Case Name: Straman, Admr., v. Rechtine et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1898-06-07
Citations: 58 Ohio St. 443
Docket Number: 
Parties: Straman, Admr., v. Rechtine et al.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 58
Pages: 443–462

Head Matter:
Straman, Admr., v. Rechtine et al.
Mortgage lien — Money loaned to pay off first lien — Loaner to have first lien — New mortgage defective — Loaner subrogated to rights of .first mortgagee — Rights of creditors against mortgagee— Dower interest of widow.
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 can not 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 moi’tgage 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 isa 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.
(Decided June 7, 1898.)
Error to the Circuit Court of Putnam county.
Anton Rechtine, being the owner of sixty 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, Wisconsin, of the date of April 26, 1889, for the sum of sixteen hundred dollars, which mortgage was duly recorded.
Afterward, 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 five hundred dollars, 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 lifetime 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 sixty acres of land of which Anton Reehtine died seized.
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 five hundred dollars 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 arguments of counsel, and the court made no separate findings of fact, but found generally that the facts stated in the said cross-petitions of Mr. Brunning, Mrs. Moe and the widow were true, and gave judgment that the lands he 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.
George Fritz, for plaintiff in error.
The attention of the court is called to the similarity between section 6165 and section 6091 of the Revised Statutes of Ohio. '
Section 6091 provides for the payment of liens against personal property of a decedent when it is sold by the administrator, and was construed by this court in the case of Kilbourne et al. v. Fay, Fxr., et al., 29 Ohio St., 264.
Section 6165 provides for the payment of liens against real estate of a decedent when it is sold by the administrator, and is similar to section 6091.
In Ohio we have a number of decisions upon questions similar to the issues in this ease.
It has been held that the lien of an unrecorded real estate mortgage is inferior to a judgment lien. Holliday et al. v. Bank et al., 16 Ohio St., 533; Fosdick v. Ba/rr, 3 Ohio St., 471; Jackson and Buel v. Luce et al., 14 Ohio St., 514; White v. Denman et al., 1 Ohio St., 110.
That the lien of an unrecorded real estate mortgage is inferior to the claims of an assignee for creditors. Erwin et al. v. Bhuey, Assignee, etc., 8 Ohio St., 510; Bloom et al. v. Moggie et al., 4 Ohio St., 45; Betz v. Bnyder, 48 Ohio St., 492.
That the lien of an unfiled chattel mortgage is inferior to the claims of an administrator. . Kilbourne et col. v. Fay, Exr, et col., 29 Ohio St., 264; Whiteley v. Weber, Admr., 2 C. O. R., 336; s. c. 1 C. D., 517.
Analogy between a judgment lien and a debt of a decedent.
One is a lien on the land and the other the land is bound for the payment of. Notwithstanding the legal effect of each of them, if the land should be conveyed away, by the judgment debtor or the heir at law of a decedent and an attempt was made to subject the land to the payment of the debt, in either case it would be a good defense for the purchaser to allege and' prove that there was sufficient personal property out of which the debt could be made. Both are a general lien and in neither case can land be sold to satisfy the lien until after a return is made that there is no personal property out of which the debt can be made. Dili v. Priml/y, 12 Ohio St., 38.
A death of a decedent operates as an assignment.
An assignee and an administrator are each a trustee for creditors.
Take away the creditors and there is no occasion for the appointment of either assignee or administrator. McDonald et al. v. Aten et al., 1 Ohio St., 293; Overturf, Admr., v. Dugan et al., 29 Ohio St., 230.
Elizabeth Rechtine as widow of Anton Rechtine deceased, had a right to have dower assigned to her in the real estate of the decedent and had a right to have a homestead set off to her out of the real estate of the decedent.
However, the widow is not seized of the land in which she has such right, she cannot bargain and sell it at law, it cannot be seized in execution by her creditor, she cannot mortgage or lease it, but she can release it to the tenant. 5 Am. and Eng. Encyclo. of Law, 1st Ed., 906.
Now in this ease the widow did release all her rights in all this real estate to the owner of the fee, when she joined in the deed of all the other heirs at law to Ferdinand Rechtine and her deed should not be set aside upon the facts stated in her cross-petition herein and of course without such deed being set aside we contend it was error to allow her dower in any part of said real estate as against the creditors of her husband’s estate who are represented by the administrator plaintiff herein when said estate is insolvent.
Watts <£ Moore, for defendant in error — Brunning.
The mortgage to the Northwestern Life Insurance Company was the first lien that attached, and no act of the heirs or the administrator except the payment of it could discharge such lien. The administrator discloses the fact that there was no personal estate, so that the real estate alone was bound for its payment, and whoever became-the grantee of such real estate took it encumbered and charged with the lien of the insurance company. When Ferdinand Rechtine took title from the heirs of Anton Rechtine for the real estate, it was encumbered by the mortgage lien of Tbe Northwestern Life Insurance Company, which he was bound to discharge or suffer the property to be sold for its payment. The indebtedness was due, and to meet the payment of the mortgage and protect the property from sale, the defendant Brunning, at the instance of Ferdinand Rechtine, paid to the Life Insurance Company the full amount of its mortgage, $1,600, and took the mortgage of Ferdinand Rechtine to secure the same.
This did not prejudice the estate of Anton Rechtine, nor did it prejudice the creditors of his estate. The lien of The Northwestern Life Insurance Co. existed at the decease of Anton Rechtine. The mortgage of Ferdinand Rechtine was . substituted for it, at the time that the defendant Brunning furnished the money to discharge the former lien. So that the creditors of Anton Rechtine have no right to complain because of the substitution of the one lien for the other. They were deprived of no right whatever. It is well recognized by the common law, that in ease the debtor borrows money from a third party to pay a debt, he may subrogate the lender to the rights of the creditor; for by this change the rights of the other are not injuriously affected. In this case the borrowing was made to discharge the existing lien and was used in procuring its discharge. 2 Bouvier, 553.
It will also be observed in this case that the payment of the mortgage to the insurance company and the payment of the money and execution of the new mortgage wére contemporaneous acts. Carr v. Oaldioell, 10 Cal., 380; Gilbert v. Gilbert, 39 Iowa, 657; Bidener v. Pavey, 77 Ind., 241; Johnson v. Barrett, 117 Ind., 551; Emmert v. Thompson, 49 Minn., 386. Gems v. Thieme, 93 N. Y., 225; Zells Appeals, 111 Pa. St., 532; Bakers. Ward, 7 Bush (Ky.), 240; Gaskillv. Wales, 36 N. J. Eq., 628; Wilton v. Mayberry, 75 Wisconsin, 191; Muir v. Berkshire, 52 Ind., 149; Sidenor v. Hawes, 37 Ohio St., 532; Sheldon on Subrogation, 13; Marsh v. Bice, IN. H., 167; Barker v. Ba/rker, 4 Pick., 505.
The plaintiff in error does not distinguish between contribution and subrogation.
The real estate of Anton Rechtine was encumbered for the full amount of the indebtedness to The Northwestern M utual Life Insurance Company by mortgage executed by himself and wife. Other parties who joined in the execution of the mortgage had no interest to convey and conveyed nothing. When the land was conveyed after the death of Anton Rechtine to Ferdinand Rechtine he took it subject to the mortgage. The real estate was primarily liable for the satisfaction of the mortgage. When Brunning furnished the money to satisfy the incumbrance of the insurance company, it was done upon the representation that the debts of the estate were paid, even requiring receipts to be exhibited and an affidavit to be made to that effect; also that the Moe mortgage should be deferred and Brunning should take the place of The Northwestern Insurance Company.
Bailey c& Bailey and Handy c& Ogden, for Mrs. Moe’s Admr., defendant, in error.
There can be no question but that the first mortgage to Mrs. Moe was valid as between the parties, and of course it created an equitable lien in favor of M rs. Moe as against all but subsequent grantees and subsequent lienholders. Sidell v. Maxwell, 4 Ohio St., 236; Fostick v. Barr, 3 Ohio St., 471; Gillv. Finney, 12 Ohio St., 38; Stewart v. Hopkins, 30 Ohio St., 502; Riley v. Rice, 40 Ohio St., 441; Building Association v. Clark, 43 Ohio St., 434.
The first mortgage was subject to reformation. It cannot be doubted that it was subject to reformation. Counsel for plaintiff in error in an elaborate brief, claiming almost everything, does not claim that the mortgage was not subject to this action of the court.
The power to reinstate. The power of a court of equity to reinstate this first mortgage does not seem to be questioned, but counsel insist that such decree cannot be made effective, as a new lien, that of general creditors, has attached in the meantime.
No consideration for her release. There was no consideration for the release of the mortgage of Mrs. M03. It seems to have been assented to by her as an accommodation to some one she did not know. Why she did it she never knew. All that she asked was that she should not lose her' lien, that lien that she then held on the land. All this she was promised should be preserved to her. This she did not get. To refuse to her the relief she has asked in this case would be legalized robbery.
Do not forget that no new rights intervened between the release of this first mortgage and the decree reinstating it. No principle of estoppel can be invoked against her.
We especially call attention to Gilbert v. Gilbert, 29 Iowa, 657; Johnson v. Barrett, 117 Ind., 551; Gill v. Finney, Adrm\, 12 Ohio St., 38.

Opinion:
Burket, J.
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 $500.00, and he agreed to obtain a release of that mortgage so that the mortgage to Mr. Brunningshould 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.
Afterward 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 paid, and therefore an administrator was appointed on his estate, and a petition filed in the court of com mon pleas to sell the lands. As the lien of the creditors of Anton Rechtine attached to the lands immediately upon his death, and as the lien of Mr. Brunning's mortgage attached long after the death of Anton Rechtine, the proceeds of the sale of the lands would have to be applied to the payment of general creditors, and Mr. Brunning would get only such surplus as might be coming to Ferdinand after the settlement of the estate of his father. This would be compelling Mr. Brunning to contribute $1,600 of his own money without consideration, for the benefit of the general creditors of Anton Rechtine. This would be wrong, and should be avoided if it can be done without injuring the legal rights of others.
As matters stood after the death of Anton Rechtine, and up to the payment of the insurance company's mortgage with the money of Mr. Brunning, the creditors were legally entitled to receive only the surplus after payment of the insurance mortgage. They contributed nothing toward paying that mortgage, and they are not entitled to be ben-' efited by the payment made with the money supplied by Mr. Brunning for that purpose. To subrogate him to the lien of the insurance mortgage before its release, and to set aside that release, and restore its full force for his benefit, will protect him from loss, and will not put the general creditors into a worse condition than they were before Mr. Brunning loaned his money. Such subrogation will add no new burdens to the creditors: When their liens on the lands accrued, the lands were bound for the payment of the mortgage lien of $1,600, and it can make no difference to the creditors, whether payments is made to the insurance company or to Mr. Brunning.
Where money is loaned under an agreement to be used in the payment of a lien on real estate, and it is so used, and the agreement is that the one who 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 the money supplied by him has paid, when it can be done without placing greater burdens upon the intervening lien-holders than they would have borne if the old mortgage had not been released. Mr. Brunning was, therefore, clearly entitled to be subrogated, and there was no error in so ordering. Sidener v. Pavey, 77 Ind., 241; Emmert v. Thompson, 49 Minn., 386; Johnsons. Barrett, 117 Ind., 551; Gilbert v. Gilbert, 39 Iowa, 657; Marsh v. Rice, N. H., 167; Harris on Subrogation, sections 736, 793; Carr v. Caldwell, 10 Cal., 380; see also Sheldon on Subrogation; Amick v. Woodworth, 58 Ohio St., 86; Joyce v. Dauntz, 55 Ohio St., 538.
A more difficult question arises as to the rights of the parties in the matter of the mortgage to Mrs. Mary H. Moe for the sum of $500.00.
Mrs. Moe released her first mortgage for the purpose of allowing the mortgage to Mr. Brunning to have priority, and as to him she is conclusively bound by her release, but as to all other parties she is free to assert and enforce whatever rights she may have.
The mortgage from Anton Rechtine and Elizabeth Rechtine, his wife, to Mrs. Moe was perfect as to the wife, but was defective as to the husband, because his name was left out of the certificate of acknowledgment by mistake of the notary public before whom the mortgage was in fact duly acknowledged by both husband and wife as found by the court. This clearly entitled Mrs. Moe to have the mortgage reformed as to the husband, and as to his wife no reformation was necessary, as the notary correctly certified her acknowledgment. As to the wife, therefore, the mortgage was properly admitted to record, it being made after the passage of the statute allowing married women to execute deeds and mortgages without joining with their husbands, and the mortgage bound whatever interest Mrs. Rechtine had in the lands.
As to Anton Rechtine, the mortgage not having been acknowledged, it was defective and was not entitled to record, and the record thereof was a nullity, and was notice tono one and bound no one. What then was the legal effect of reforming the mortgage as to the husband after his death?
In the case of Van Thorniley v. Peters, 26 Ohio St., 471, this court held that: 11A defective mortgage when reformed will not affect the lien of a judgment rendered between the date of the execution and the reformation of the mortgage."
It has also been held that a defective mortgage when reformed will not 'affect the rights which general creditors have acquired under an assignment of the mortgagor for the benefit of his creditors, and. it has also been held that an unrecorded mortgage cannot affect the rights of general creditors in such assignment cases.
Can the reformation of a defective mortgage, after the death of the mortgagor, affect the rights or liens which general creditors acquired at the death of the mortgagor? In the case of Ramsdall v. Craighill, 9 Ohio R., 197, this court held that: ' 'The debts of a deceased person are a lien on the land of which he died seized, in default of personal assets, whether devised or cast by descent, which can only be removed by the payment of the debts, or the lapse of time. ' ' The rule of this case has been universally approved and followed ever since. Sheldon v. Newton, 3 Ohio St., 494; Overturf v. Dugan, 29 Ohio St., 230. The exact nature of this lien has never been determined, but that to creditors it is a valuable right, cannot be doubted. It is of the same character and nature as the lien or trust in favor of creditors in cases of assignments for their benefit. In assignment cases the title to property passes to the assignee by the act of the owner, the assignor; and in the case of deceased persons the title to the personal property passes to the administrator by operation of law upon the death of the owner, and the real estate vests in the heir, burdened with the debts of the ancestor, subject to be sold by the administrator for the payment of his debts; and the property is held by the assignee in the one case, and by the administrator in the other, in trust for the creditors; and the creditors in either case can only work out the payment of their claims through the said trustees. The process of execution to obtain payment of their claims, is the action taken by the assignee or administrator under the statutes and orders of the court, while in cases of judgment liens the process is by the action of the sheriff under an execution placed in his hands. But in all cases of liens the creditors obtain their money by enforcing the lien, either by causing the trust to be executed, or by execution at law.
In Kilbourne v. Fay, 29 Ohio St., 264, it is said on page 279, that the rights of creditors can be as serted through an assignee for their benefit, as they can be.by judgment and execution against the property; and on the next page it is said, that the analogy between the duties of an assignee and an administrator of an insolvent estate, is perfect. That being so it follows that the rights of creditors can be asserted through an administrator as fully and effectually, but not always as speedily, as by judgment and execution against property. This being so the lien of creditors upon property of a deceased person is of as high a grade as the lien for the benefit of creditors in cases of assignment, or the lien of judgment creditors. While the process of enforcing such different liens is not the same in all cases, the liens themselves are equal in right, and one cannot shove aside, or supersede the other.
It appears in the record that the estate of Anton Rechtine is insolvent, and his creditors having obtained a valid lien on his real estate at his death, by operation of law, and the mortgage to Mrs. Moe being then and for more than a year thereafter, so defective as not to be entitled to record, it cannot now, upon being reformed, be made to take effect as against creditors so as to become prior in right to their lien. This inevitably follows from our recording acts. Section 4133, Revised Statutes, provides that mortgages "shall take effect from the time the same are delivered to the recorder of the proper county for record." This means that they shall so take effect as to third parties, including creditors. As between the parties to the mortgage no record is required, and as between them, when the mortgage is executed and delivered, the lien becomes perfect.
In a careful review of the force and effect of our recording acts by Williams, C. J., in Betz v. Snyder, 48 Ohio St., 492, I find the following:
"It has been held by this court, as often as the question has been presented, and it has been made in a variety of forms, as well as in numerous cases, that mortgages of real property have no effect, either at law or in equity, until they are delivered to the recorder of the proper county for record, as against third persons acquiring a legal interest in, or lien upon the property. It (the recording statute) was designed to protect the persons who might acquire legal interests in, or liens upon the property."
In the case at bar the creditors, at the death of Mr. Rechtine, acquired a legal lien upon the lands in question, and the mortgage of Mrs. Moe, when reformed, could not displace that lien, and get in so as to obtain money which would otherwise go to the creditors.
It is urged that the doctrine of the case of Gill v. Pinney, 12 Ohio St., 38, which gave preference to a mortgage recorded shortly after the death of the mortgagor, over his general creditors, would give the mortgage to Mrs. Moe, when reformed, a preference over general creditors. This does not logically follow. In the Gill case the mortgage was perfect, and at common law passed the legal title after condition broken, and upon which ejectment could have been maintained; but the Moe mortgage was not a completed instrument under our statutes requiring mortgages to be signed, attested and duly acknowledged, and under' such a defective mortgage the legal title would not pass, and ejectment could not be maintained at common law upon such defective mortgage without the aid of a court of equity to first reform the mort gage. In the Gill case the mortgagee could himself do all that was required, simply by causing his mortgage to he recorded; while in the Moe case the .mortgagee had to first call in the aid of a court of equity to reform her mortgage, and thereby give it legal force and effect, so as to encumber the legal title.
While the lien in favor of creditors is usually said to be a general lien, this court held it to be a specific lien in Sheldon v. Newton, 3 Ohio St., 494. But even if such lien is general, and that in favor of a mortgagee specific, it does not follow that a later specific lien can displace an earlier general lien. In the Gill case it is said that the general lien of creditors "must be limited to the property which passes, and to that, in the condition in which it passes. If the lands descend to the heir charged with an incumbrance created by the act of the ancestor, the lien of the general creditors must attach to it in the same condition. ' ' But in the case at bar there was no present subsisting lien on the lands in favor of Mrs. Moe at the time the general lien of the creditors attached. The defective mortgage had not then ripened into a subsisting lien on the lands. True it amounted to a contract for a lien, but it was not a lien in and of itself. Carr v. Williams, 10 Ohio R., 305; White v. Denman, 16 Ohio R., 59, and Williams v. Spriggs, 6 Ohio St., 585. While it could be reformed, and thereby made a lien, it could not when reformed and made a lien, have priority over the earlier general lien of the creditors.
Judge McIllvaine, in Kilbourne v. Fay, 29 Ohio St., 280, seems to doubt whether the same conclusion would have been reached in the Gill case, if our statute had declared unrecorded mortgages absolutely void as against creditors, and that doubt seems to be well founded. Section eight of our Deeds Act has been materially chang-ed since the decision of the Gill case, and it was accordingly held in Betz v. Snyder, 48 Ohio St., 502, that a mortgage which has no effect is no better than a void one, for a void mortgage is simply without effect.
If the Gill case is still sound law under our present statutes, it must be confined to the exact facts of that case, and cannot be extended, because it already encroaches somewhat upon the logical construction of our recording acts.
We, therefore, hold that the Moe mortgage when reformed, acquired no preference over the general creditors, and that in the distribution of the fund arising from the sale of the interest of Anton Rechtine in the lands at the time of his death, Mrs. Moe must stand and be treated as a general creditor only, having no preference over other general creditors.
After the death of Anton Rechtine, Mrs. Moe held her mortgage, duly executed, acknowledged and recorded, against the interest of Mrs. Rechtine in the lands of which her husband died seized, and if the lands had then been sold by the administrator to pay debts, her mortgage would have been a charge in equity against the dower interest of Mrs. Rechtine. Black v. Kuhlman, 30 Ohio St., 196. Having released her mortgag-e to enable Mr. Brunning to have a first lien, and having received no consideration for such release, and Mrs. Rechtine having paid nothing for such release, and her new mortgage proving worthless, owing to the mistake of all the parties as to the effect of the transactions among them, it is only just and right that Mrs. Moe should have the release of her first mortgage set aside, and that the full force and effect of that mortgage should be restored for her benefit and protection. This leaves Mrs. Rechtine and Mrs. Moe where they stood at the death of M-r. Reehtine, and does no injury to the legal rights of Mrs. Rechtine, in fact places her where she placed herself when she executed the mortgage to Mrs. Moe, and at the same time protects the legal and equitable rights of Mrs. Moe.
Upon the facts found to be true by the court of common pleas, that court did not render the proper order of distribution, and therein committed an error of law, and the circuit court erred in affirming the judgment.
The distribution of the proceeds of the sale, after payment of costs, taxes and expenses of sale, should be as follows:
1. Pay the $1,600.00 and interest due to Mr. Brunning.
2. Ascertain and set aside the money value of the dower estate of Mrs. Rechtine.
3. Distribute the remainder among the general creditors, including Mrs. Moe. Should there not be sufficient to pay Mrs. Moe in full, whatever may be due her after receiving her dividend from the administrator, should be paid out of the money value set aside for Mrs. Rechtine, and the balance of such money value then left, should be paid over to Mrs. Rechtine.
The judgment of the circuit court will be reversed, and proceeding to render such judgment as the circuit court should have rendered, the judgment of the court of common pleas will be so modified as to reach the result above indicated.
Judgment reversed.