Citizens' State Bank of Ralston v. Petersen

• Decision Date: 15 October 1926
• Docket Number: No. 24277.,24277.
• Parties: CITIZENS' STATE BANK OF RALSTON v. PETERSEN ET AL.
• Court: Nebraska Supreme Court

114 Neb. 809

210 N.W. 278

CITIZENS' STATE BANK OF RALSTON

v.PETERSEN ET AL.

No. 24277.

Supreme Court of Nebraska.

Oct. 15, 1926.

Syllabus by the Court.

“Ordinarily, when one having a mortgage on real estate becomes the owner of the fee the former estate is merged in the latter.” Wyatt-Bullard Lumber Co. v. Bourke, 55 Neb. 9, 75 N. W. 241.

“But the mortgagee may in such case keep his mortgage alive when it is essential to his security against an intervening title. If there was no expression of his intention in relation to the matter at the time he acquired the equity of redemption, it will be presumed, in the absence of circumstances indicating a contrary purpose, that he intended to do that which would prove most advantageous to himself.” Wyatt-Bullard Lumber Co v. Bourke, 55 Neb. 9, 75 N. W. 241.

Evidence examined, and held that the taking of a deed to the mortgaged premises by C. F. Connolly, trustee, for the benefit of the plaintiff did not operate to cancel the plaintiff's mortgage.

Appeal from District Court, Sarpy County; Begley, Judge.

Action by the Citizens' State Bank of Ralston against Max Petersen and others to foreclose mortgage, in which the Farmers' & Merchants' Bank and another filed cross-petitions. From an adverse judgment, the cross-petitioners appeal. Affirmed.William R. Patrick, of Omaha, for appellants.

Crofoot, Fraser, Connolly & Stryker, of Omaha, for appellee Bank.

C. F. Connolly, of Omaha, for appellee Connolly.

Heard before MORRISSEY, C. J., and DEAN, DAY, GOOD, and THOMPSON, JJ.

DAY, J.

This action is brought by the Citizens' State Bank of Ralston to foreclose two mortgages for $5,000 and $4,000, respectively, executed by Max and Martha Petersen, covering 100 acres of specifically described land in Sarpy county, Nebraska. These two mortgages were subject to prior mortgage in favor of Adolph H. Voss. The Voss mortgage is not involved in this action.

The Farmers' & Merchants' Bank filed a cross-petition praying that its judgment against Max Petersen for $1,015.15, with interest thereon, be established as a lien upon the premises paramount to the plaintiff's mortgages. H. L. Gearhart also filed a cross-petition in which he prayed his materialman's lien be decreed a prior lien to the mortgage of the plaintiff.

The court found that the Voss mortgage for $7,500, dated February 13, 1918, was a first lien upon the land in question. The court also found that the plaintiff's mortgage for $5,000, dated April 5, 1919, and recorded November 17, 1919, upon which there was due $6,239.64, was a second lien upon the premises, and that the judgment of the Farmers' & Merchants' Bank for $1,015.15, recovered October 8, 1921, in the district court for Sarpy county against Max Petersen, with interest and costs amounting to $1,284.58, was a third lien; that the plaintiff's mortgage for $4,000, dated December 10, 1921, and recorded December 24, 1921, with interest aggregating $4,964.46, was a fourth lien, and that the lien of H. L. Gearhart for $482.37, recorded May 5, 1922, with interest totaling $565.17, was a fifth lien.

Upon these findings the court foreclosed the plaintiff's mortgages and established liens of the respective parties for the amounts and in the priorities as above stated. The court also made an order of accounting of the proceeds of the sale of the premises based upon the possession of the plaintiff of the mortgaged premises. From this judgment the Farmers' & Merchants' Bank and Gearhart have appealed.

It appears that Max and Martha Petersen conveyed the land in question to C. F. Connolly, trustee, on February 27, 1923, in consideration of the payment to them of $1,000 and the release of certain personal property from the lien of a chattel mortgage held by the plaintiff, and thereupon the Petersens surrendered possession of the premises to Connolly, trustee. The record shows that in taking the deed Connolly was trustee for the plaintiff. The main point urged by the appellant is that the deed to Connolly, trustee, was in effect a deed to the plaintiff of the land in question; that, by thus obtaining the legal title, the plaintiff's equitable title created by its mortgages became merged in the legal title and canceled the mortgage liens, thus giving the appellants a prior lien over the plaintiff's mortgages.

[1][2] Assuming, but not deciding, that the deed to Connolly, trustee, was equivalent to a deed direct to the plaintiff, it...