Cade v. Toler

• Decision Date: 09 December 1929
• Docket Number: 28066
• Citation: Cade v. Toler, 155 Miss. 606, 124 So. 793 (Miss. 1929)
• Court: Mississippi Supreme Court
• Parties: CADE v. TOLER

124 So. 793

155 Miss. 606

CADE v. TOLER

No. 28066

Supreme Court of Mississippi

December 9, 1929

Division B

1 MORTGAGES. Mortgage lien is not merged in legal title acquired by mortgagee, where he does not so intend.

Lien of mortgage is not merged in legal title acquired by mortgagee where it is his intention that it shall not so merge.

2 MORTGAGES. Mortgagee's intention to merge mortgage lien in legal title will be presumed to accord with his interest.

In absence of evidence, intention of mortgagee acquiring legal title, as to whether lien of mortgage is merged in legal title, will be presumed to accord with his interest.

3. MORTGAGES. No merger exists as against subsequent incumbrancers when mortgagor conveys to mortgagee, where it would be inequitable or parties expressly agree otherwise.

There is no merger of mortgage with legal title as against subsequent incumbrancers, when mortgagor conveys land to mortgagee, where it would be inequitable or where there is an express agreement of parties that lien of mortgage shall remain alive.

4. MORTGAGES. There is no merger where mortgagee acquires title when interest and situation of parties indicates no intention to let in junior lien ahead of mortgage.

There is no merger of lien of mortgage in legal title acquired by mortgagee, where interest and situation of parties clearly indicate that there is no intention to let in junior liens ahead of mortgage, even though mortgage is entered satisfied of record and secured notes are surrendered.

5. MORTGAGES. Sums junior lien holder expended in effort to amend his position could not be considered in determining whether first lien was merged in legal title.

Sums expended by junior lien holder in an effort to amend his position could not be considered in determining whether first lien was merged in legal title acquired by lien holder and his title subordinated to junior lien, where junior lien holder made expenditures with full knowledge at time of senior lien holder's rights.

HON. HARVEY MCGEHEE, Chancellor.

APPEAL from chancery court of Bolivar county, First district, HON. HARVEY MCGEHEE, Chancellor.

Suit by C. D. Toler against A. L. Cade. From a decree for complainant, defendant appeals, and complainant cross-appeals. Affirmed.

Affirmed.

Shands, Elmore & Causey and Somerville & Somerville, all of Cleveland, for appellant.

If the parties intended the trade or settlement as a full and final settlement of the debt, in other words a complete novation, then the mortgage cannot be reinstated; if on the other hand the "trade" was a mere change in the form of the debt, and there was no novation, then the mortgage could be revived. Here the debt was entirely satisfied, a complete novation occurred and the old debt was entirely destroyed.

New England Mortgage Security Co. v. Hirsch, 96 Ala. 232, 11 So. 63; Cumberland B. & L. Assn. v. McMullen (Tenn.), 54 S.W. 63; Workingmen's B. & S. Assn. v. Williams (Tenn.), 37 S.W. 1019; Howell v. Bush, 54 Miss. 437; Mead v. York, 6 N.Y. 449, 57 Am. Dec. 467; Bowman v. Manter, 33 N.H. 530, 66 Am. Dec. 743; Juzan v. Toulmin, 44 Am. Dec. 448; Ramoneda Bros. v. Loggins, 89 Miss. 225, 42 So. 669; Peacham v. Gurney (Iowa), 60 N.W. 187; Laselle v. Barnett (Ill.), 12 Am. Dec. 217.

J. O. Roberts, of Cleveland, and Louis C. Hallam, of Jackson, for appellee.

The lien of a mortgage is not merged in the legal title acquired by the mortgagee, where it is his intention that it shall not so merge, and, in the absence of evidence, his intention will be presumed to accord with his interest.

There is no merger of the mortgage as against subsequent incumbrances, when the mortgagor conveys the land to the mortgagee, when it would be inequitable or where there is an express agreement of the parties that the lien shall remain alive. Nor is there such merger when the interest and situation of the parties clearly indicate that there is no intention to let in subsequent liens ahead of the mortgage, even tho the satisfaction of the mortgage is entered of record, and the secured notes are surrendered.

Walker v. Goodsell, 54 Mo.App. 631, note to case of Fortham v. Deters, 99 A. S. R. 161, et seq.; Cohn v. Hoffman, 45 Ark. 376; Shattuck v. Belknap Savings Bank, 65 P. 643, 644; Stantons v. Thompson, 49 N.H. 272; Hanlon v. Doherty, 109 Ind. 37, 9, N.E. 782; Lowman v. Lowman, 118; Ill. 582, 9 N.E. 245; Coburn v. Stephens, 36 N.E. 132; Lowery v. Bowers, 80 Ind. 443; Moffett v. Farwell (Ill.), 78 N.E. 925; Smith v. Swarm (Iowa), 29 N.W. 402; Stimson v. Pease (Iowa), 5 N.W. 760; Cansler v. Sallie, 54 Miss. 446, 449.

OPINION

Anderson, J.

Appellee filed his bill against appellant in the chancery court of Bolivar county to revive a deed of trust which appellee held on forty acres of land in Bolivar county, described in the bill, and to have the deed of trust declared a prior and superior lien on the land, to a subsequent deed of trust on the same land held by appellant, and to enforce appellant's deed of trust against the land by foreclosure.

The cause was tried on amended bill, answer thereto, and proofs, resulting in a final decree in favor of appellee; from which decree appellant prosecutes this appeal.

The following are the controlling facts of the case, which facts were either undisputed in the evidence, or found to exist in the decree, which finding was based on sufficient evidence:

Appellee held a purchase-money deed of trust against the land involved to secure five thousand dollars, with interest. The indebtedness was evidenced by five purchase-money notes in equal amounts, payable in one, two, three, four, and five years. Appellant held a junior deed of trust on the land to secure the sum of three thousand dollars. H. E. Day owned the forty acres of land, and executed both these deeds of trust and the notes which the deeds of trust were given to secure. Some of appellee's notes were overdue and unpaid. Day wanted to avoid foreclosure, with the expense incident thereto, and was also anxious to settle the matter and be released from further liability on the notes.

Finally it was agreed between appellee and Day that the latter would pay to the former the sum of one thousand dollars cash, and give him a quitclaim deed to the forty acres of land in consideration of appellee's releasing Day from further liability on the notes, and surrendering to him the notes, but retaining the deed of trust in order to preserve his rights against the land. That agreement was accordingly carried out; Day paid to appellee the one thousand dollars; appellee canceled and surrendered to Day the five notes secured by the deed of...