20 Wash. 378 | Wash. | 1898
E. W. Eaton and wife made and delivered to John E. Seeber two promissory notes, one for the sum of $1,000 and one for the sum of $209, and to secure the payment of these notes, executed and delivered to Seeber a mortgage on the property, which is now sought to be foreclosed. After the execution and delivery of said notes and mortgage, Seeber sold the note for $1,000 to one Stubblefield, and sold the other note of $209 to Daniel Stewart, the plaintiff in this action. These notes were given on the 17th day of May, 1892. In December, 1894, Stubblefield informed Stewart of his ownership of the note, and Stewart declined to join with him in an action to foreclose the mortgage. Stubblefield thereupon commenced an action without making Stewart a party, either plaintiff or defendant. After the service of the summons and complaint, Eaton and wife, in consideration of the dismissal of the action and the cancellation and surrender by Stubblefield of the note to him, conveyed the mortgaged, land to him in fee, and said note was marked “paid” across its face. Subsequently Stubblefield sold the land to R. A. Dozier, and after the commencement of this action, the land was deeded back to Stubblefield. After the foreclosure action had been commenced by Stewart on the note which had been sold and assigned to him by Seeber, the court made an order requiring Stubblefield to be made a party. The plaintiff moved the court to vacate this order, but, before that motion was determined, Stubblefield filed his complaint in intervention, which plaintiff moved to strike out. The court overruled the motion and, upon the hearing, it was determined that there was due and owing to Stubblefield, on the cause of action set out in his complaint in intervention, the sum of $1,047.50, and interest thereon from the 17th day of May, 1893, at the rate expressed in the note, together with his costs, etc., and there
As we view the law governing this case, the determination of the fourth assignment is all that is essential, for, if Stubblefield lost his equitable right to foreclose the mortgage by accepting a deed for the mortgaged premises in lieu of the note, then he should not have been allowed to have intervened, and the land should have been decreed clear of all liens excepting plaintiff’s lien. On the other hand, if the equitable right was not merged in the deed, plaintiff’s rights have not been changed or interfered with in any way by the subsequent deeds from Stubblefield to Dozier and from Dozier back to Stubblefield. It is contended by the appellant that by reason of the surrender by Stubblefield of his note to the maker, in consideration of the deed, with knowledge of the fact that plaintiff was the owner of the other note, he is not entitled to be restored to his original right and lien as the holder of said note; that equity will only relieve a party from such a transaction where there is some mistake, misrepresentation, or fraud, and that, under the conditions as shown here, Stubblefield is not entitled to have the note and lien treated as still
“ Where a mortgagee takes a conveyance of the land from the mortgagor or from a grantee of the mortgagor, if the transaction is fair, the presumption of an intention to keep the security alive is very strong. It is generally for the interests of the party in this position that the mortgage should not merge, but should be preserved to retain a priority over other encumbrances. As the mortgagee acquiring the land is not the debtor party bound to pay off either the mortgage or the other encumbrances on the land, there is nothing to prevent equity from carrying out his presumed intent, by decreeing against a merger.”
The general rule is that merger will be decreed or not, according to the intention of the parties at the time of the transaction, and, as it must be presumed that it is not the intention of the owner in equity to lose that right because the legal fee passes to him, we must conclude that in this case there is nothing to indicate the intention of Stubble-field to allow his equitable right to be merged in the legal title. It is true, also, that equity will not prevent a merger when it would work a hardship upon any one else, or carry
We think the judgment was the correct one, and it will therefore be affirmed.
Scott, C. J., and Gordon, Anders and Reavis, JJ., concur.