Court Opinion

ID: 5571000
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:12:20.442054+00
Date Added: 2024-06-11T08:35:45.436205
License: Public Domain

Fish, J.
This case turns upon the question whether, under the facts stated, equity will restore the liens of the mortgages cancelled by the American Trust and Banking Company to their original priority over the mortgage held by Lippold. Under the view we take of the matter, it is unnecessary to determine whether, according to the equitable doctrine relating to merger, the liens of the mortgages held by the banking company were merged in the title when Mrs. Venable conveyed the premises to the company, or were extinguished by the settlement of the mortgage debt in that transaction ; for, in our opinion, there can be no doubt that the liens of such mortgages were absolutely extinguished when at the request of Woodside, who had purchased the mortgaged property from the banldng company and taken a warranty deed thereto, the banking company made the entries of full satisfaction upon such mortgages and had them cancelled of record, this being done in order to clear the record of liens against the property. If up to the date of Woodside’s purchase there had been no merger and the banldng company’s mortgages were then alive, and if the banking company and Woodside intended when he purchased that he should take all the interests and rights which the banking company held in and to the property, and if under such circumstances no merger or extinguishment of the banking company’s mortgages occurred, in equity, when Woodside acquired the title, yet when the banking company subsequently, and at his instance and request, deliberately marked the mortgages satisfied and had them cancelled of record, they never having been assigned to Woodside, there was then manifested an express and unequivocal intention on the part of both Woodside and the.banking company that the liens of its mortgages should no longer exist — th,at they should merge in the title which Woodside had acquired — and such intention became effective and the mortgages were extinguished. It has been uniformly held, in the application of the equitable doctrine concerning merger, that the intention, when expressed, of the person in whom the two estates or interests meet must control. 2 Pom. Eq. Jur. (2d ed.) § 791; 15 Am. & Eng. Enc. L. (1st ed.) 325; Ferris v. Van Ingen, 110 Ga. 111. In Wiedner v. Thompson, 69 Iowa, 36, the mortgagor conveyed the mortgaged property to the mortgagee, who con*880veyed it to a third person, who gave his note in substitution of the note of the mortgagor, and the holder of the mortgagor’s note delivered it to such third person, marked “ paid,” and cancelled the mortgage of record. A judgment was rendered against the mortgagor after his execution of the mortgage but prior to his conveyance to the mortgagee. In an action by the purchaser from the mortgagee to have the cancellation of the mortgage set aside, on the ground that it was not the purpose of the parties to cancel it and that it was against their interests to do so, it was held that the cancellation could not be set aside. In the opinion Beck, J., said: “ It can not be doubted that the law will look to the intention of the parties, and the interest of the plaintiff, in order to determine whether the mortgage is to be regarded as paid and cancelled. The fact that it was cancelled of record will not avail to discharge the mortgage, if the parties intended that the Ken should continue, and the plaintiff’s interests demanded it. But if the parties intended to discharge the mortgage, and the debt was in fact paid, and not transferred to the plaintiff, the canceKation must stand, and the Ken be regarded as discharged. The mere fact that plaintiff’s interests would have been better protected by permitting the Ken to stand will not control against the intention, clearly estabKshed. The law will permit a party in such a case, as in others, to act and contract in a manner which would not result to his interest.” See Campbell v. Carter, 14 Ill. 286.
The satisfaction and cancellation of the banldng company’s mortgages seem to have been made under a mistake of fact, that Lippold had abandoned his mortgage and would make no effort to foreclose it. While equity will grant reKef against a mistake of fact, it is well estabKshed that such a mistake must be of such a nature that it could not, by reasonable diligence,have been avoided at the time. Equity will not reKeve against the results of culpable and inexcusable negligence. By the exercise of the slightest diligence on the part of Woodside and the banking company, they could have readily ascertained the intention of Iippold in reference to the enforcement of his mortgage. It does not appear that he, or his attorney, ever intimated that the mortgage had been abandoned. The attorney for the banking company gave as a reason for the satisfaction and cancellation of the company’s mortgages that the attorney' for Woodside reported that he had had an interview with the at*881torney for Lippold, and that Lippold would not enforce his mortgage. Equity will not grant relief under such circumstances. The verdict being demanded by the undisputed facts, there was no error in refusing to grant a new trial.

Judgment affirmed.

All the Justices concurring.