Citizens' Nat. Bank v. Wert

• Decision Date: 23 November 1885
• Parties: CITIZENS' NAT. BANK v. WERT and others.
• Court: United States Circuit Court, District of Indiana

26 F. 294

CITIZENS' NAT. BANK v. WERT and others.

United States Circuit Court, D. Indiana.

November 23, 1885

Harris & Calkins, for complainant.

S. M Shepard, for defendants Wert.

McDonald Butler & Mason, for defendants Robertson & Perry.

WOODS J.

Bill and cross-bills to foreclose three mortgages by their respective owners. The first and more important question to be considered is one of subrogation, or rather of conventional substitution, and arises upon the following facts: The defendant Lilian E. Wert, in June, 1877, accepted a conveyance of real estate, subject to a mortgage to the Middlesex Banking Company, of Connecticut, for $500, which she assumed to pay, and at the same time executed to her vendor, Russell, a second mortgage for $400, balance of purchase money; and this mortgage, which was not recorded, is owned by the Citizens' National Bank. In April, 1879 Mrs. Wert made a third mortgage upon the same property to Robertson & Perry, partners, to secure the payment of two notes of her brother to R. & P., one for $340 and the other for $345, due, respectively, in two and three years from date. In April, 1882, the first-named mortgage had become due; and, being without means to pay it, Mrs. Wert applied to Edwin A. Wert, brother of her husband, and agreed with him that he should loan to her the money necessary to make the payment, and should hold and keep alive the mortgage as security for the repayment of the loan. Accordingly, Edwin A Wert furnished and paid the money to the agent of the mortgagee, who refused to assign the mortgage to said Edwin as requested, but executed upon the mortgage bond a receipt, of the tenor following:

'Received, May 15, 1882, of Lilian E. Wert, per Edwin A. Wert, $569.16, the full amount, principal and interest, taxes, insurance on this mortgage, all of which is paid for and at the request of Lilian E. Wert.

(Signed)

'M. E. VINTON & CO., 'Agents for Middlesex Banking Co.'

The banking company, by its agents, at the same time executed a formal release of the mortgage, to be put on record; but, instead of delivering it directly to Mrs. Wert, or to Edwin A. Wert, as they each desired and demanded, caused the same to be recorded. Upon learning this, Mrs. Wert and her husband, who had joined in the execution of the several mortgages made by her, executed and caused to be recorded a declaration and agreement, setting forth the facts in detail, to the effect that Edwin A. Wert was intended to be and should be subrogated to the rights of the banking company in the mortgage; and, in his cross-bill, said Edwin insists upon this right, and the master has allowed it.

On behalf of the holders of the junior liens, it is objected that this mortgage has been paid and canceled of record, and therefore cannot be revived to their injury. But the question is, not whether or not a paid and extinguished security shall be put upon...