Scrivner v. Dietz

Fox, J. Action for foreclosure of mortgage. Decree for plaintiff, from which the defendant, Dietz, holding under a conveyance subsequent to the mortgage, appeals. The ease comes up on the judgment roll.

[296]The only question in the case is, whether the mortgage lien was extinguished by merger into the legal title.

The facts, briefly stated, are: The entire tract covered by the mortgage was conveyed by Blaise to Grant for the sum of twenty-five thousand dollars. Of this sum six thousand dollars was paid down, and a deed executed and placed in escrow, to be delivered upon payment of the balance. Before the balance was paid, Grant became involved,—mechanics’ liens were filed upon the property, other creditors were pressing, and among the rest the London and San Francisco Bank, to which Grant was indebted in the sum of five thousand dollars. To secure this last indebtedness, and a further advance of one thousand dollars, Grant gave his note to the bank for six thousand dollars, and executed a mortgage of the property to Latham, the then manager of the bank. The-property was in one body, but we infer, from the manner in which it is referred to in the briefs, it was used or handled as three parcels, differing in character and differently occupied. In the briefs they are designated as parcels 1, 2, and 3, and a specific description is given of each.

Subsequent to the date and record of the mortgage, and before any further conveyance of the promises had been made, the entire mortgaged premises were attached at the suit of McAfee and Spiers, and, under judgment recovered in that case, after the legal title of the property had passed into Latham as hereinafter stated, parcel No. 3 of the mortgaged premisés was sold by the sheriff and bid in by McAfee and Spiers, who in due course received the sheriff’s deed therefor, and subsequently conveyed the same to the defendant,. Dietz. After the levy of the attachment, but long before the judgment, Grant, the mortgagor, conveyed the entire mortgaged property to Taylor, in trust, to sell the same, and use the proceeds of the sale, which he was authorized to make either at public or private sale, in paying off the debts [297]of Grant, in the following order: 1. The balance of the purchase-money due to Blaise; 2. Amounts due under mechanics’ liens; 3. The debt secured by the mortgage here in suit; 4. Judgment liens; and 5. Unsecured debts of Grant pro rata.