 19 Vt. 9.

The rule that a mortgagor cannot, through a tax deed, acquire a title which will defeat a mortgage, was applied in case of a tax deed acquired by a grantee under a warranty deed excepting from its covenants an existing mortgage and all back taxes, but executed after the purchase from the mortgagor. Stears v. Hollenbeck, 38 Iowa, 550.

§ 16. Rights of mortgagor's creditors. 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. Ten Eyck v. Holmes, 3 Sandf. Ch. 428; Eastman v. Foster, 8 Metc. 19; Stewart v. Preston, 1 Fla. 10.

Where a railroad company executes a mortgage by the terms of which it is clearly implied that the company is to hold possession and receive the earnings of the road until the mortgagees should take it or the proper judicial authority intervene, such possession gives the right to the whole fund derived therefrom and renders it, therefore, liable to the creditors of the company as if no mortgage existed. Gilman v. Illinois, etc., Tel. Co., 91 U. S. (1 Otto) 603.

A creditor by note and mortgage may obtain judgment on the note and subject other property of his debtor to its payment. Karnes v. Lloyd, 52 Ill. 113.

Where a creditor of an estate represented insolvent, whose claim is partly secured by mortgage, has his whole claim allowed, and

receives a dividend upon the whole, he waives his security by the mortgage. Hooker v. Olmstead, 6 Pick. 481.

The purchaser of

§ 17. Rights and liabilities of purchasers. mortgaged property, who assumes the payment of the mortgage debt, becomes personally liable therefor. Schlatre v. Greuud, 19 La. Ann. 125. But the liability of the grantee does not discharge the grantor from his liability also to the mortgagee. Meyer v. Lathrop, 10 Iun, 66; Calvo v. Davies, 8 id. 222. Where he assumes the payment of a portion of the mortgage debts, as a part of the purchase-money, the amount so assumed becomes his personal debt. But the residue does not, although he may be compelled to pay the same to save his property. Hence a general payment, made by the purchaser on the mortgage debts, will be first applied to the portion for which he is personally liable. Snyder v. Robinson, 35 Ind. 311; 9 Am. Rep. 738. One who purchases premises covered by an undischarged mortgage, to secure the payment of notes, where he has knowledge of facts sufficient to put a prudent man on inquiry, and the mortgagee is well known and easily accessible to him, and when inquiry would have elicited information that the mortgage was still in force as between the original parties, cannot claim to be a purchaser without notice of the equities of the mortgagee, simply because the mortgagor has possession of and exhibits to him the notes described in the mortgage; such purchaser stands in no better position than the mortgagor himself. Boxheimer v. Gunn, 24 Mich. 372. A sale by the sheriff of property, without mentioning any mortgage, conveys a title subject to a mortgage, if the mortgage be a valid lien, and the sheriff is not a trespasser by such sale in general terms, though the property be subject to an incumbrance. But when the property is sold subject to an incumbrance, of course the purchaser cannot contest or deny the validity of the incumbrance. Porter v. Parmley, 52 N. Y. (7 Sick.) 185. A deed in the nature of a mortgage to secure the payment of certain enumerated debts creates an incumbrance on the whole property conveyed for the whole of the indebtedness secured. If the mortgagor sells a portion of the land thus incumbered to a purchaser who had constructive, though not actual, notice of the mortgage, and transfers the notes of the vendee for the purchase-money, to one of the mortgage creditors, to be applied to the reduction of the mortgage debts, the payment of such notes by the purchaser to one of the mortgage creditors does not release the land thus sold from the mortgage, unless it was so agreed between the purchaser and the parties to the mortgage. Colby v. Cato, 47 Ala. 247. A purchaser at a sale under a judgment, or mortgage which is a lien upon the equity of redemption merely, is presumed to bid only to

the value of such equity, and the land purchased is the primary fund to pay the amount due on the prior bond and mortgage. Hanger v. State, 27 Ark. 667. And on a sale under mortgage of a leasehold of a mill, and the machinery mentioned in the schedule attached, will pass other machinery put into the mill after the execution of the mortgage. Ladley v. Creighton, 70 Penn. St. 490.

If the mortgagee indulges the mortgagor for a consideration until he becomes insolvent, such indulgence will make good the title of a purchaser from the mortgagor; but if without any consideration he indulges him, such indulgence, unless the facts show fraud, will not relieve the title of the purchaser from the incumbrance of the mortgage. Fry v. Shehee, 55 Ga. 208.

The actual possession of land, by a purchaser holding a bond for a deed from his vendor, is notice of his rights to one taking a mortgage on the land from the vendor, and the mortgagee will take a lien only on the vendor's right. Doolittle v. Cook, 75 Ill. 354. On the death of a purchaser at a sale, made under a power contained in a mortgage, without having completed the purchase, his executors may pay the purchase-money, and take a deed to themselves as executors, in trust for the persons interested in the estate; and on the title conveyed by such a deed, they may recover in ejectment against the mortgagor. Lewis v. Wells, 50 Ala. 198. The purchaser at an irregular foreclosure sale obtains all the rights of the mortgagee, including the right of possession. Hoffman v. Harrington, 33 Mich. 392. And one, who has received the title to lands under an arrangement which in legal effect made his rights no more than those of a mortgagee, is not thereby precluded from becoming a purchaser at a chancery sale on the foreclosure by a third person of another mortgage, and holding the title like any other purchaser; and such a purchase would cut off all previous equities of the other party. Moote v. Scriven, 33 Mich. 500.

No authority to commit waste upon mortgaged premises will be implied from the object for which the property was purchased, nor from the price agreed to be paid. Coggill v. Milburn Land Co., 25 N. J. Eq. 87. The purchaser of mortgaged premises at a sheriff's sale may avail himself of the defense of usury against a prior mortgage, although he purchased subject to that mortgage. Warwick v. Marlatt, 25 N. J. Eq. 188.

Where ten acres of growing wheat was mortgaged, and the mortgage duly recorded, and afterward the mortgagor, without the consent or knowledge of the mortgagee, harvested, threshed, removed and sold the wheat, and the purchaser converted it to his own use by mixing it with other wheat, the purchaser was held liable to the mortgagee, for the value of the wheat. Duke v. Strickland, 43 Ind. 494.

ARTICLE VI.

REGISTRY, NOTICE AND PRIORITY.

Section 1. In general. Successive mortgages duly registered take effect, and avail as security in favor of their successive holders, according to their priority of registration. Johnson v. Stagg, 2 Johns. 510; Parker v. Wood, 1 Dall. 436; Connoly v. Stewart, 2 Bay, 509. And this is but carrying out the doctrine of the effect of notice in equity, the registration being constructive notice to all persons affected by it. Grant v. Bissett, 1 Caines' Cas. 112; Doe v. Bank of Cleveland, 3 McLean, 140.

The record and lien of a mortgage commences the moment it is left for record, indorsed by the recorder and entered upon the mortgage index. Brookes' Appeal, 64 Penn. St. 127; Kessler v. State, 24 Ind. 313. But the index to the record of a mortgage forms no part of the record, and is not essential to make the record effective to charge subsequent purchasers with notice. Green v. Garrington, 16 Ohio St. 548; Speer v. Evans, 47 Penn. St. 141. And the rule that priority of delivery to the recorder gives priority of lien is not affected by the fact that the supposed lien of a prior unrecorded mortgage is excepted from the covenants of warranty in a subsequent mortgage. Bercaw v. Cockerill, 20 Ohio St. 163. The function of the mortgage office and its record is to preserve mortgages, and it does not follow that a direction to record an act of donation in a book of donations creates and preserves a mortgage in favor of the donee, the wife. Mortgages, to be preserved and effective, as to third parties, must be registered in the books, and in the manner prescribed by the law for that purpose. Succession of Cordeviolle v. Dawson, 26 La. Ann. 534.

A lien for unpaid purchase-money attaches eo instanti upon a conveyance of lands, pursuant to an executory contract for their sale, and if a vendor at the time of the conveyance takes back a mortgage for such purchase-money, it is a part of an indivisible transaction, and the purchaser cannot give another lien which will take a priority to such mortgage. Dusenbury v. Hulbert, 59 N. Y. (14 Sick.) 541; Bolles v. Carli, 12 Minn. 113. And a purchase-money mortgage purposely destroyed before recording remains a valid and existing lien upon the lands as between the parties and all others claiming with notice; the destruction of the paper evidence does not annihilate the lien. Sloan v. Holcomb, 29 Mich. 153. Courts of equity, notwithstanding the recording act, will control and dispose of so much of the purchasemoney of land as remains unpaid, so as to protect a previous bona fide VOL. IV.-74

purchaser by an unrecorded mortgage, so far as this can be done without infringing upon the equitable rights of the subsequent purchaser or of third persons. Wynn v. Carter, 20 Wis. 107. A statutory provision that a mortgage by a vendee, to secure purchase-money, executed and delivered at the same time with the conveyance, shall be preferred to previous judgments against the vendee, applies only to a mortgage given to the vendor, and not to a mortgage given to a third party who has advanced the purchase money. Heuisler v. Nickum, 38 Md. 270. But it does apply to a mortgage given by a lessee for years to his lessor, simultaneously with the lease to secure future advances by the lessor. Ahern v. White, 39 Md. 409.

When a wife purchases real estate, pays the purchase-money, and enters into possession, but receives no deed of conveyance, her title is good as against a subsequent mortgagee. And it makes no difference whether the possession of the premises was the possession of the wife or husband. Humphrey v. Moore, 17 Iowa, 193. But where two mortgages of the same property, but to different mortgagees, were executed and delivered at the same time, each expressly stating that it was for part of the purchase-money, with the express understanding between the parties that they should be equal liens on the land, and neither entitled to priority over the other, but one is recorded prior to the other, and is afterward assigned to a bona fide purchaser without notice of the agreement, by force of the recording act such mortgage is entitled to priority in the hands of the assignee. Greene v. Deal, 4 Hun (N. Y.), 703.

When two or more mortgages are made simultaneously, and so connected with each other that they may be regarded as one transaction, they will be held to take effect in such order of priority and succession as shall best carry out the intention and secure the rights of all the parties. Pomeroy v. Latting, 15 Gray (Mass.), 435. So, of two mortgages executed at the same time to secure the payment of two notes maturing at different times, that is the prior lien which secures the payment of the note first falling due. Isett v. Lucas, 17 Iowa, 503. In Georgia two mortgages executed on the same day, though not at the same time of day, will share pro rata in the proceeds of the sale of the mortgaged property. Russell v. Carr, 38 Ga. 459. The recording of a deed absolute, made at the same time with a bond of defeasance, the latter not being recorded, is sufficient to affect a subsequent incumbrancer with notice of the transaction, and he cannot complain that the absolute conveyance on the record is shown to be only a mortgage which he is at liberty to redeem. Young v. Thompson, 2 Kan. 83. When a mortgage is taken to secure a pre-existing debt, the mort