In most states, if the purchaser of land, upon receiving a conveyance thereof, as a part of the same transaction executes a mortgage to the vendor to secure a part or the whole of the purchase price, such mortgage, to the extent to which it actually secures purchase money,63 is entitled to priority over any preexisting claims, which may be asserted in favor of another person against such land as the property of the purchaser.64 The vendor is under no obligation to examine the records to discover such claims,65 and as against such preexisting claims it is immaterial when he records his purchase money mortgage, since the prior claimant is not a subsequent purchaser within the protection of the recording laws.66 So the purchase money mortgage has been held to take priority over any mortgage executed by the purchaser before or simultaneously with the making of the conveyance to him,67 even though the latter mortgage was made to secure the repayment of money borrowed by the purchaser for the purpose of making a cash payment upon the purchase.68 The purchase money mortgage has likewise been given priority over an earlier judgment against the mortgagor,69 over a mechanic's lien arising under a contract with him for improvements on the property,70 and over any rights of dower,71 or homestead,72 in favor of the wife of the mortgagor.

130, 45 N. W. 696. See Chester v Greer, 5 Humph. (Tenn.) 26.

63. Dillon v. Byrne, 5 Cal. 455; Greeno v. Barnard, 18 Kan. 522; Roby v. Bismark Nat. Bank, 4 N. D 156, 50 Am. St. Rep. 633, 59 N. W. 719; New Jersey Building, Loan & Investment Co. v. Bachelor, 54 N. J. Eq. 600, 35 Atl. 745.

64. Hassell v. Hassell, 129 Ala. 326, 29 So. 695; Tolman v. Smith, 85 Cal. 280, 24 Pac. 743; Courson v. Walker, 94 Ga. 175, 21 S. E. 287; Austin v. Underwood, 37 111. 438, 87 Am. Dec. 254; Koon v. Tramel, 71 Iowa, 132, 32 N. W. 243; Ely v. Pingrey, 56 Kan. 17, 42 Pac. 330; Stewart v. Smith, 36 Minn. 82, 1 Am. St. Rep. 651, 30 N. W. 430; Wendler v. Lambeth, 163 Mo. 428, 63 S. W. 684; Turk v.

Funk, 68 Mo. 18, 30 Am. Rep. 771.

65. Ante, Sec. 567(e).

66. Elder v. Derby, 98 111. 228; Continental Investment & Loan Society v. Wood, 168 111. 421, 48 N. E. 221; Brown v. Witmeyer, 121 Ind. 83, 22 N. E. 975; Mc-Kecknie v. Hoskins, 37 Mich. 274; Schoch v. Birdsall, 48 Minn. 441. 51 N. W. 382; Protection Building & Loan Ass'n v. Knowles, 54 N. J. Eq. 519, 34 Atl. 1083, 55 N. J. Eq. 822, 41 Atl. 1116; Appeal of Williamsport Nat. Bank, 91 Pa. St. 163. Contra, semple, Koevenig v. Schmitz, 71 Iowa, 175, 32 N. W.

.320

67. Gould v. Wise, 97 Cal. 532, 32 Pac. 576, 33 Pac. 323; Elder v. Derby, 98 111. 228; Clark v.

This priority given to a purchase money mortgage appears to have its basis to a great extent in the equity and justice of requiring that one who has parted with his property on the strength of an agreement that payment of the price shall be secured upon the property shall have the first lien thereon.73 The reason occasionally asserted, that the mortgagee acquires a merely transitory seisin or title, it passing out of his hands at the same moment that it passes into them, cannot well apply in states in which a mortgage creates merely a lien on the land.

Brown, 3 Allen (Mass.) 509; Heffron v. Flanigan, 37 Mich. 274; Bolles v. Carli, 12 Minn. 113; Jacoby v. Crowe, 36 Minn. 93, 30 N. W. 441; Wendler v. Lambeth, 163 Mo. 428, 63 S. W. 684; Hinton v. Hicks, 156 N. C. 24, 71 S. E. 1C86.

68. Brower v. Witmeyer, 121 Ind. 83, 22 N. E. 975; Schoch v. Birdsall, 48 Minn. 441, 51 N. W. 382; Turk v. Funk, 68 Mo. 18, 30 Am. Rep. 771; Truesdale v. Bren-nan, 153 Mo. 600. 55 S. W. 147; Protection Building & Loan Ass'n v Knowles, 54 N. J. Eq. 519, 34 Atl. 1083, 55 N. J. Eq. 822, 41 Atl. 1116; Dusenbury v. Hulbert, 59 N. Y. 541; Boies v. Benham, 127 N. Y. 620, 14 L. R. A. 55, 28 N. E. 657; Jeans v. Hizer, 186 Pa. St. 523; United States v. New Orleans R. Co., 12 Wall. (U. S.) 362, 20 L. Ed. 434.

69. Courson v. Walker, 94 Ga. 175, 21 S. E. 287; Wehrheim v. Smith, 226 111. 346, 80 N. E. 908; Wendler v. Lambeth, 163 Mo. 428.

63 S. W. 684; Pope v. Mead, 99 N. Y. 201, 1 N. E. 671; Weil v. Casey, 125 N. C. 356, 74 Am. St. Rep. 644, 34 S. E. 506; Cake's Appeal, 23 Pa. St. 186, 62 Am. Dec. 328; Cowardin v. Anderson, 78 Va. 88.

70. Huber v. Diebold, 25 N. J. Eq. 170; Wilson v. Lubke, 176 Mo. 210, 98 Am. St. Rep. 503, 75 S. W. 602; Saunders v. Bennett, 160 Mass. 48, 39 Am. St. Rep. 456, 35 N. E. Ill; Rees v. Ludington, 13 Wis. 276, 80 Am. Dec. 741; Rochford v. Rochford, 188 Mass. 108, 108 Am. St. Rep. 465, 74 N. E 299; New Hampshire Sav. Bank v. Varner, 132 C. C. A. 631, 216 Fed. 721.

71. Ante, Sec. 211.

72. Allen v. Hawley, 66 111. 164; Amphlett v. Hibbard, 29 Mich. 298; Smith v. Lackor, 23 Minn. 454; Roby v. Bismark Nat. Bank, 4 N. D. 156, 50 Am. St. Rep. 633, 59 N. W. 719.

73. See 2 Pomeroy, Eq. Jur., J 725, note 5, and New Jersey B. L.

To what extent the priority of the purchase money mortgage as against a mortgage or other incumbrance previously created is dependent on the vendor's ignorance thereof at the time of taking his mortgage, docs not appear from the cases. While reference is not infrequently made to the fact that the vendor had neither actual or constructive notice of the previous incumbrance, there is at least one case74 in which such notice on his part is said to be immaterial, and this view would seem to accord with the general attitude of the courts as regards the preference to be accorded to a vendor on account of the unpaid purchase money.

As against claims subsequently arising, the purchase money mortgagee is in the same position as any other mortgagee, and must ordinarily record his mortgage in order to secure priority as against subsequent purchasers or, in some states, subsequent creditors.75

Not only is a mortgage executed in favor of the vendor for the purchase money given priority, but a mortgage in favor of a third person, given by the purchaser to secure money loaned to the latter by the former, to be used, and actually used, in payment for the property, is also given priority,76 provided the mortgage can be regarded as a part of the same transaction as the conveyance.77

& Inv. Co. v. Bachelor. 54 N. J. Eq. 600, 35 Atl. 745; Dusenbury v. Hurlbert, 59 N. Y. 54l; Trigg v. Vermillion. 113 Mo. 230, 20 S. W. 1047; Jackson v. Reid, 30 Kan. 10, 1 Pac. 308; Spring v. Shoot, 90 N. Y. 538; Stansell v. Roberts, 13 Ohio, 148.

74. Rogers v. Tucker, 94 Mo. 346, 7 S. W. 414.

75. Roane v. Baker, 120 III. 308, 11 N. E. 246; Protection Bldg. & Loan Ass'n v. Knowles, 54 N. J. Eq. 519, 34 Atl. 1083, 55 N. J. Eq.

822, 41 Atl. 1116; Quinnerly v. Quinnerly, 114 N. C. 145, 19 S. E. 99; Thorpe v. Helmer, 275 111. 86, 113 N. E. 954; Colonial Trust Co. v Sterchie Bros., 169 N. C. 21, 85 S. E. 40. But that an unrecorded purchase money mortgage takes precedence of a subsequent judgment in spite of the statute protecting creditors against unrecorded conveyances, see Charlottesville Hardware Co. v. Perkins, 118 Va. 34, 86 S. E. 869.

The conveyance of the land and the mortgage may be parts of the same transaction, so as to entitle the mortgage to protection as a purchase money mortgage, though there is an interval of several days between the dates of their execution.78-79 It is only necessary, it seems, that the mortgage should be agreed upon at the time of the delivery of the conveyance, and not be a mere "after thought."

In some states there is a statutory provision expressly giving priority to a purchase money mort76. Blevins v. Rogers, 32 Ark. 258; Western Tie & Timber Co. v. Campbell, 113 Ark. 570, Ann. Cas. 1916C, 943, 169 S. W. 253; Lassen v. Vance, 8 Cal. 271, 68 Am. Dec. 322; Missouri State Life Ins. Co. v. Barnes Const. Co., 147 Ga. 677, 95 S. E. 244 (semble); Austin v. Underwood, 37 111. 438; Magee v. Magee, 51 111. 500, 99 Am. Dec. 571; Laidley v. Aikin, 80 Iowa, 112, 20 Am. St. Rep. 408, 45 N. W. 384; Nichols v. Ove-racker, 16 Kan. 54; Warren Mortgage Co. v. Winters, 94 Kan. 615, 146 Pac. 1012; Clarke v. Munroe, 14 Mass. 351; Jacoby v. Crowe, 36 Minn. 93, 30 N. W. 441; Marin v. Knox, 117 Minn. 428, 40 L. R. A. (N. S.) 272, 136 N. W. 15; Bradley v. Bryan, 43 N. J. Eq. 396, and note; Franklin Soc. for Home Bldg. & Savings v. Thornton, 85 N. J. Eq. 525, 96 Atl. 921; Boies v. Benham, 127 N. Y. 620, 12 L. R. A. 452, 24 Am. St. Rep. 429, 27 N. E. 826; Moring v. Dicker-son, 85 N. C. 466. Compare Van purchaser or incumbrancer of whose rights he had notice at the time of making the advances.85 This view appears to accord in principle with the view ordinarily adopted that a mortgage, whatever the amount of the indebtedness which it purports to secure, operates to secure only the actual amount of the indebtedness.86 It is furthermore supported by the practical considerations that otherwise the mortgagor, though unable to demand advances from the mortgagee, would be unable to borrow on the property from another, by reason of the possibility that, after the making of a mortgage to the latter, the prior mortgagee might make advances to the mortgagor, which would take priority over the claim of such other. And furthermore the contrary view might to a considerable extent deprive one, who has made a mortgage for future advances, from subsequently alienating the property mortgaged, since no one would care to purchase property subject to a mortgage, the amount of which can not be ascertained at the time of the purchase.

Loben Sels v. Bunnell, 120 Cal. 680, 53 Pac. 266. Contra in Pennsylvania, unless the mortgage is made to a third person by arrangement with the vendor. Albright v. Lafayette Bldg. etc. Ass'n, 102 Pa. 411.

77. Cohn v. Hoffman, 50 Ark. 108; Magee v. Magee, 51 111. 500, 99 Am. Dec. 571; Small v. Stagg, 95 111. 39; Nicholson v. Aney, 127 Iowa, 278, 103 N. W. 201; Libbey v. Tidden, 192 Mass. 175, 7 Ann. Cas. 617, 78 N. E. 313; Hickson Lumber Co. v. Gay Lumber Co., 150 N. C. 282, 63 S. E. 1045 (semble).

78-79. Stewart v. Smith, 36 Minn. 82, 1 Am. St. Rep 651, 30 N W. 430; Marin v. Knox, 117 Minn. 428, 40 L. R. A. (N. S.) 272, 136 N. W. 15; Demeter v. Wilcox, 115 Mo. 634, 37 Am. St. Rep. 422, 22 S. W. 613; Spring v. Sbort, 90 N. Y. 538; Snyder's Appeal, 91 Pa. 477 (semble); Wheatley v. Calhoun, 12 Leigh (Va.) 264, 37 Am. Dec. 654; Sumgage as against a judgmenl previously recovered against the mortgagor. And this has usually been hold to apply to a mortgage to a third person as well as to the vendor.80