Mechanics' Bank v. First National Bank of McComb City
Mechanics' Bank v. First National Bank of McComb City
Opinion of the Court
delivered the opinion of the court.
This case involves controversy as to priority of liens given by certain deeds of trust covering certain real estate in Me Comb City. One Owens and wife executed four deeds of trust on the same property. The first, deed of trust to McColgan Building & Loan Association is recognized by all parties to' this litigation as a prior-lien; there is an agreement to pay the balance due on
“That whereas the said' parties of the first part are indebted to party of the third- part in the sym of two hundred and seventeen dollars and eighty cents on note of even date; and whereas, the said parties of the first part have agreed to secure the payment of said indebtedness as also any further amounts that may be advanced and not mentioned herein, and any and all indebtedness that is or may become due and all renewals or extensions of notes evidencing the amounts or amount secured herein;” and “in trust, however, that if the parties of the first part shall on or before May 29, 1916, pay what may be due said party of the third part for money loaned and advanced and all other indebtedness in this deed of trust,” etc.
The second deed of trust given Mechanics’ Bank has, among other provisions, the following clause:
*449 “This deed of trust does not cancel any lien or trust deed held by the third party against the first party, but same remains in full force and effect.”
When Furley accepted his deed of trust from Owens and wife dated September 30, 1915, and had the same recorded the following day, the records in the chancery clerk’s office of course did not disclose the existence of -any indebtedness to appellant, the Mechanics’ Bank, except the note of two hundred and seventeen dollars and ■eighty cents, secured by deed of trust executed in May, 1915, payable in May, 1916. At that time no further .advances had been made. In addition to the promissory note given Furley as a part of the purchase price of the stock of goods, it appears that Owens was to make a ■cash payment, and he made application to the Mechanics ’ Bank for three hundred and seventy-five dollars as a part of the cash payment to Furley for said stock. Furley did not know that the Mechanics’ Bank intended to take any other deed of trust on the property involved, and the bank did not know that Furley intended to take himself a deed of trust on the same property. These are the facts as found by the chancellor, and the proof justifies the conclusion which he reached. The First National Bank, in taking an assignment of the Furley deed of trust, did not know that the Mechanics’ Bank was anticipating making a further loan on the security mentioned, and under the facts as found by the chancellor the First National Bank accepted an assignment of this deed of trust and note without any knowledge ■except that disclosed by the records. The question is, then, under the records and the notice imparted thereby, Who has priority? We conclude that appellant is not in position to treat the second loan of three hundred and ■eighty-nine dollars to Owens as an advancement under its first deed of trust. Appellant in making this second loan took two notes, both of which were to mature before the due date of the indebtedness secured by its
Affirmed.
Reference
- Status
- Published
- Syllabus
- 1. Mortgages. Priorities. Where there were three successive trust deeds at different dates upon the same property, all recorded at the time they were made, the first and third trust deeds being given to the same bank and the second trust deed to another party, the bank holding the • first and third trust deeds was not entitled to have the third trust deed take precedence of the second trust deed on the theory that the loan, secured by the third trust deed was in fact but an advance under the first trust deed which in terms secured future advances, where it appeared that both creditors secured by trust deeds had no notice except from the records, and notwithstanding the third trust deed referred to the first, the bank in making the loan secured by the third trust deed not having any agreement either verbal or written that the note secured thereby should be secured by the first trust deed. 2. Same. Under the facts in this case the taking of the first and third trust deeds were not at all part of the saíne business, but wholly separate and distinct agreements, having no possible connection one with the other.