Fid. Union Title & Mortgage Guar. Co. v. Magnifico
| Decision Date | 29 September 1930 |
| Parties | FIDELITY UNION TITLE & MORTGAGE GUARANTY CO. v. MAGNIFICO et al. |
| Court | New Jersey Court of Chancery |
Syllabus by the Court.
In the absence of statutory regulation, priority of liens is to be governed ordinarily by the date of their acquisition.
Syllabus by the Court.
A purchase-money mortgage is a lien on the mortgaged lands prior to a previous judgment recovered against the mortgagor.
Syllabus by the Court.
The equity of redemption a vendee acquires by his deed is subject to the lien of a prior judgment against him, and such judgment has priority over a mortgage to secure future advances given by a vendee at the very time he acquires title.
Syllabus by the Court.
Where there are three incumbrances on the same land, the first of which is entitled to priority over the second, but is subordinate to the third, which is subordinate to the second, they will be marshaled as follows: The third, being for a sum less than the first, will take precedence and consume the first to that extent only; then the first for the amount due thereon, less the sum required to satisfy the third; then the second for its full amount; and finally the first for the balance due thereon.
Suit by the Fidelity Union Title & Mortgage Guaranty Company against Carmelo Magnifico and others to foreclose a mortgage. On exceptions to master's report determining priority of liens.
Exceptions dismissed.
Hood, Lafterty & Campbell, of Newark, for complainant.
Herman Greenstone, of Hackensack, for defendant Walker Cement Products, Inc.
Joseph W. Marini, of Cliffside, for defendant Tregger Co.
FIELDER, Vice Chancellor.
The defendant Walker Cement Products, Inc., recovered judgment April 25, 1929, in the Bergen circuit court against Carmelo Magnifico for $1,284.07. The nature of the debt for which judgment was rendered does not appear. By deed dated April 30, 1929, recorded May 14, 1929, the Tregger Company conveyed a vacant plot of land in Bergen county to Magnifico, the deed reciting that the conveyance was made subject to a first mortgage given to the Fidelity Union Title & Mortgage Guaranty Company for $7,500 and to a second mortgage given to the Tregger Company for $1,250, both of even date with the deed and to be recorded simultaneously therewith. Said two mortgages were executed by Magnifico and wife, both dated April 30, 1929, and recorded May 14, 1929; the one to the Fidelity Company reciting that it was given to secure part of the purchase price for the conveyance to Magnifico, and the one to Tregger Company reciting that it was subject to the Fidelity Company's mortgage and was given to secure part of the said purchase price.
The Fidelity Company filed a bill to foreclose its mortgage, making the Walker Company and the Tregger Company defendants and claiming priority over both. The master to whom it was referred to take an account and to report priorities found that the Fidelity Company had advanced on its mortgage $1,100 which paid part of the consideration for the conveyance to Magnifico, and that after recording its mortgage it had advanced from time to time the further total sum of $4,900 toward the construction of a new building on the mortgaged premises, and he reported the total sum of $6,000, with interest, due on the Fidelity Company's mortgage. He further reported that $1,250 secured by the Tregger Company's mortgage represented the balance of the purchase price due from Magnifico to that company for its conveyance, and that such sum, with interest, was due thereon, and that the full amount of the Walker Company's judgment $1,284.07 was due on that judgment. He further found and reported that the Fidelity Company's mortgage to the extent of $1,100 and the Tregger Company's mortgage to the full amount thereof were liens on the mortgaged premises, as purchase-money mortgages, prior to the lien of the Walker Company's judgment, and that the Walker Company's judgment was a lien prior to the balance of $4,900 due on the Fidelity Company's mortgage, and following the principle laid down in Hoag v. Sayre, 33 N. J. Eq. 552. he reported the order of priority as follows:
1. Fidelity Co., amount of mortgagf applied to purchase of mortgaged preinises
2. Walker Co., amount of judgmet
3. Fidelity Co., total advanced on its mortgage
Allowed as first lien
$1,100 00
Allowed for Walker Co. Judgment
1,284 07
2,384 07
4. Tregger Co., Amount of purchase-money mortgage
5. Fidelity Co., total advanced on its mortgage
Allowed as first lien
$1,100 00
Allowed as third lien
3,615 93
4,715 93
No objection is made to the amounts found due by the master, but exceptions were filed by the Fidelity Company as to the priorities, and the hearing came on before me on the master's report and exceptions thereto.
The master's findings are correct as to the priority of the Fidelity Company's mortgage for that part of its principal which was advanced for the purchase price and as to the Tregger Company's mortgage which secured the balance of the purchase price. By statute (as well as by general principles of equity) a purchase-money mortgage has a lien on the mortgaged land prior to any previous judgment recovered against the mortgagor (2 Comp. St. 1910, p. 1535, § 4), and such lien applies to a mortgage given to a third person who advances the purchase price (Lincoln Material Co. v. Goodwin Construction Co., 106 N. J. Eq. 326, 150 A. 829).
The Fidelity Company claims that the whole amount advanced on its mortgage is prior to the Walker Company's judgment its argument being that since the deed to Magnifico and his mortgage to the Fidelity Company were delivered at the same time and were in effect a single transaction, Magnifico had no estate until after the transaction was concluded, to which the lien of the Walker judgment could attach. In other words, Magnifico was merely a conduit for placing a mortgage on the land to the Fidelity Company, and therefore the only equity of redemption Magnifico had, to which the Walker judgment could attach, was that which remained...
To continue reading
Request your trial
-
Matter of Cliff's Ridge Skiing Corp.
...priority, exceeds the amount of "C"\'s claim, which, under its agreement, is to be first paid. Cf. Fidelity Union Title & Mort. Guar. Co. v. Magnifico, 106 N.J.Eq. 559, 151 A. 499 (1930) (intermediate judgment creditor maintains its position in relation to its original priority); Wayne Int'......
-
Holly Knitwear, Inc., Matter of
...387, 71 A.2d 228 (Ch.Div.1950); Vanderhoff v. Wasco, 109 N.J.Eq. 463, 158 A. 323 (Ch.1932); Fidelity Union Title & Mtg. Guar. Co. v. Magnifico, 106 N.J.Eq. 559, 151 A. 499 (Ch.1930) ; Meeker v. Warren, 66 N.J.Eq. 146, 57 A. 421 (Ch.1904); Andrus v. Burke, 61 N.J.Eq. 297, 48 A. 228 (Ch.1901)......
-
Grise v. White
...464--465, 52 N.W. 915, 18 L.R.A. 753. 457, 464--465, 52 N.W. 915, 18 L.R.A. 753. 445, 180 N.W. 703; Fidelity Union Title & Mtg. Guar. Co. v. Magnifico, 106 N.J.Eq. 559, 563--564, 151 A. 499. Somewhat analogous Federal cases reach a generally consistent result. See California State Dept. of ......
-
250 Bell Road, Lower Merion Tp., Montgomery County, In re
...cases.11 See, e. g., Wayne Int'l. Bldg. & Loan Ass'n. v. Moats, 149 Ind. 123, 48 N.E. 793 (1897); Fidelity Union Title & Mortgage Guar. Co. v. Magnifico, 106 N.J.Eq. 559, 151 A. 499 (Ch. 1930); Malmgren v. Phinney, 50 Minn. 457, 52 N.W. 915 (1892). But see n.3, supra.12 See, e. g., Samms v.......