Straman v. Rechtine
| Decision Date | 07 June 1898 |
| Citation | 51 N.E. 44,58 Ohio St. 443 |
| Parties | STRAMAN v. RECHTINE et al. |
| Court | Ohio Supreme Court |
Error to circuit court, Putnam county.
Petition by John H. Straman, administrator, against Elizabeth Rechtine and others, to sell lands. The decree rendered was affirmed by the circuit court, and plaintiff brings error. Reversed.
Anton Rechtine, being the owner of 60 acres of land in Putnam county, executed and delivered his mortgage deed (his wife joining with him) to the Northwestern Mutual Life Insurance Company, of Milwaukee, Wis., of the date of April 26, 1889 for the sum of $1,600, which mortgage was duly recorded. Afterwards, on the 21st day of June, 1889, he and his wife undertook to execute and deliver their mortgage deed of that date to Mary H. Moe for the sum of $500, which was also duly recorded, but by mistake the notary public failed to certify that Anton Rechtine had signed and acknowledged the said mortgage, and that the same was his free act and deed; but the acknowledgment of his wife was duly certified by the notary. Thereafter, on the 16th day of January, 1894, Anton Rechtine died intestate, leaving Elizabeth Rechtine, his widow, and four sons and three daughters, all of full age his only heirs at law. The widow and six children conveyed the lands by deed to Ferdinand Rechtine, one of the sons, he agreeing to support his mother during her lifeime, and to pay his brothers and sisters certain sums after her death. About a year after the death of the intestate, John H. Straman was duly appointed administrator of his estate, and in April 1895, filed his petition in the court of common pleas of Putnam county to sell the 60 acres of land of which Anton Rechtine died seised. After the conveyance to Ferdinand, and before the appointment of the administrator, the insurance company began to clamor for the payment of the money then due on its mortgage, and threatened foreclosure. Thereupon Ferdinand borrowed $1,600 from William F. Brunning, with which money he paid off the mortgage held by the insurance company, and procured the same to be released of record, and stated to Mr. Brunning that there were no debts of the estate unpaid, and no further liens upon the lands, except the mortgage of $500 to Mrs. Moe; and he procured Mrs. Moe to release her mortgage of record, and take a new mortgage from him (Ferdinand) for the same sum on the same lands subsequent to the mortgage given to Mr. Brunning, and for the sole purpose of allowing the Brunning mortgage to be the first lien. So that, as Mr. Brunning understood and believed his mortgage for $1,600 was the first and best lien on the lands. Mr. Brunning, being made a defendant to the petition of the administrator to sell lands, filed his answer and cross petition, giving a minute and detailed statement of the facts as above given, and prayed to be subrogated to the lien and rights which the insurance company had in its mortgage before its release, and that the release of that mortgage might be set aside, and the full force and effect of the mortgage restored for his protection. Mrs. Moe was also made a party defendant, and in her cross petition stated the facts as to her mortgage, and prayed that the old released mortgage be reformed and corrected so as to have the certificate of the notary public show a due execution and acknowledgment of the mortgage made to her by Anton Rechtine and wife, and that the release of the same be set aside, and the full force and effect of the mortgage, when reformed, restored for her protection. The administrator averred in his petition that the widow was entitled to dower in the lands, and prayed that it be set off and assigned to her or her assigns; and the widow, by answer and cross petition, prayed that the deed of conveyance be set aside, and that dower be assigned to her. The case was tried upon the issues made in the pleadings, the testimony, and the argument of counsel, and the court made no separate findings of fact, but found generally that the facts stated in the said cross petitons of Mr. Brunning, Mrs. Moe, and the widow were true, and gave judgment that the lands be sold by the administrator according to law; that Mr. Brunning be subrogated to the lien of the insurance company, and have the first and best lien; that the mortgage of Mrs. Moe be reformed as prayed for, and be the second lien; and that the value of the widow's dower in the lands be ascertained, and paid to her in money next after the payment of the two mortgages; and for the payment of taxes, costs, etc. The administrator filed motions for a new trial, one ground being that the findings, orders, judgment, and decree are each and all contrary to law. The motions for a new trial were overruled, and exceptions taken. The circuit court affirmed the judgment. Thereupon the administrator filed his petition in this court, seeking to reverse the judgments of both the circuit court and the court of common pleas.
1. Where money is loaned under an agreement that it shall be used in the payment of a lien on real estate, and it is so used, and the agreement is that the one who so loans the money shall have a first mortgage lien on the same lands to secure his money, and through some defect in the new mortgage, or oversight as to other liens, the money cannot be made on the last mortgage, the mortgagee has a right to be subrogated to the lien which was paid by the money so by him loaned, when it can be done without placing greater burdens upon the intervening lienholders than they would have borne if the old mortgage had not been released, but not as against a bona fide lienholder who acquired his lien after the release of the old mortgage, without notice of such agreement and payment.
2. R having made a mortgage on his real estate to an insurance company, his heir, after his death, borrowed money from B., and paid the mortgage money to the insurance company, and gave B. a mortgage on the same lands to secure his money. In borrowing the money, the heir assured B. that the money should be used to pay the insurance company's mortgage, and it was so used. The heir also assured B. that all the debts of his father had been paid, and that there were no other liens upon the lands, which B. believed to be true. Other debts of R. having come to light, an administrator was appointed on his estate, who filed a petition to sell said lands to pay debts. Held, that B. is entitled to be subrogated to the mortgage of the insurance company, and to have the release thereof set aside for his benefit and protection.
3. R. and wife made a mortgage to M., and duly acknowledged the same before a notary public, who duly certified the acknowledgment of the wife, but by mistake omitted to certify the acknowledgment of the husband, and, R. having died intestate and insolvent before the mistake was discovered, and M. having, after the death of R., accepted a new mortgage for her debt from the heir, and released the mortgage from R. and wife, to enable the heir to give a first mortgage to another party for borrowed money, and an administrator on the estate of R. having thereafter been appointed, who filed a petition to sell the lands to pay the debts of R., held, that M. was entitled to have her mortgage reformed as to R., and to have the release thereof on the record set aside; but that said mortgage, when so reformed, is subject to the lien of general creditors of R. on the lands, and does not have priority over them. Held, further, that such mortgage is a valid charge in equity upon the dower interest of the widow in said lands, and that the balance due on the debt to M. after receiving her dividend as a general creditor from the administrator should be paid out of the money value of the dower of the widow of R., and the remainder of such money value should be paid over to such widow.
George Fritz, for plaintiff in error.
Watts & Moore, for defendant in error William F. Brunning.
Bailey & Beiley and Handy & Ogden, for defendant in error Mrs. Moe's administrator.
BURKET, J. (after stating the facts).
It is urged by plaintiff in error that Mr. Brunning has no right to be subrogated to the lien which the mortgage to the insurance company had before its release of record. The material facts contained in the cross petition of Mr. Brunning, and found to be true by the court of common pleas, are that after the death of Anton Rechtine, and after his debts had become liens upon his real estate in favor of his creditors, and after his son Ferdinand had received a conveyance of the lands from the widow and children, subject to the mortgage liens, the insurance company urged payment of its mortgage, and threatened foreclosure; that Ferdinand Rechtine thereupon requested Mr. Brunning to loan him $1,600 with which to pay off the insurance company's mortgage and agreed to give Mr. Brunning a first mortgage on the same lands to secure the loan, and assured him that all of his father's debts had been paid, and that there was no other lien upon the lands, except the mortgage to Mrs. Moe for $500, and he agreed to obtain a release of that mortgage so that the mortgage to Mr. Brunning should be the first and best lien. Mr. Brunning agreed to these terms, and made the loan of $1,600 to Ferdinand Rechtine, and the mortgage to the insurance company was paid off with the money, and was released of record. A mortgage for the $1,600 was then made by Ferdinand Rechtine to Mr. Brunning on the same lands, and was duly recorded, the mortgage to Mrs. Moe being released of record, so that Mr. Brunning, as he understood and believed, had the first lien on the lands. Afterwards it was ascertained that the debts owing by Anton Rechtine at his death, and which were a lien on those same lands, had not been...
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