
    HENRY DeFOREST WEEKS, as Administrator, etc., Appellant v. JOHN GARVEY, Impleaded, etc., Respondent.
    
      Subrogation to rights of mortgagee; as to right ofotvner of land conveying subject to his mortgage thereon to be so subrogated on his paying off the mortgage.
    
    Where one owning land on which he had given a mortgage to secure his bond conveys it to another subject to the mortgage, and subsequently pays off the mortgage, he is entitled to be subrogated to the right of the mortgagee as to the land as against the grantee, although the grantee did not assume the mortgage, and so also as against any subsequent grantees, other than himself, deriving title through his grantee although their conveyances did not in words convey subject to the mortgage ; but if his grantee re-convey to him, such said right of subrogation is thereby extinguished.
    A subsequent conveyance by him and agreement between him and that grantee, whereby he covenanted, on the happening of certain events, to convey to the son of that grantee (neither the conveyance nor the agreement^ referring in any manner to the mortgage), will not invest him with any right of subrogation upon his afterwards paying off the mortgage.
    Before Sedgwick, Ch. J., Truax and Dugro, JJ.
    
      Decided April 15, 1889.
    Appeal by plaintiff from judgment dismissing complaint entered on finding and conclusion of the court, in equity.
    The facts sufficiently appear in the opinion.
    
      George II. Forster., attorney, and Frederick P. Forster, of counsel for appellant, on the questions considered in the opinion, argued :—
    The plaintiff was entitled to be subrogated to the rights of the Dyckmans, the satisfaction should have been canceled, and the mortgage foreclosed.
    The plaintiff advertised for debts,—This bond and mortgage was presented as a valid claim against the estate. ° He paid it by mistake, out of the personal estate derived from the business of James Garvey, and not one cent of which appears to have come from this property. That mistake arose from the omission to record or give any. notice of the papers on which Joseph J. Garvey’s claim was based. The payment was made in April, 1878, and no claim was ever made until April, 1884, when the suit of Garvey v. Owens was begun. The alleged deed under which defendant Garvey claims was made December 14, 1869. For fifteen years he made no claim whatever on it, and not until nearly seven years from James Garvey’s death, and more than six from the payment of this mortgage, was a claim made.
    The defendant insists that he ought to have the benefit of this part of the personal estate of James Garvey, paid by mistake on what the administrator regarded as a just claim on the real estate, and the trial judge sustains this doctrine. On the contrary we submit that the principles clearly apparent from the authorities, demonstrate that, in equity, the plaintiff is entitled to the relief he asked here. Goodnow v. Stricker, 61 Iowa 261; Chapman v. Goodnow, 123 U. S. 543-5; Goodnow v. Moreton, 51 Iowa 555; Goodnow v. Litchfield, 67 Ib. 691; S. C., 63 Ib. 275; Goodnow v. Stricker, 62 Ib. 221; Barnes v. Mott, 64 N. Y. 397; Gans v. Thieme, 93 Ib. 225; Patterson v. Birdsall, 64 Ib. 295; Simpson v. Del Hoyo, 94 Ib. 194; Strusburgh v. Mayor, 87 Ib. 452; Allen v. Mayor, 4 E. D. Smith 404; Townsend v. Whitney, 75 N. Y 429-30 ; Cole v. Malcolm, 66 Ib. 366 ; Re Coster, 2 Johns. Ch. 503; Barnes v. Mott, 64 N. Y. 401; Hyde v. Tanner, 1 Barb. 84.
    
      George G. Genet, attorney, and of counsel for respondent, on the questions considered in the opinion, argued:—
    The bond and mortgage were James Garvey’s own debt and should have been paid by him, and was properly paid by his administrator. After the making of the bond and mortgage to Dyckman and in 1862 James Garvey conveyed this with other property, to one Morrison for a consideration of $40,000. The deed conveyed the property as subject to several mortgages but. covenanted that it was free and' clear of all taxes, incumbrances, etc., but the payment of none of the mortgages was assumed by Morrison. Thus Morrison’s property was security for James Garvey’s bond for the payment of which he was himself liable to Morrison. .Afterwards and in 1867 Morrison reconveyed this particular piece of property back to James Garvey, and covenanted that it was free from all taxes, incumbrances, etc. Afterwards, and on the 14th of December, 1867, James conveyed the property to John Garvey, without mentioning any mortgage, and the next day John made the agreement with James conveying it back to James in trust to collect the rents and pay himself $3,500, and after paying taxes, repairs and insurance, to convey the property to Joseph J. Garvey on his arriving of age in 1881, and to account to him for the rents and profits. “ Property covered by a mortgage is worth less by the amount of the mortgage.” “ Where defendant sold premises to plaintiff upon which there was a valid mortgage, of which fact the vendee, the plaintiff, was ignorant, Held the latter could maintain an action for false representations in the sale. The damages would be the mortgage and interest.” Krum v. Beach, 96 N. Y. 398.
   By the Court.—Sedgwick, Ch. J.

The question made by appellant on this appeal arises from the following facts. '

■ The plaintiff was the administrator of James Garvey, who died intestate. The intestate, at the time of his death, was in actual possession of a house and lot, which was incumbered by a mortgage made by him to secure his bond. He appeared from the record to have title. The administrator paid the bond and a satisfaction of the mortgage was made by the mortgagee. Afterwards the administrator ascertained that James Garvey had conveyed the property to Michael Morrison, subject, as expressed in the conveyance, to certain mortgages, of which the satisfied mortgage was one. Afterwards Morrison reconveyed the premises to James Garvey, the conveyance not alluding to the mortgage. Afterwards, according to the 6th finding, James Garvey conveyed to John Garvey. Then James and John made a sealed contract in which John reconveyed to James and James covenanted to convey to the son of John upon the happening of certain events. Neither the last conveyance nor the agreement contained any reference to the mortgage. For the purposes of this appeal it is not necessary to give any further details, excepting that in a suit, to which the plaintiff was not a party, the contract last referred to was enforced so that conveyance was made to John Garvey as the heir of his "son who had died.

On these facts the plaintiff claims that at the time he paid, in satisfaction of the mortgage, he was entitled to be subrogated to the rights of the mortgagee, as against the land, because he was a surety as to that land, the land having been conveyed by James Garvey subject to the mortgage, and that he having paid the mortgage in ignorance of the unrecorded conveyance to Morrison, his right of subrogation still exists.

My opinion is, that the claim cannot be sustained. Conceding that it was apparently the duty of the plaintiff as administrator to pay the bond and mortgage if the intestate had not conveyed the land, yet the reconveyance to the intestate annulled the rights that might have existed in him had he not reconveyed it.

A person buying subject to a mortgage buys an equity of redemption, and a purchaser of the equity redemption pays less, by legal intendment, than the value of the property as it would be, if unincumbered by the amount of the incumbrance. The grantee then has value reserved in his hands to be applied to the incumbrance. Cox v. Wheeler, 7 Paige 257; Vanderkemp v. Shelton, 11 Ib. 34. Such was the state of matters when the conveyance to Morrison was made.

If Morrison had conveyed to another than James Garvey, the grantee would have held the land subject to the equitable right to have the land applied to the mortgage, although the conveyance did not convey, in words, subject to the mortgage. Jumel v. Jumel, 7 Paige 594. The grantee being James Garvey, the mortgagor, he became repossessed of the fund or value which his grantor had formerly held and which was primarily to be applied to the mortgage. Moreover, he took a covenant against incumbrances from which the mortgage was not excepted. It was not mentioned in the deed to him as it had been in the deed by him. The reconveyance put him in possession of the indemnity that was provided in the deed to him.

The subsequent conveyances do not disclose any foundations for an equity like that claimed in the action.

Judgment affirmed with costs.

Truax and Dugro, JJ., concurred.  