Adirondack Hardware Co. v. Walsh

Van Kirk, J. But one question is left to be decided in this -case, and that- is -as to the priority between a mortgage and a judgment. The mortgage is dated May 26, 1910, acknowledged May 27, 1910, and recorded June 4, 1910, at eleven a.' m. The judgment was by confession; it is acknowledged May 27, 1910, and docketed May 28, 1910, at eight a. m. The confession of judgment was acknowledged and delivered before the mortgage was acknowledged and delivered. The rule is that an unrecorded deed or mortgage has preference over a judgment, unless there is a superior equity in favor of the judgment. Fowler Real Prop. Law (2d ed.), 756; Howells v. Hettrick, 160 N. Y. 308; Sweetland v. [595] Buell, 164 id. 247. In Obermeyer & Liebmann y. Jung, 51 App. Div. 247, it is held that a deed, executed in consideration of an existing debt due from the grantor to the grantee, takes precedence over a judgment against the grantor, docketed after the execution but before the recording of the deed. And it is held, within the meaning of the recording act, that the extension of time of a pre-existing debt constitutes a valuable consideration within the meaning of the recording act, and a creditor who gives a valid extension of time of payment of said debt and takes a mortgage for the same is a bona fide purchaser for a valuable consideration within the meaning of the act. O’Brien v. Fleckenstein, 180 N. Y. 350. So that, if there were no equities in the.case, it would have to be held thát the mortgage was a lien superior to the judgment, although recorded after the judgment was docketed. But, under the facts in this case, it does not seem to me that preference should be permitted, either to the judgment or to the mortgage. The mortgagor and judgment debtor owed various parties in Saranac Lake; he was evidently willing to secure his creditors; his real estate was his only property out of which to pay his debts. The judgment was confessed and the mortgage acknowledged upon the same day. The judgment creditor was the more diligent in entering his judgment. It does not appear that there was any reason why a confession of judgment was taken rather than a mortgage. Had a mortgage been taken in place of the judgment and the same been recorded at the time the judgment was docketed, the lien of that mortgage would have been superior to the lien of the plaintiff’s mortgage. There is nothing to indicate that the debtor intended to give a preference to either of the parties. Whether or not it may be said that there is a superior equity in favor of the judgment there is certainly an equal equity. Justice and equity require that they should be declared equal liens and that the proceeds of the property applicable thereto should be applied proportionately. Judgment accordingly.