Ayer v. Philadelphia & Boston Face Brick Co.,

34 N.E. 177 (1893)

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Nature of the Case

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Facts

Waterman gave a mortgage to Boston to secure a payment of $40,000 three years from that date. It was promptly recorded. Two years later Waterman gave a mortgage, which later came into the hands of Ayer by assignment, to secure the payment of $40,000 three years from that date. It was recorded. The mortgage described the land as subject to a certain right of drainage, a certain easement, and the mortgage hereinafter named. Waterman also covenanted that the premises were free from encumbrances except a certain mortgage to Boston. Two years later Boston entered to foreclose on its mortgage and the premises were sold to Barstow. The deed to Barstow and the affidavit of sale were duly recorded Waterman was discharged in bankruptcy a year after the sale to Barstow. On October 26, 1877, Waterman purchased the land from Barstow through a mesne conveyance and the deed was recorded. On June 1, 1888, Waterman conveyed to William Waterman who executed a mortgage to Waterman and William conveyed to Philadelphia & Boston Face Brick Co. subject to the Waterman mortgage. Ayer (P) then sued Brick (D) to foreclose on its $40,000 mortgage given in 1874. In the first trial, it was determined that because of the clause to warrant and defend that Waterman was warranting that he would protect the second mortgage from the first. When Waterman reacquired title, the doctrine of estoppel by deed applied and Waterman's new title inured to the benefit of the second mortgagee. After losing the first case, D then raised Waterman's bankruptcy and its position as a BFP.