40 P. 168 | Or. | 1895
Opinion by
It is clearly deducible from these authorities that the fact that the new note executed for the aggregate amount of the two former notes bears interest at an increased rate, and the further fact that the note and mortgage was made payable to McDaniel instead of Kern, could have no significance, where it is manifest that it was the intention of the parties that the new note and mortgage should operate as a continuance of the old indebtedness, and not as a payment or discharge thereof. In Pearce v. Buell, 22 Or. 33, (29 Pac. 78,) a case in point, Bean, J., says: “In such a case a court of equity will look through the form to the substance, and keep alive the original security, if it can be done without injury to third parties. No rule is better settled thau that if the holder of a mortgage take a new mortgage as a substitute for a former one, and cancel and release the latter, in ignorance of the existence of an intervening lien upon the mortgaged premises, although such lien be of record, equity will, in the absence of the intervening rights of third parties, restore the lien of the first mortgage, and give it its original priority.” It is also settled that the acceptance of a note is not payment of an account, nor is the acceptance of one note in renewal of another payment thereof, unless it is so expressly agreed between the parties: Black v. Sippy, 15 Or. 576 (16 Pac. 418); see also Geib v. Reynolds, 35 Minn 331. And nothing short of actual payment of the debt or an express release will operate to discharge the mortgage: Pearce v. Buell, 22 Or. 33 (29 Pac. 78); Jones on Mortgages,
It was also contended by appellant that the equities of plaintiff and the A. P. Hotaling Company were acquired concurrently, and that, such being the case, .the land should be adjudged as a common fund for the indemnity of both parties, under the authority of Fleischner v. Sumpter, 12 Or. 166 (6 Pac. 506). While, in a sense, the equities of these parties beoame effective at the same time, simply because of the peculiar circumstances under which the respective deeds and the mortgage were delivered, yet we have seen that the plaintiff took a superior equity, which has not been surrendered or impaired through his mistake or inadvertence, and no disadvantage accruing to the company through such mistake, there was no error in granting the relief demanded by plaintiff, and the decree of the court below will therefore be affirmed.
Affirmed.