Court Opinion

ID: 3553644
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:05:26.600682+00
Date Added: 2024-06-11T14:25:21.688670
License: Public Domain

The trustees are chargeable for the amount due on the note of $2,000 dated June 16, 1866, less the amount of the claim of the Franklin Savings Bank. The claims of the Citizens' National Bank of Tilton and of the Iona Savings Bank to the funds in the hands of the trustees, based upon the attachments made April 14, 1881, and the subsequent levy upon the equity of redemption of Leonard Gerrish, and upon the equitable lien created by the mortgage of Leonard Gerrish to Stephen Gerrish, dated June 17, 1880, cannot be maintained. Neither the attachment and levy upon the equity of redemption, nor the mortgage of June 17, 1880, affected the validity of the note and mortgage of June 16, 1866, or gave the claimants any right, title, or interest therein. By the purchase of the equity of redemption of Leonard Gerrish, the mortgagor, no title to the mortgage or mortgage debt was acquired against Stephen Gerrish, the mortgagee, but merely the right of redeeming the mortgaged premises by the payment of the mortgage note to the party entitled to receive payment of it.
Upon the principle that a creditor is entitled to the benefit of any security given to a surety by way of indemnity, the claimants are entitled to the benefit of the second mortgage, made June 17 1880, by Leonard Gerrish to Stephen Gerrish, to indemnify Stephen as surety for Leonard on notes held by the claimants. But, assuming that this mortgage operated to create an equitable lien in favor of the claimants, it was subject to the then existing mortgage made by Leonard to Stephen to secure the note of $2,000 dated June 16, 1866, which is now held by the Franklin Savings Bank as collateral security for Stephen's indebtedness to the bank. The fact that the mortgage of June 17, 1880, purports to convey the whole farm, and is not in terms made subject to the subsisting mortgage, does not give it priority over the mortgage of June 16, 1866. It is contended that Stephen Gerrish, by accepting the second mortgage containing no reference to any existing incumbrance, waived his claim under his first mortgage, and is estopped to enforce it against the claimants; but no fraud or concealment is shown, and none of the elements of estoppel by conduct appear in the case. The claimants were not misled or induced to change their position, and they had constructive if not actual notice of the existence of the first mortgage. No legal or equitable ground occurs to us on which it can be held that the acceptance of the second mortgage was a waiver of the security of the first by Stephen Gerrish; and hence the claimants fail to establish any title to the $2,000 note and mortgage attached by the plaintiffs in the hands of the trustees.
The trustees should be charged, and if necessary a receiver should be appointed.
Case discharged.
ALLEN, J., did not sit: the others concurred. *Page 400