Fowler v. Fay

Citations

• 62 Ill. 375

Syllabus

<p>1. Rights of mortgagee—purchasing fee from mortgagor—os against intermediate incumbrances—merger. In 1866 A & B mortgaged certain lots held by them in severalty to C to secure the payment of a note of §2,912.37, and 0 being indebted to D & Co. assigned to them this note and mortgage as collateral security. In September, 1868, A mortgaged his part of the same lots to F to secure a debt of §1,000, owing from A & B. In December following A & B by warranty deed conveyed the mortgaged lots to C for the expressed consideration of §8,000. This deed was expressed to be subject to the mortgage to F, but contained no provision that the grantee should pay off such mortgage: Held, that the effect of the deed from the mortgagors to C was not to merge the first mortgage in the fee so far as the rights of C were concerned ; and that upon foreclosure and sale, the sum due on the mortgage to C was the prior lien and should be first paid; secondly, the junior mortgage, and the surplus arising from the sale after satisfying both mortgages should be paid to C.</p> <p>Walker, Scott, and Sheldoh, J. J., dissenting.</p> <p>2. Merger. Courts of equity will not apply the technical doctrine of merger where the intention or the just interests of the parties require the incumbrance to be kept alive. Where it is perfectly indifferent to the party in whom the interests are united, whether the charge should or should not subsist, it will sink, but where it is to his interest that it should be kept on foot, the court, in the absence of an expressed intention, will so decree.</p> <p>3. Purchase—subject to incumbrance—rights of parties. Where a party receives a warranty deed containing a clause that it is made subject to a mortgage given upon the land by the grantor to a third party, this will create no personal liability on the part of the grantee to pay the outstanding incumbrance, unless he has specially agreed to do so, or the amount of the incumbrance has been deducted from the purchase pric