Mortgage & Contract Co. v. First Mortgage Bond Co.

Michigan Supreme Court

Mortgage & Contract Co. v. First Mortgage Bond Co.

240 N.W. 39, 256 Mich. 451, 1932 Mich. LEXIS 715

CourtMichigan Supreme Court

DecidedJanuary 4, 1932

DocketDocket No. 11, Calendar No. 35,761.

StatusPublished

Cited by7 cases

This text of 240 N.W. 39 (Mortgage & Contract Co. v. First Mortgage Bond Co.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Mortgage & Contract Co. v. First Mortgage Bond Co., 240 N.W. 39, 256 Mich. 451, 1932 Mich. LEXIS 715 (Mich. 1932).

Pincite

Opinion

Fead, J.

Plaintiff held a second mortgage on real estate, expressly made subject to the first mortgage, *452 and containing the usual provision that if the mortgagor did not pay taxes, the mortgagee might pay them and the amount, with interest at 7 per cent., should “constitute a further lien upon said premises under this mortgage.” Plaintiff paid taxes, foreclosed the mortgage by advertisement, bid in the property, and the sale price was applied upon principal, interest, expenses, and taxes, covering the latter item in full with interest at 7 per cent. There 'was no redemption.

Before the redemption period had expired, the first mortgage, running to defendant and one Stoker as trustees, was foreclosed by advertisement and the premises purchased by defendant personally. There has been no redemption and the period therefor has expired.

This suit is to decree the taxes, paid by plaintiff, with interest at 5 per cent., a first lien upon the premises and to foreclose the lien upon the theory that it is superior to the first mortgage, under Noeker v. Howry, 119 Mich. 626.

Foreclosure of a mortgage extinguishes it. Dunitz v. Woodford Apartments Co., 236 Mich. 45. Plaintiff’s lien for taxes existed in connection with and because of the mortgage, and discharge of the mortgage discharged the lien. Vincent v. Moore, 51 Mich. 618; Wood v. Button, 205 Mich. 692. The lien, having been discharged, could not be revived. The case presents the added fact that the purchase price on foreclosure of the second mortgage was applied to full payment of the taxes. The effect was the same as though a stranger had bought the property on foreclosure and the taxes had been paid plaintiff out of the purchase money.

Decree dismissing bill affirmed, with costs.

Clark, C. J., and McDonald, Potter, Sharpe, North, Wiest, and Butzel, JJ., concurred.

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Fead, J.

Plaintiff held a second mortgage on real estate, expressly made subject to the first mortgage, *452 and containing the usual provision that if the mortgagor did not pay taxes, the mortgagee might pay them and the amount, with interest at 7 per cent., should “constitute a further lien upon said premises under this mortgage.” Plaintiff paid taxes, foreclosed the mortgage by advertisement, bid in the property, and the sale price was applied upon principal, interest, expenses, and taxes, covering the latter item in full with interest at 7 per cent. There 'was no redemption.

Before the redemption period had expired, the first mortgage, running to defendant and one Stoker as trustees, was foreclosed by advertisement and the premises purchased by defendant personally. There has been no redemption and the period therefor has expired.

This suit is to decree the taxes, paid by plaintiff, with interest at 5 per cent., a first lien upon the premises and to foreclose the lien upon the theory that it is superior to the first mortgage, under Noeker v. Howry, 119 Mich. 626.

Foreclosure of a mortgage extinguishes it. Dunitz v. Woodford Apartments Co., 236 Mich. 45. Plaintiff’s lien for taxes existed in connection with and because of the mortgage, and discharge of the mortgage discharged the lien. Vincent v. Moore, 51 Mich. 618; Wood v. Button, 205 Mich. 692. The lien, having been discharged, could not be revived. The case presents the added fact that the purchase price on foreclosure of the second mortgage was applied to full payment of the taxes. The effect was the same as though a stranger had bought the property on foreclosure and the taxes had been paid plaintiff out of the purchase money.

Decree dismissing bill affirmed, with costs.

Clark, C. J., and McDonald, Potter, Sharpe, North, Wiest, and Butzel, JJ., concurred.

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Bluebook (online)

240 N.W. 39, 256 Mich. 451, 1932 Mich. LEXIS 715, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mortgage-contract-co-v-first-mortgage-bond-co-mich-1932.

Opinion

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