Case Name: Kuhns v. McGeah
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1882-01
Citations: 38 Ohio St. 468
Docket Number: 
Parties: Kuhns v. McGeah.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 38
Pages: 468–473

Head Matter:
Kuhns v. McGeah.
One who purchases land, receiving a deed of general warranty, without knowledge of a mortgage theretofore made by his grantor, but which mortgage was duly recorded, acquires no greater estate than an equity of redemption, notwithstanding the fact that the mortgagee, from time to time, for a valuable consideration, after the purchase, extended the time of payment of the debt secured until the mortgagor became insolvent.
Error to the District Court of EranMin county.
The original suit was brought in the common pleas court of EranMin county by Matilda S. McGeah to foreclose a mortgage upon a lot of land in the city of Columbus, made by William J. Kuhns to secure a loan of $2,100, payable in one year. The cause was appealed to the district court, and upon trial there, the plaintiff obtained a judgment of foreclosure and order of sale of the mortgaged premises. To reverse this judgment the proceeding before us was instituted. The bill of exceptions taken at the trial contains the agreed statement of facts, which was the only evidence offered, and which is as follows:
“ It is agreed, That William J. Kuhns, on the 24th day of May, a.d. 1868, borrowed of the plaintiff the sum of $2,100 and executed therefor his said note, for $2,100 payable in one year, and also his two notes of $105 each, one payable in six months, and the other in twelve months, as interest, at the rate of ten per cent., on the principal sum so borrowed; and at the same time executed his said mortgage on the said premises described in the petition, which was duly recorded, to secure the payment of said notes. Said interest notes were duly paid, and, at the expiration of the year, the payment of the principal was extended for another year at ten per cent, interest, which interest, at that rate, was duly paid.
“ On the 24th day of May, 1870, the said note was again extended for another year, at twelve per cent, interest, which interest was also duly paid, and the note was then extended to November 24, 1872, at ten per cent, interest per annum, and this interest was also paid.
“ On the 24th day of November, 1872, said note was again extended for one year, at the rate of eleven per cent, per annum; this interest was also paid. About this time, or before, a new note of same date was given for the principal sum, to wit, $2,100; and the old note, the back of which had become covered with indorsements, was for that reason given up. Erom November 24,1873, to May 24, 1876, payment of said note was, by agreement between plaintiff and said William J. Kuhns, extended from year to year, and interest at the rate of twelve per cent, for that time was paid.
“ On the 24th day of November, 1876, an extension for another year was agreed upon at ten per cent, interest, and said “William J. Kuhns gave his three notes for interest at the rate of ten per cent., one payable in four months with interest, for $105, being interest then due at ten per cent., and one payable in six months, for $105, and the other payable in twelve months, for $105. These three notes remained unpaid, and are produced in court. Neither of the defendants, Augustus Kuhns or Henry Mithoff, had any knowledge or notice of any said extensions.
“ On the 19th day of February, A. d. 1869, said William J. Kuhns sold and conveyed by deed, with covenants against incumbrances, and of general warranty, the said premises so mortgaged, to the defendant, Augustus Kuhns, for a full and valuable consideration, and without actual notice to said vendee of said mortgage.
“ On the 29th day of March, a. d. 1873, Augustus Kuhns sold and conveyed by deed with covenants against incumbrances, and of general warranty, said premises, for a valuable consideration, to defendant, Henry Mithoff, who had not actual notice of the existence of said mortgage.
“ The plaintiff, during the year 1870, had notice of the said sale of said premises by William J. Kuhns, to Augustus Kuhns, and after said sale, and notice thereof, extended the time for the payment of said indebtedness, for a valuable consideration. The said William J. Kuhns, at the time the said note matured, and at the time he sold said premises, was solvent, but is insolvent now, and was at the time this action was brought; and he was solvent at the times, and after the plaintiff, with knowledge of said sale of said premises, extended the .times for the payment of said note.”
Jones da Jones and Hoffman dt Hoffman, for plaintiff in .error:
By the agreed statement of facts in this case, it appears that the defendant in error, having knowledge of the fact that her mortgagor had sold the mortgaged pi’emises for a full and valuable consideration ; having knowledge of the fact that her mortgagor’s vendees had no actual notice of her mortgage, and were resting securely in the belief that they were in the possession of a perfect unincumbered title; and having knowledge of the fact that her mortgagor was solvent, and therefore able .to save his vendees harmless against loss on account of said mortgage, extended the payment of said mortgage, from time to time, upon usurious considerations, until her mortgagor became insolvent.
The mortgagor of defendant in error, becoming unable longer to meet her usurious exactions, she instituted proceedings in the court below, to foreclose ber mortgage.
We claim that the extension of the time of payment of the mortgage, upon unconscionable and usurious considerations, made in the full knowledge that lier mortgagor’s vendees had paid full value for the premises, and that they were without knowledge of the existence of .any defects in their title, until the time arrived when the covenants of their grantor became worthless, was an act of bad faith on the part of defendant in error, amounting to fraud in law. Story’s Eq. § 333; Watkins v. Hill, 8 Pick. 522; Fry v. Shehee, 55 Ga. 208.
George J. Atkmson for defendant in error:
The mortgagee’s security cannot be affected by any dealrngg. of the mortgagor with other parties. Robinson v. Urquehart, 1 Beas. (N. J.) 515; Strachn v. Foss, 42 N. H. 43.
As to the extension of time of payment of said indebtedness until the mortgagor became insolvent, we would respectfully refer the court to the following :
“ The extension of time of payment of a mortgage in no.way impairs the security as against subsequent incumbrances,, even if this be effected by a renewal of the mortgage note.?’’ Jones on Mortgages, §924, and cases there citecL
To the same effect are the following cases ; Bank of Utica v. Fink, 3 Barb. Ch. 293; Whitacre v. Fuller, 5 Minn. 508; Cleveland v. Martin, 2 Head (Tenn.) 128; Pomroy v. Rice, 16 Pick. 22; Watkins v. Hill, 8 Pick. 522; Davis v. Maynard, 9 Mass. 242; Hadlock v. Bulfinch, 31 Maine, 246; Strachn v. Foss, 42 N. H. 43; Robinson v. Unquehart, 1 Beas. (N. J.) 515.
The claim made by plaintiff in error would nullify the registry laws of our state.

Opinion:
Lonqworth, J.
The fact that the purchaser of the land in question had no knowledge of the existence of the mortgage, which had been duly recorded, cannot affect the estate which he took by the deed made tó him. That estate was an equity of redemption only. It could be no greater estate for the reason that the grantor had no greater estate to convey. It is claimed, however, that the taking up of the old notes and giving others was a payment and satisfaction of the indebtedness, as respects the rights of the mortgagee, at least in so far as it was secured by the mortgage ; but the law is well settled that the substitution of the new note, is not a payment or release of the mortgage even as to subsequent purchasers. Jones on Mortgages, § 927, and cases therein cited. " A mortgage secures the debt and not the note, or bond, or other evidence of it." Ibid. § 924. See also Hilliard on Mortgages, 4th ed. 476. Numerous other authorities might be cited to the same point. Indeed, in Rice v. Dewey, 54 Barb. 455, it was said that "No case can be found holding that a mortgagee, whose mortgage is duly recorded, loses any right by neglecting to give personal notice of such mortgage to a purchaserand in Fisher v. Mossman, 11 Ohio St. 42, it was held that nothing short of fraudulent action on the part of the mortgagee will defeat hds rights under a mortgage duly recorded.
We should not have considered it worth while to cite any authority upon this question, were it not for the decision of a court of deservedly high standing in the case of Fry v. Shehee, 55 Ga. 208, where we find the following language: " If the mortgagee indulges the mortgagor, for a consideration, until he becomes insolvent, such indulgence will make the purchaser's title good." A careful examination of the case (by no means satisfactorily reported), leaves it doubtful whether any such question ever was so decided in it; but if it was, we can only say that we are unwilling to adopt it.
Judgment affirmed.