SECOND DEPARTMENT, FEBRUARY TERM, 1875. (1 E. he acts at his own peril if he makes no inquiry. D. Smith, 154.) No greater estate or interest shall be construed to pass by any grant or conveyance than the grantor himself possessed at the delivery of the deed. (Rev. Stat., part 2, ch. 1, title 2, § 143.) James K. Averill and W. T. B. Milliken, for Polly Gray. The mortgage first recorded is presumptively the prior lien, and entitled to the surplus on a foreclosure and sale. (Freeman v. Schroeder, 29 How., 263; Freeman v. Schroeder, 43 Barb., 618; 1 R. S. [2d ed.], ch. 3, part 2, § 1, p. 707.) A notice, to supply the place of registry, must be more than barely sufficient to put the party on inquiry. (Tuttle v. Jackson, 6 Mead, 213; Jackson v. Van Valkenburgh, 8 Cow., 260; Jackson v. Post, 15 Mead, 588, and cases there cited; Grimstone v. Carter, 3 Paige, 421; Williamson v. Brown, 15 N. Y., 354; Beekman v. Frost, 18 Johns., 555; Dey v. Dunham, 2 Johns. Ch., 182.) It is well settled, that if one affected with notice convey to another without notice, the latter is as much protected as if no notice had ever existed. (Jackson v. Given, 8 Johns., 137.) The ground of the numerous decisions seems to be the actual fraud of the party in taking a second conveyance, and with knowledge of the first, and with intent to defeat it. (Dey v. Dunham, 2 Johns. Ch., 182; Jolland v. Stambridge, 3 Vesey, 478; Iline v. Dodd, 2 Atk., 287; approved, 8 Johns., 141; Jackson v. Van Valkenburgh, 8 Cow., 264; Beekman v. Frost, 18 Johns., 555; Jackson v. Davenport, 18 id., 300.) The presumption of notice which arises from proof of that degree of knowledge which will put a party upon inquiry, is not a presumption of law but of fact, and may therefore be controverted by evidence. (Supra, 15 N. Y., 354, 360; 1 Hill. on Morts., p. 594, quotes the case of Jones v. Smith, 1 Hare, 55.) "It is neither the purpose nor the office of the recording acts to charge the immediate parties with constructive notice of the precise contents of the instruments they execute, but to notify subsequent incumbrancers and purchasers of the rights such instruments are intended to secure." (Mead v. Bunn, 32 N. Y., 275.) BARNARD, P. J.: The Gray mortgage was first recorded, and, primarily, Mrs. Gray has the first lien by reason of priority of record. What has SECOND DEPARTMENT, FEBRUARY TERM, 1875. she done, whereby her mortgage is to be made subsequent to the Smith mortgage? That mortgage was first in date, was given for a good consideration, but was not recorded. Mrs. Gray had no actual notice of the Smith mortgage. In the deed from Wood to Trimble, there is this clause: "Subject, however, to two certain mortgages, now existing liens on said premises, amounting in the aggregate to the sum of $2,250." This deed is dated September, 1872. In October of the same year, Trimble conveyed to Richard E. Gray. Gray, in December, 1872, executed the mortgage to Polly Gray. There was but one mortgage on record when Mrs. Gray took her mortgage, and when Trimble sold to Richard Gray, the Crofut mortgage. Is that clause in the Trimble deed, notice of the Smith mortgage to Polly Gray? What notice is it? We assume that she searched and found a deed, dated three months before she took her mortgage, which recited that the property was then subject to two mortgages, amounting to $2,250. She searches and finds but one on the record. No name is given in the deed of the person by whom or to whom given. She takes her mortgage and records it. Is this evidence to be held sufficient to make her guilty of a fraud, as against the Smith mortgage, in recording her mortgage first? Was she bound to examine the Trimble deed at all? Must a person, about to take a mortgage, examine the deeds of the several grantees of the title about to be incumbered, to see if those deeds mention mortgages not recorded? If there be an obligation to examine the deeds, and they do recite the fact that, at its date, the title is subject to mortgages, is this to be notice of the continuance of such mortgages, as against the record. We think Mrs. Gray entitled to the surplus. Order affirmed, with costs. Present BARNARD, P. J., and DONOHUE, J. Order affirmed, with costs. SECOND DEPARTMENT, FEBRUARY TERM, 1875. HENRY WARREN LANCEY, RESPONDENT, v. JOSIAH G. CLARK, APPELLANT. Declarations of third person — when admissible — Accommodation paper. This action was brought by the plaintiff upon a promissory note, made by the defendant for the accommodation of Lambert & Lincoln, by whom the same was discounted, and the proceeds thereof received. Upon the last day.of grace, Lincoln, one of the firm, acting, as he claimed, as the agent of the plaintiff, and with money furnished by him, purchased the note, and caused the same to be protested. Upon the trial the defendant offered to prove declarations of Lincoln, showing that he knew the note was given for the accommodation of the firm, and that he had promised the defendant to pay the same at maturity, which evidence was excluded by the referee. Held, that its exclusion was error; that it was material as a part of the controversy, and in determining the credibility of Lincoln. APPEAL from a judgment in favor of the plaintiff, entered upon the report of a referee. This action was brought upon a promissory note made by the defendant to the order of one Frederick Lambert, which was indorsed by him, and by the firm of Lambert & Lincoln, of which he was a member. The note was discounted, and the proceeds received by the firm. On the last day of grace, Lincoln, one of the firm of Lambert & Lincoln, called at the bank and paid the note, telling the clerk that he wished to hold the maker and the indorser thereof. Upon the trial Lincoln claimed that in purchasing the note, he was acting as the agent of the plaintiff, and with his money. The defendant offered to prove that Lincoln knew the note was given for the accommodation of the firm, and that before its maturity he promised the defendant that he would pay the same. Upon the objection of the plaintiff this evidence was excluded. Cassedy & Brown, for the appellant. Thomas H. Hubbard, for the respondent. BARNARD, P. J.: We think the referee erred in excluding testimony going to show that George S. Lincoln, one of the firm of Lambert & Lincoln, SECOND DEPARTMENT, FEBRUARY TERM, 1875. knew that the note in question was lent by defendant to that firm for their accommodation, and that he, Lincoln, promised Clark to pay it at maturity. It is true that Lincoln was not a party to this action, and, as a general rule, conversations between parties, other than parties to the record, are inadmissible. It is also true, that the evidence offered was of a date anterior to the alleged connection of plaintiff with the note. The issue, however, to be tried, was, whether the note was paid by Lincoln. Clark had lent the firm the note, and had delivered it to Lambert. It was discounted, and the firm received the proceeds. Lincoln gave his check for the note at maturity, and did not state to the bank where he paid it, that he wanted to purchase it for any other person, but that he wished to hold the other indorsers. He denies, upon this trial, that he knew the note was loaned to the firm, and says he bought the note for plaintiff. It was a material fact, in determining the truth of a transaction which rests so much upon the testimony of Lincoln, whether he was to pay the note by agreement with Clark and his copartner Lincoln. He procured, he says, plaintiff to buy the note; he says he wrote plaintiff that the note was good, and yet that he wanted plaintiff to send money to take it up. If the additional fact were proven, that Lincoln agreed to pay the note himself at maturity, the referee may have found that the transaction was a different one from what he has found it to be. We think it was material, as a part of the controversy, and in determining the credibility of Lincoln, that the evidence should have been admitted. The judgment should be reversed, and a new trial granted at circuit, costs to abide event. Present- BARNARD, P. J., TAPPEN and DONOHUE, JJ. Ordered accordingly. SECOND DEPARTMENT, FEBRUARY TERM, 1875. THE KNICKERBOCKER LIFE INSURANCE COMPANY, RESPONDENT, v. CHARLES A. HILL, THOMAS IREMONGER, GEORGE IREMONGER AND OTHERS, APPELLANTS. Usury — purchaser on execution may attack previous usurious lien. A purchaser of property under an execution, may attack a previous usurious lien thereon. A declaration that the title to property is held in trust to secure costs, counsel fees and advances, made and incurred in suits concerning the premises, does not create a trust authorised by statute. APPEAL from a judgment of foreclosure and sale, in favor of the plaintiff, entered on the report of a referee. The action was brought to foreclose a mortgage executed to the plaintiff by the defendant Charles A. Hill. The defendants, Iremongers, had filed a notice of mechanics' lien against defendants, Hill and North. The lien had been foreclosed, and the premises sold and purchased by the attorney for the Iremongers, he executing the declaration of trust referred to in the opinion. The Iremongers set up the defense of usury in this action. John H. Bergen and Philip Reilly, for the appellants. H. W. Johnson, for the respondent. BARNARD, P. J.: I think the referee erred in excluding the proof offered to show usury on the mortgage given by Hill to plaintiff. The defendants (Iremongers) succeeded to Hill's estate, by virtue of the sale under their lien, judgment against North and the Hills. They may avoid, for usury, a mortgage claiming priority.* The cases are conflicting on this question, but it seems well settled, that a purchaser of property under an execution, may attack a previous usurious lien. The defendants (Iremongers) have such an estate as permits them to set up this defense. At the sale, Mr. Kuhn, who seems to have been their attorney, bid in the property * Thompson v. Van Vechten, 27 N. Y., 568; Mason v. Lord, 40 id., 476; Merchants' Ex. Bank v. Com. Warehouse Co., 49 id., 636. |