Chase v. McKenzie

[433] Opinion by Mb. Chief Justice Mooee. 1, 2. It will be remembered that the judgment secured by Bryan against Fore became a lien upon whatever interest the latter had in the real property May 21, 1912; that the original suit to foreclose the mortgage was dismissed September 19, 1912, and the lien canceled two days thereafter, thus rendering Bryan’s judgment a superior hen upon Fore’s interest in the lot. It will also be kept in mind that Mrs. Fore’s quitclaim deed was executed before she secured a divorce, and that in such decree no disposition was made of any estate she then or ever had in the premises. It is unnecessary to advert to the estate by the entirety which was created by the conveyance of the lot to S. J. Fore and Minnie A. Fore, his wife, the validity of the quitclaim deed which she executed to Hale before she was divorced, or the effect of the decree dissolving her marriage contract. An estate by the entirety is recognized by this court: Noblitt v. Beebe, 23 Or. 4 (35 Pac. 248); Oliver v. Wright, 47 Or. 322 (83 Pac. 870). It has also been held that a divorce changed an estate by entirety to an estate in common: Hayes v. Horton, 46 Or. 597 (81 Pac. 386). It is unnecessary to inquire whether or not Mrs. Fore could, without joining with her husband, convey any interest in the land which she held as a tenant by the entirety. Upon this subject see the case of Howell v. Folsom, 38 Or. 184 (63 Pac. 116, 84 Am. St. Rep. 785). Nor is it essential to determine, if she took as a tenant in common when the divorce was granted, whether such title inured by estoppel to Hale under her quitclaim deed. As to the latter, question in ordinary cases, however, see Taggart v. Bisley, 4 Or. 235; Bayley v. McCoy, 8 Or. 259; Salem Improvement Co. [434] v. McCourt, 26 Or. 93 (41 Pac. 1105); Langley v. Kesler, 57 Or. 291 (110 Pac. 401, 111 Pac. 246). 3. Considering the principal question presented hy this appeal, the rule is settled in Oregon that, when the holder of a realty mortgage cancels it in ignorance of the existence of an intermediate lien upon the premises, though the charge thus imposed upon the land is of record, a court of equity in a suit instituted for that purpose, will, in the absence of intervening rights, restore the original lien and give it priority: Pearce v. Buell, 22 Or. 29 (29 Pac. 78); Kern v. Hotaling, 27 Or. 205 (40 Pac. 168, 50 Am. St. Rep. 710); Capital Lumbering Co. v. Ryan, 34 Or. 73 (54 Pac. 1093); Title G. & T. Co. v. Wrenn, 35 Or. 62 (56 Pac. 271, 76 Am. St. Rep. 454). In the case at bar intervening rights had accrued before the suit to reinstate the mortgage was commenced. Thus Bryan’s bid of $300 upon the execution sale of the lot having been credited on account of his judgment, the two solvent defendants in his action, who are not parties to this suit, could not be affected by any decree that might be rendered herein, and hence that credit cannot he set aside so as to restore the canceled mortgage to its original lien as to them. Their intervening rights have attached and should be protected. The evidence shows that before he executed the mortgage to Sarah Campion, McKenzie secured an abstract of the title to the lot, which abridgment set forth a memorandum of Bryan’s judgment. McKenzie was extremely careless in failing to note the judgment lien upon the land when the foreclosure suit was dismissed. From the cancellation of the mortgage it is reasonably to be inferred that McKenzie and Chase were ignorant of the intervening lien. [435] By compelling a payment to Bryan of the amount of his bid and interest, and the sheriff’s costs, the sums awarded bim as a prior lien upon a foreclosure of the original mortgage, substantial equity has been meted out, and, such being the case, the decree is affirmed. AeEIBMED. Me. Justice Bean, Me. Justice Habéis and Me. Justice Benson concur.