Opinion
June 18, 1951.
In an action to foreclose a mortgage, appellants appeal from the judgment of foreclosure and sale which determines that their rights as contract vendees and their vendees' liens are subordinate to the lien of respondent's mortgage. Judgment reversed on the law and the facts and a new trial granted, with costs to appellants to abide the event. In our opinion the finding by the learned Justice at Special Term, as expressed in his opinion and implicit in the judgment, that plaintiff had no knowledge of appellants' rights or of circumstances from which such knowledge could be inferred, is contrary to the weight of the evidence. Although appellants' contracts were unrecorded, their vendees' liens were superior to the lien of plaintiff's mortgage, unless the mortgage was taken without notice, actual or constructive, of their rights. The evidence indicates that plaintiff had knowledge, when it took the mortgage, of facts sufficient to put it on inquiry as to the existence of rights in others in conflict with the interest which it was about to acquire. (Cf. Williamson v. Brown, 15 N.Y. 354.) Nolan, P.J., Carswell, Adel, Sneed and Wenzel, JJ., concur.