Court Opinion

ID: 8654174
Source: CourtListenerOpinion
Date Created: 2022-11-24 21:14:12.449953+00
Date Added: 2024-06-11T16:56:37.842322
License: Public Domain

After a statement of the case as above,
Bartch, J.,
delivered the opinion of the court:
It is contended for the appellant that the tract in controversy was conveyed by the debtors to the respondent Rogers, subject to the $1,000 of the original indebtedness; that the grantee received the premises charged with that amount of the mortgage debt, as a part of the purchase price; and that he must either pay that amount or permit it to be paid and satisfied out of the property. The respondents insist that the appellant has received payment sufficient to satisfy the obligation which existed under the original deed of trust. We think the contention of the appellant is substantially correct. There appears to be no evidence to show that any money was paid to the New England Loan & Trust Company in liquidation of the principal debt, secured by the original deed of trust, before or at the time of the reorganization of the indebtedness. The mere fact that the debtors sold some of the parcels covered by the trust deed, and, upon the reorganization of the loan, the appellant took new trust deeds or mortgages, and released all the parcels, except the one in question herein, did not operate as a release of that parcel, not even if the fair cash value of the parcels sold, together with the sums specified in the trust deeds, is *389equal to the amount of the indebtedness secured by the original trust deed; no intention to release such parcel or discharge the debt which it secured being shown, but, on the contrary, the manifest intention of the parties to the reorganization of the loan appears to have been to hold parcel No. 12 subject to the lien created by the trust deed. The proof fails to show that respondent Rogers was in any manner injured by any of the transactions between the mortgagors and mortgagee. He purchased the property subject to the certain portion of the incum-brance as specified in the trust deed, and there has been no attempt to claim a lien for a greater amount. Where, in an instrument of conveyance, specific portions of a debt are applied to specific tracts of real estate conveyed by such instrument as security for the debt, the sale of one or more of such tracts, subject to the specific and respective portions of the debt, does not affect the lien of the mortgage as to the other tracts included in the same conveyance. Nor does a release of any of such tracts, upon payment of proper consideration, discharge the mortgage lien as to others. Jones, Mortg. § 981. In the absence of covenants in a deed having a different effect, a grantee who takes a conveyance of land subject to a mortgage is presumed to have paid the purchase price, less the amount of the mortgage debt, and in such event it becomes his equitable duty to pay the debt or permit the same to be satisfied by sale of the premises. Id. § 73(5; Freeman v. Auld, 44 N. Y. 50; Johnson v. Thompson, 129 Mass. 398; Hancock v. Fleming, 103 Ind. 533.
It is next insisted, on behalf of the grantee of parcel No. 12, that, if the lien of the trust deed was not discharged in the reorganization of the loan, the doctrine of inverse order of alienation applies, and that, therefore, that tract cannot, in the first instance, be sold, under fore*390closure, to satisfy any portion of the mortgage debt; and that, since the parcels subsequently sold were released from the mortgage lien, no recovery can be had in this case. The doctrine here invoked is to the effect that where a mortgagor sells mortgaged premises in distinct parcels, at different times, the parcel last sold must, upon. suit brought to foreclose, first be applied in satisfaction of the mortgage, and, if that be not sufficient, then the one sold next in point of time, and so on, reversing the order in which the property was conveyed. This doctrine, though originally an exception to the general rule, that, where several parcels'of land are charged with a common burden, all of them must share the burden, has become a distinct rule of property, and proceeds upon the ground that, where a mortgagor disposes of a portion of mortgaged premises by deed, purporting to convey the fee simple, without referring to the mortgage, and retains the other portion himself, it is just and equitable, as between the grantor and grantee, that the portion retained by the grantor should first be applied in satisfaction of the incumbrance, and, such equity having attached to the land, a subsequent purchaser of the portion so retained, with notice, takes it subject to the equity, and this equity also applies to purchasers from the grantees of the mortgagor. The rule enforces the maxim that “equities prevail in the order of time,” by adjusting the burden of the incumbrance in the order of sales. Neither the rule, nor the grounds or reasons on which it rests, however, have any application to a case like the one at bar, where the first grantee purchased a certain parcel subject to a designated and definite part of the incumbrance; for here the grantee, having agreed that the conveyance shall be subject to a part of the debt, has no equity existing in his favor, as against the mortgagor, and, having none as *391against him, he has none as against his subsequent grantee. By taking such conveyance he consented that the parcel conveyed should remain subject to his share of the indebtedness. To enforce, under the circumstances of this case, the rule upon which the respondents insist, would be unjustly to impair the rights of the mortgagee. It was never intended for any such purpose, and can be given no such effect by applying it to a case which, the record shows, is clearly within its exceptions. Where, as in this case, a mortgagor sells a separate and distinct part of the mortgaged premises, and in the deed of conveyance expressly stipulates that it is subject to a certain and definite part of the amount of the incumbrance, the rule as to inverse order of alienation does not apply. Wilts. Mortg. Forec. § 510; Jones Mortg. § 595; Hoy v. Bramhall, 19 N. J Eq. 568; Briscoe v Power, 47 Ill. 447; Evansville Gas Light Co. v. State, 73 Ind. 219; Engle v. Haines, 5 N. J. Eq. 186; Wikoff v. Davis, 4 N. J. Eq. 224.
It is not important to discuss any other question presented in the record. We are of the opinion that, under the facts and circumstances of this case, the court was not warranted in finding and decreeing that the appellant had been paid the full amount of the debt secured by the trust deed, nor in finding that the lien as to the tract of land in controversy was discharged, nor in dismissing the action. The case must therefore be reversed and remanded, with directions to the court below to proceed in accordance with this opinion. It is so ordered.
Zane, C. J., and Miner, J., concur.