Court Opinion

ID: 8264223
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:58:55.262841+00
Date Added: 2024-06-11T16:43:17.321878
License: Public Domain

BLAND, P. J.
(after stating the facts). — 1. Kammerer by assuming the payment of the deed of trust Avhen he purchased the land of Giessler, became the principal debtor, and Giessler thereafter stood in the relation of Kammerer’s surety for the payment of the note (Fitzgerald v. Barker, 70 Mo. 685; State ex rel. School District v. Riley, 85 Mo. 156; Culbertson v. Young, 156 Mo. 261, 56 S. W. 893; Sells v. Tootle, 160 Mo. 593, 61 S. W. 579; Artz v. Ins. Co., 90 Mo. App. 539) and had the same rights and remedies against Kammerer as any ordinary surety would have against his principal (Nelson v. Brown, 140 Mo. l. c. 590, 51 S. W. 960; Higgins v. Evans, 188 Mo. 627, 87 S. W. 973) ; and any impairment of the right, as a valid extension of the time of payment without his consent Avould operate to relieve him. [Steele v. Johnson, 96 Mo. App. 147; Wayman v. Jones, 58 Mo. App. 313; Commercial Bank v. Wood, 56 Mo. *718App. 214.] But there is no evidence that the time of payment was extended after the relation of principal and surety between Kammerer and Giessler attached, and if Giessler, as surety, ivas released, his release must be found in the fact that plaintiff acquired both the legal and equitable estate in the land before the foreclosure sale, and that there was a merger of the two estates in plaintiff which operated to extinguish the debt.
In Am. & Eng. Ency. of Law, vol. 20, p. 1064, it is said; .“The rule deducible from the authorities is that where the ownership of a mortgage and the equity of redemption become vested in the same person, without any intervening right between the mortgage and the equity, the mortgage will become extinguished or not, according to his intention, expressed or implied. If an express intention appears in the instrument uniting the two interests, or can be gathered from the circumstances of the transaction, this will determine the question. In the absence of express intention it will be presumed that such person intended to keep the mortgage alive if its continuance as its subsisting charge is beneficial to him, otherwise that he intended to extinguish it. Such controlling intention, however, must be innocent and injurious to no one, for equity will not extend its aid to the accomplishment of a fraud or other unconscientious wrong.”
Jones says: “It is the general rale that when the legal title becomes united with the equitable title, so that the owner has the whole title, the mortgage is merged by the unity of possession. But if the owner has an interest in keeping these titles distinct, or if there be an intervening right between the mortgage and the equity, there is no merger.” [1 Jones on Mortgages, sec. 848.]'
In Bassett v. O’Brien, 149 Mo. l. c. 389, 51 S. W. 107, it is said:
“Mergers are not favored either in courts of law or *719of equity. [Simonton v. Gray, 34 Me. 50; James v. Morey, 2 Cowen 246.] Merger at law is defined to be ‘When a greater estate and a. less coincide and meet in one and tbe same person, in one and tbe same right, without any intermediate estate.’
The rule in equity is the same as at law with this modification that at law it is inflexible whereas in equity it is clear that a person may become entitled to an estate subject to a charge for his own benefit and if he choose can hold the estate and keep the charge alive. It becomes a question of intention in the person in whom the two interests are vested.”
Prima facie the equitable was merged in the legal title, for there was no intervening lien or estate and there was no express agreement that the mortgage should be kept alive. The terms of the sale of the land by Kammerer to plaintiff were contained in the following written proposition (offered in evidence) from plaintiff to Kammerer and accepted by the latter:
“St. Louis, March 11, 1895.
“Mr. L. S. Holden,
“Dear Sir: — I hereby propose and agree to make the following exchange of property through your agency with Mr. Adolph Kammerer, viz:
“Trade my 320 acres land being in section 29, township 25, range 33, east in Lincoln county, Washington ■ — subject to liens due the Northern Pacific R. R. taxes and interest on same, giving $2,000 cash for 82 acres of land adjoining the Rogers farm on the west and on the east line of the Ralls Road in St. Charles County, Mo., in section 16, township 48, range 5, east, same to be deed subject to deed of trust, accrued interest and taxes, papers to be passed at once and crop on St. Charles farm to go to me, I to give contracts of the Northern Pac. R. R. Co. for the 320 acres and said Kammerer to give me war*720rantee deed subject to tbe above liens same 82 acres to be as represented by Mr. L. S. Holden.
“Yours truly,
(Signed) “Charles P. Wonderly.
“P. S. — Certificate of title up to tbe time tbe $2800 loan was made to be furnished me.
“Yours truly,
“C. P. Wonderly."
“The within contract is accepted on terms and conditions herein named.
(Signed) “Adolph Hammerer."
Plaintiff’s evidence shows that he acquired the notes subsequent to his purchase from Hammerer, and that he got the notes at a slight discount. His evidence is that he purchased them because he thought it was to his interest to do so. If a mortgagee, while he holds the mortgage, acquires the estate of the mortgagor, the mortgage thereby becomes extinct. [2 Washburn on Real Property (6 Ed.), sec. 1122.] Hammerer by assuming the payment of the mortgage stood in the place of the mortgagor, and if plaintiff had been the assignee of the mortgage at the time he purchased the estate of Hammerer, the debt and mortgage would have been extinguished. Rut he acquired the mortgage after he acquired the equity of redemption. The general principle is that where the mortgagee purchases in the equity of redemption, the mortgage and debt are thereby extinguished. [Dickason v. Williams, 129 Mass. 182; 2 Washburn on Real Property (6 Ed.), sec. 1122, pp. 174-5; Jones on Mortgages, supra.]
In Asche v. Asche, 113 N. Y. l. c. 236, it is said:
“Merger requires the existence of two estates, a greater and lesser, and, upon merger taking place, the lesser estate is said to be extinguished and absorbed in the greater; but this cannot take place where there is an intermediate estate.’’
When merger takes place the lesser estate *721is immediately annihilated. This ruling is inflexible at law and is the same, in equity as at law, with the modification, as hereinbefore stated, that it is controlled by the implied or express intention of the party in whom the interest in the estate is merged. Equity will imply the intention not to merge when a merger would operate as a fraud upon the party who has acquired the greater and lesser estate, or would have the effect to deprive him of some right or remedy that in equity and good conscience should be kept open for his benefit. An express intention that a merger should not take place could not be shown, from the very nature of the case. A secret intention that there should not be merger will not have the effect to prevent it, and the plaintiff’s situation is no better than that of a mortgagee who buys the equity of redemption of the mortgagor. His purchase of the equity of redemption extinguishes the mortgage, there being no evidence tending to show any equitable reason for keeping it alive. To the contrary, the evidence shows that after plaintiff acquired the equity of redemption he purchased the note because he thought it was to his interest to do so to perfect his title. Hepurchased the estate subject to the mortgage. This means that the amount due on the mortgage was taken into consideration in fixing the purchase price of the estate, and that plaintiff paid Hammerer that price, less the amount due on the mortgage, hence when he acquired the mortgage he became possessed of the whole estate at a price he was willing to pay for it in the first place. Therefore, there can be no equitable ground to keep the mortgage alive, and we think, under the evidence, the equitable estate was merged in the legal one, and that the mortgage was thereby extinguished.
The judgment is therefore reversed.
All concur.