The Chancellor.
The intention and effect of the stipulation between the solicitors'of the only two parties who have appeared in these causes, as I understand it, is, that the several matters stated or averred in the answer of Patrick to the original bill are to be taken as true, except so far as they are denied, put in issue or modified by the answer of Arnold to the cross bill; and that all the allegations and averments in the answer and further answer in the cross suit are to be taken as true. The facts of the case, therefore, so far as they are material to the determination of the rights of the several parties, are Substantially these: In the spring of 1825, Jonathan Ricketson, who was the owner of lot No. 15, in Thorp’s patent in the county of Clinton, contracted to sell ope undivided half thereof to Peter Keys, and the other half to George Ricketson, for $350 each. Keys’ half was paid for, and duly conveyed by J. Ricketson and wife to J. P. Hallock under some arrangement made between him and Keys, and the deed was regularly recorded. G. Ricketson went into and remained in possession of his half, and made improvements thereon, but did not pay the purchase money. In July, 1829, a judgment was entered up against him in favor of Patrick, on bond and warrant, for a debt previously due, amounting to about $1700. About a month after this judgment was entered, George Ricketson applied to Jonathan, who was at work in the field, to sign a deed for the premises, and brought with him a pen and ink and a deed filled up and his clerk to witness it; but Jonathan declined signing it until the purchase money was paid, with some other small claims, amounting in all to about $500, George said there were some men from the south waiting at his store who were ready and willing to let him have the money, and to sustain him in his business, as soon as they could see that he was to have a deed of the premises ; that the money- would be obtained upon showing them the deed, and that the deed [313]*313should riot be used or put in force until the money was paid to Jonathan. The latter, therefore, signed the deed and delivered the same to George, or his clerk, telling him it was not to be acknowledged or recorded until the purchase money was paid j and requesting the clerk to take notice that it was only delivered conditionally. George did not procure the money or return the deed, but went off the next day to the south, leaving his business in the hands of his agents and workmen. He having been gone some time, and it being apprehended that he did not mean to return, William Ricketson, a brother of Jonathan, and without any authority, for aught that appears, took possession of the premises, and continued the business in which George had been previously engaged. In October, 1829, Jonathan sold and conveyed the premises to William, and took back a mortgage for $900 for the purchase money, both of which were duly recorded. But by mistake in drawing this deed and mortgage the whole lot was included, instead of the undivided half thereof. In January, 1830, J, Ricketson sold and assigned the mortgage to Arnold, for the whole amount; $506,02 of which was paid in cash, and the residue credited on a pre-existing debt—J. Ricketson covenanting that the whole amount was justly due and was a valid lien upon the premises. In April# 1830, the deed of August, 1829, to George Ricketson was proved by the subscribing witness and recorded; and in July, 1830, Patrick caused the premises to be sold upon an execution on his judgment, and became himself the purchaser thereof, at a sum much less than the amount due him. Shortly after this sale, George made an arrangement with Howland Ricketson to purchase Patrick’s right to the premises under the sheriff’s sale. Howland then went into possession, and in November of the same year he purchased the premises for $800, and took an assignment of the bid, and gave back a mortgage to Patrick for the purchase money, payable in six annual payments, with interest. In July, 1831, Howland Ricketson, with the assent of George, sold the premises to S. Barker for $1500, with warranty, and took back from him a mortgage for $1109,67, the balance of the purchase money not paid down; which [314]*314deed and mortgage were duly recorded. It was verbally agreed between EL Ricketson and S. Barker that he might pay $800 of this mortgage directly to Patrick in satisfaction of his mortgage; and the times of payment were so regulated as to have that amount payable at the times when the payment on the mortgage to Patrick "would become due. After the time for redemption had elapsed, Patrick received a conveyance from the sheriff, and then executed a deed of confirmation, subject to his mortgage, for the purpose of carrying into full effect his sale to H. Ricketson. In November, 1831, H. Ricketson, through Barker, paid Patrick $189,34, for the first instalment on his mortgage ; and in November, 1832, Barker paid him the further sum of $180 thereon. The residue of Patrick’s mortgage" is still unpaid, for which he claims a preference over Arnold’s mortgage.
As both bills have been taken as confessed against all the parties except Arnold and Patrick, the only questions to be decided here are as to the priorities between the liens which- . Arnold and Patrick claim ; and the right of Arnold to a decree over against J. Ricketson upon his covenant of warranty, if his mortgage is not a lien upon the premises for the whole $900. From the facts stated in the answer of Arnold, in connection with those stated in the further answer as having -been-derived from the information of J. Ricketson subsequent to the assignment of the mortgage, which under the stipulation in this case must be taken to be correct, I am inclined to think that there was such a deliveryof the deed of August 1829 as was sufficient at law to pass the legal title to the premises in question ; subject however, in equity, to the payment of the unpaid purchase money. It is evident from the facts stated, that it must have been the intention of both parties that if the purchase money was paid the deed should take effect without any new delivery; as the grantee had, under the agreement of 1825, an unquestionable right to a conveyance of the premises upon payment of the amount due. Had this deed been entrusted to the clerk-merely, as an escrow, to be delivered to George upon con[315]*315dition that the purchase money was actually paid to the grantor within a certain prescribed time but not otherwise, the legal title would still have remained in the grantor, although the deed might have gotten into the hands of the grantee, with out a performance of the condition upon which it was to take effect. That does not appear to have been the case here; but the parties acted upon the erroneous supposition that the deed might be delivered to the grantee himself, upon the condition that it should not be proved and recorded if the purchase money was not paid, and that the legal title would not pass by such a delivery. The legal rule however is, as was insisted upon by the counsel for Patrick, that a deed or any other sealed instrument cannot be delivered to the grantee or obligee himself as an escrow, to take effect upon a condition not appearing upon the face of such deed or instrument ;
But in the view I have taken of this case it is not very material whether the legal title did or did not pass by the deed of August 1829, as the equitable rights of these parties are substantially the same in either case.
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The Chancellor.
The intention and effect of the stipulation between the solicitors'of the only two parties who have appeared in these causes, as I understand it, is, that the several matters stated or averred in the answer of Patrick to the original bill are to be taken as true, except so far as they are denied, put in issue or modified by the answer of Arnold to the cross bill; and that all the allegations and averments in the answer and further answer in the cross suit are to be taken as true. The facts of the case, therefore, so far as they are material to the determination of the rights of the several parties, are Substantially these: In the spring of 1825, Jonathan Ricketson, who was the owner of lot No. 15, in Thorp’s patent in the county of Clinton, contracted to sell ope undivided half thereof to Peter Keys, and the other half to George Ricketson, for $350 each. Keys’ half was paid for, and duly conveyed by J. Ricketson and wife to J. P. Hallock under some arrangement made between him and Keys, and the deed was regularly recorded. G. Ricketson went into and remained in possession of his half, and made improvements thereon, but did not pay the purchase money. In July, 1829, a judgment was entered up against him in favor of Patrick, on bond and warrant, for a debt previously due, amounting to about $1700. About a month after this judgment was entered, George Ricketson applied to Jonathan, who was at work in the field, to sign a deed for the premises, and brought with him a pen and ink and a deed filled up and his clerk to witness it; but Jonathan declined signing it until the purchase money was paid, with some other small claims, amounting in all to about $500, George said there were some men from the south waiting at his store who were ready and willing to let him have the money, and to sustain him in his business, as soon as they could see that he was to have a deed of the premises ; that the money- would be obtained upon showing them the deed, and that the deed [313]*313should riot be used or put in force until the money was paid to Jonathan. The latter, therefore, signed the deed and delivered the same to George, or his clerk, telling him it was not to be acknowledged or recorded until the purchase money was paid j and requesting the clerk to take notice that it was only delivered conditionally. George did not procure the money or return the deed, but went off the next day to the south, leaving his business in the hands of his agents and workmen. He having been gone some time, and it being apprehended that he did not mean to return, William Ricketson, a brother of Jonathan, and without any authority, for aught that appears, took possession of the premises, and continued the business in which George had been previously engaged. In October, 1829, Jonathan sold and conveyed the premises to William, and took back a mortgage for $900 for the purchase money, both of which were duly recorded. But by mistake in drawing this deed and mortgage the whole lot was included, instead of the undivided half thereof. In January, 1830, J, Ricketson sold and assigned the mortgage to Arnold, for the whole amount; $506,02 of which was paid in cash, and the residue credited on a pre-existing debt—J. Ricketson covenanting that the whole amount was justly due and was a valid lien upon the premises. In April# 1830, the deed of August, 1829, to George Ricketson was proved by the subscribing witness and recorded; and in July, 1830, Patrick caused the premises to be sold upon an execution on his judgment, and became himself the purchaser thereof, at a sum much less than the amount due him. Shortly after this sale, George made an arrangement with Howland Ricketson to purchase Patrick’s right to the premises under the sheriff’s sale. Howland then went into possession, and in November of the same year he purchased the premises for $800, and took an assignment of the bid, and gave back a mortgage to Patrick for the purchase money, payable in six annual payments, with interest. In July, 1831, Howland Ricketson, with the assent of George, sold the premises to S. Barker for $1500, with warranty, and took back from him a mortgage for $1109,67, the balance of the purchase money not paid down; which [314]*314deed and mortgage were duly recorded. It was verbally agreed between EL Ricketson and S. Barker that he might pay $800 of this mortgage directly to Patrick in satisfaction of his mortgage; and the times of payment were so regulated as to have that amount payable at the times when the payment on the mortgage to Patrick "would become due. After the time for redemption had elapsed, Patrick received a conveyance from the sheriff, and then executed a deed of confirmation, subject to his mortgage, for the purpose of carrying into full effect his sale to H. Ricketson. In November, 1831, H. Ricketson, through Barker, paid Patrick $189,34, for the first instalment on his mortgage ; and in November, 1832, Barker paid him the further sum of $180 thereon. The residue of Patrick’s mortgage" is still unpaid, for which he claims a preference over Arnold’s mortgage.
As both bills have been taken as confessed against all the parties except Arnold and Patrick, the only questions to be decided here are as to the priorities between the liens which- . Arnold and Patrick claim ; and the right of Arnold to a decree over against J. Ricketson upon his covenant of warranty, if his mortgage is not a lien upon the premises for the whole $900. From the facts stated in the answer of Arnold, in connection with those stated in the further answer as having -been-derived from the information of J. Ricketson subsequent to the assignment of the mortgage, which under the stipulation in this case must be taken to be correct, I am inclined to think that there was such a deliveryof the deed of August 1829 as was sufficient at law to pass the legal title to the premises in question ; subject however, in equity, to the payment of the unpaid purchase money. It is evident from the facts stated, that it must have been the intention of both parties that if the purchase money was paid the deed should take effect without any new delivery; as the grantee had, under the agreement of 1825, an unquestionable right to a conveyance of the premises upon payment of the amount due. Had this deed been entrusted to the clerk-merely, as an escrow, to be delivered to George upon con[315]*315dition that the purchase money was actually paid to the grantor within a certain prescribed time but not otherwise, the legal title would still have remained in the grantor, although the deed might have gotten into the hands of the grantee, with out a performance of the condition upon which it was to take effect. That does not appear to have been the case here; but the parties acted upon the erroneous supposition that the deed might be delivered to the grantee himself, upon the condition that it should not be proved and recorded if the purchase money was not paid, and that the legal title would not pass by such a delivery. The legal rule however is, as was insisted upon by the counsel for Patrick, that a deed or any other sealed instrument cannot be delivered to the grantee or obligee himself as an escrow, to take effect upon a condition not appearing upon the face of such deed or instrument ;
But in the view I have taken of this case it is not very material whether the legal title did or did not pass by the deed of August 1829, as the equitable rights of these parties are substantially the same in either case. If the legal title passed to George Ricketson by that conveyance, he took it subject to the equitable lien of the grantor for the unpaid purchase money, even if there had been no agreement to that effect as between the parties. (4 Kents Com. 2 ed. 151, &c.) Although a judgment is at law a general lien upon the legal estate of the debtor, it will in equity be so controlled as to protect the equitable rights of third persons against such legal lien, and also against purchasers under the judgment who are not entitled to protection, as bona fide purchasers without notice of the previous equitable claim. This was so held by Mr. Justice Thompson in the circuit' court of the United States for the southern district of NewYork, in the several cases of Lane and others v. Ludlow, adm’r, &c. in 1831, his manuscript opinion in which cases I [316]*316have seen ;(a) and it is now the settled law of this court. (See How’s case, 1 Paige’s Rep. 125 ; White v. Carpenter, 2 idem, 217 ; Veirsted v. Avery, 4 Idem, 9.) Even if Patrick had no notice of the circumstances attending the delivery of the deed, and that the purchase money was not paid, which is not alleged in his answer or pretended in this case, he is not entitled to claim protection as a bona fide purchaser ; as he bid in the property under his own judgment for an antecedent debt, paying no new consideration therefor. He therefore took the legal title under the sheriff’s sale subject to the equitable lien for the unpaid purchase money due to J. Richardson; which equitable right was vested in Arnold under the assignment of the mortgage. As William Richardson was in the actual possession of the premises at the time of the conveyance to him, and took the deed with the assent of George, the deed and mortgage were effectual to transfer the equitable interest to Arnold, as [317]*317such possession was not adverse to the claim of Jonathan. George went into possession under his contract merely, which was in subserviency to the legal title of the person from whom he purchased 5 and as there is no evidence that he ever attempted to set up the deed in opposition to the agreement upon which it was received, the continuance of such possession did not constitute such an adverse holding as to prevent a transfer of whatever interest Jonathan still retained in the land.
On the other hand, Arnold took the assignment of the mortgage subject to all the equities which existed against it in the hands of the assignor. He knew that a deed had been made out and was to have been delivered upon the payment of the purchase money. And although he supposed the deed had not been delivered so as to pass the legal title, it is not alleged in his answer, and probably could not be with truth, that he was ignorant of the fact that George [318]*318was entitled to a deed upon payment of the purchase money, according to the contract of 1825. At all events, the facts within his knowledge at the time he took the assignment were sufficient to put him upon inquiry as to what were the equitable rights of other parties in relation to the land. He therefore, as against this judgment creditor, acquired no greater interest in the land than J. Ricketson himself might have claimed as against George, under the contract of 1825. Under that contract George was in equity the owner of the land, subject to the vendor’s claim for the purchase money and interest. To that extent then and no further is Arnold entitled to priority over Patrick, who acquired the legal title under the sheriff’s sale. And if H. Rickertson, together with Barker, had put in an answer to the original bill, they might have insisted upon the residue of the proceeds of the sale of the mortgaged premises, if any, after paying the costs and this part of Arnold’s [319]*319claim, and the balance due on Patrick’s mortgage. But as they suffered that bill to be taken as confessed, which was an admission that they had no equity as against the whole of Arnold’s mortgage, their rights, as to the surplus, if they had any, are gone, except as to what may remain after satisfying both mortgages and the costs.
The decree must therefore direct, in the first place, after paying the master’s costs and disbursements on the sale, that the costs of both parties in this suit be paid rateably out of the proceeds of the mortgaged premises. Then the amount due to J. Ricketson at the date of his deed of the 30th of August, 1839, (that is $350 and the interest from the spring of 1835, say the middle of April, as the precise time of the contract does not appear in the pleadings,) must be ascertained ; and that sum, with interest thereon from the date of that deed, must be paid to Arnold in part satisfaction of his mortgage. The amount due on Patrick’s mortgage [320]*320with interest, after deducting the payments thereon as stated in the pleadings, must next be paid; and then the residue of Arnold’s mortgage. There must be a decree over against J. Ricketson, on his covenant of warranty, for the balance of Arnold’s mortgage if the same is not fully satisfied out of the proceeds of the sale. And the surplus of the proceeds of the sale, if any, is to be paid over to S. Barker. The decree is also to be without prejudice to the rights of Patrick, George and Howland Ricketson and S. Barker as between themselves in any future litigation, so far as their legal and equitable rights and claims are not provided for and satisfied by this disposition of the proceeds of the sale of the mortgaged premises. (a)
See Flagg v. Mann, 2 Sumner's Reports, 487.