
    John A. Wilson, Resp’t, v. George Drake Smith & Co. et al., Impleaded, etc., App’lts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed March 29, 1889.)
    
    Deed—Covenant against incumbrances—When not affecting gbantor.
    The plaintiff being the owner of certain premises, sold the same to the-defendants, James and Charles Willoughby, the latter executing a mortgage thereon to the plaintiff to secure a portion of the purchase money. The deed contained a covenant of title, and that the premises were free and clear of all incumbrances. It was agreed and understood between the-parties that the plaintiff should convey the property to the mortgagors and receive the mortgage executed and delivered to him as security for its purchase price, and an advance of money made by him to them, and it was to carry out this agreement that the mortgage and deed were afterwardsexecuted and delivered. The defendants, Smith & Co., advanced certain money to the mortgagors, for which judgments were confessed by the latter. In an action to foreclose by the plaintiff, these judgments were relied upon as being prior liens to the plaintiff’s mortgage upon the property. Held, that the covenants in the deed against incumbrances are not to be construed, and were not intended to exclude or supersede the plaintiff’s, mortgage. Following Judd v. Seekins, 62 N. Y., 266.
    Appeal from a judgment recovered at the special term.
    
      S. F. Kneeland, for app’lts; James F. Higgins, for resp’t.
   Daniels, J.

—The judgment- recovered is for the foreclosure of a mortgage executed by the defendants, James A. Willoughby and Charles Willoughby, to the plaintiff to-secure the sum of $1,000 with interest. The property described in the mortgage was a certain factory with the machinery and improvements contained therein, lying and. being at Fordham, in the city and county of New York, and known and designated on a certain map of property at Fordham, by numbers 483 and 484, on the easterly side of Hoffman street, 183 feet south of Pelham avenue. The building is then stated to cover two lots, owned by John A. Wilson, and the mortgage to be given to secure the payment of a part, or portion of the purchase money, for-the premises and the machinery.

The title to these two lotsfwas in the plaintiff when the-mortgage was executed and delivered to him, and after that time, and over a year subsequent to the record of the mortgage, the plaintiff executed and delivered to James A. Willoughby one of the mortgagors, a conveyance of this property, and in the conveyance covenanted that he was lawfully seized of an absolute and indefeasible estate of inheritance, in fee simple of the premises conveyed, and that the same, were free and clear of incumbrances, grants, titles, charges,, estates, judgments, taxes and assessments, and this was followed by a covenant for quiet possession.

• The appellant George Drake Smith & Company, Limited, advanced money to the mortgagors for which judgments were confessed by them; and these judgments, under the circumstances, were relied upon as being prior liens upon the property, to the plaintiff’s mortgage. But it appeared "by the proof that the agreement and understanding of the ■parties was that the plaintiff should convey this property to the mortgagors and receive the mortgage executed and delivered to him, as security for its purchase price, and the advance of money made' by him to them, and it was to carry ■out this understanding that both the mortgage and the deed were afterwards executed and delivered. When the mortgage was made, the title of the plaintiff to the property was .recognized and conceded in it. And while the language contained in the deed was very broad as to the title and incumbrances upon the property, it is not to be construed, and was not intended, to exclude or supersede this mortgage which was given to secure their obligations to the plaintiff. These features of the case place it within the decision which was made in Judd v. Seekins, 3d N. Y. Supreme Court, 266, affirmed, 62 N. Y., 266, sustaining the validity of the mortgage. The judgment creditor endeavored to avoid this effect by evidence stating the fact to be that the plaintiff had informed its officers, before its indebtedness was created, that he had put the money into the business which he had advanced to the firm of Willoughby & Willoughby, ■ and that it was at the risk of • that business. A statement of the condition of the business not including the mortgage, or. the mortgage debt, was made by the firm, and presented to the creditor, and upon that, the testimony of the officers of the company tended to prove that their money was advanced and the indebtedness to them was created and that this statement was approved and sanctioned by the plaintiff as a correct statement of the affairs of the debtors. The evidence of two witnesses was given to establish this defense, and in that manner to avoid the effect of the mortgage as a ■preceding incumbrance upon the property; but it was met by the positive testimony of the plaintiff denying that he had made either of the statements relied upon for this •object.

And in his denial he was corroborated by the testimony of the witness Willoughby, one of the mortgagors. This' created nearly an even balanced contention in the oral testimony given upon the trial, and the probability of its truth was in some degree at least increased by the fact that the plaintiff held the mortgage, and in no manner stipulated to surrender or postpone it, and in no way became a party to the statement of the financial condition of the debtors, as that was made out and presented by them to the company recovering the judgments.

The court accordingly having the witnesses before it, was in a condition intelligently to judge and determine whether or not the defense had in this manner been made out.

That determination was adverse to the judgment creditor, and depending upon this state of the evidence, it certainly cannot be held to be unsupported by the proof, especially as it is not certified that all the evidence which was given was inserted or contained in the case. Porter v. Smith, 35 Hun, 118. Exceptions were taken to rulings made concerning the admission of evidence, but neither of them appears for any cause to be well sustained. The evidence which was received was admissible to prove the agreement and understanding which resulted in the execution of the mortgage and the delivery of the deed.

No error of any substantial nature has been disclosed by the proceedings upon the trial and the judgment should be affirmed, with costs.

Van Brunt, Oh. J., and Brady, J., concur.  