Opinion ID: 1131819
Heading Depth: 1
Heading Rank: 4

Heading: fourth question to be determined:

Text: Were the conveyances to Sunvara subject to the lien of the Martin deed of trust? This question is answered in the affirmative. Taber sold the land to Weber, who assumed and agreed to pay the Martin mortgage in the sum of $28,750.00 and as part of the consideration for the sale gave Taber a note for $16,250.00 secured by a second trust deed. Weber made no payments on either obligation, and Taber attempted to foreclose his second trust deed. He took possession of the property and thereafter entered into a new contract for the sale of the property to the Williams for $50,000.00. Of the purchase price the Williams actually paid Taber $9,000.00 cash, assumed and agreed to pay the Martin indebtedness, and delivered their note and deed of trust to Taber for the balance of the purchase price. In 1953 the Williams sought an increased loan from Martin who granted their request, released the 1945 trust deed and took back a new note and trust deed for the balance of the old loan plus the new advance. The increase in the loan of approximately $10,000.00 was paid to Taber in discharge of the second trust deed from the Williams to Taber. At this point Taber was made whole. He received his initial down payment promised by the Williams, and the trust deed from the Williams to him was discharged by the new advance from Martin, and his original note and trust deed to Martin was released. Plaintiffs in error argue that by these manipulations the lien of the second Martin trust deed was somehow evaporated and that Sunvara, the wholly owned corporation of the Williams, Weber and their attorneys, now owns the property free and clear of all liens. This in spite of the fact that Weber paid nothing to satisfy either Martin or Taber, and the Williams paid only $9,000.00 in cash and benefited to the extent of $10,000.00 from the new loan negotiated from Martin and which they used to discharge their obligation to Taber. Sunvara having knowledge of all of these facts through its officers, directors and stockholdersthe principals in this entanglement, is not an innocent purchaser for value and stands in no better position than its grantors. Equity will impress a lien on property in such circumstances based on general considerations of justice.    A chancellor should never hesitate to direct that equity be done in a case before him whenever natural justice requires it, if he finds no precedent for so doing he should establish one. Norman, Inc. et al. v. Holman et al., 105 Colo. 294, 97 P.2d 739. If, as plaintiffs in error contend, the Williams had nothing to convey when they executed their deed of trust to Martin in October, 1953, nevertheless Martin is entitled to equitable relief. On general considerations of equity and justice alone the court had the power to render such relief. In addition, however, the intent of the Williams and Martin to create a mortgage in October, 1953, is clear, and the court had the power to effectuate their intent by impressing an equitable lien on the property. In Colorado it has been held that when the holder of a valid trust deed releases it and takes back a renewal trust deed without knowledge of intervening encumbrances, the court will grant priority to the new trust deed over any intervening encumbrances or interests to the extent of the original obligation. Lawson v. Whitley, 69 Colo. 346, 194 P. 355; Holt v. Mitchell, 96 Colo. 412, 43 P.2d 388, 98 A.L.R. 838. In this case there is no longer any question of priority. The Martin lien is the only one outstanding and because of the relation of Sunvara to the Williams, the lien is imposed for the full amount of the Williams obligation including the increase in the loan. The trial court fully disposed of all of the rights of the various parties with respect to one another. Complete equity has been done. The judgments are affirmed. HALL and FRANTZ, JJ., concur.