Miller v. Daniel ( 1880 )

Opinion by

Judge Hines :

To appellee’s allegation of fraud in the execution of the mortgage appellant denies the fraud and alleges that it was executed to secure him in advances which he was thereafter to make to Haycraft, and that on the faith of the mortgage security he supplied Haycraft with goods to the value of $54.55. To this answer no response.was filed, and therefore it stands admitted that the mortgage was executed in good faith to secure these advances, while it is also' admitted that the statement on the face of the mortgage that it was to secure the sum of $150 that day advanced is in fact untrue.

But unless this statement in the mortgage was inserted for a fraudulent purpose, or unless appellee was misled by it to his prejudice, it cannot affect the validity of appellant’s lien for the advances actually made on the faith of the mortgage. The form of this mortgage to secure future advances is usual, and has frequently received the sanction of the courts. Sec. 374, 1 Jones on Mortgages. There is nothing in this record to show that the mortgage was either actually or constructively fraudulent. The court erred in postponing appellant’s claim to that of appellee, — as between them appellee’s claim should have been subordinate.

Judgment reversed and cause remanded with directions for further proceedings consistent with this opinion.