Citation Numbers: 164 A. 870, 112 N.J. Eq. 517
Judges: FALLON, V.C.
Filed Date: 3/13/1933
Status: Precedential
Modified Date: 7/5/2016
The proofs herein do not establish complainant's claim that the conveyance by the defendants Snyder to the defendant Kearny Heights Building and Loan Association of the Snyders' equity of redemption in and to the property in question effected a merger of the mortgage held by said association with the fee acquired by it by the deed of conveyance and extinguished said defendant's mortgage debt whereby the complainant's second mortgage on said property became a paramount lien. Complainant's mortgage bears date July 5th, 1929, and recites that it is second and subordinate to the mortgage held by the Kearny Heights Building and Loan Association bearing date April 13th, 1928. Complainant is now in the same position with respect to her mortgage lien on tracts A and B as she was when her mortgage was placed thereon. The deed to said association relates only to tract B. Merger is not favored in equity and will not be decreed except to effect a fulfillment of intention of parties, and will not be effected if thereby the mortgagee to whom a deed of conveyance is given is injured when holding a mortgage to be a subsisting lien will not be detrimental to the rights of others. Simultaneous with the delivery of the deed the Snyders assigned to the grantee certain shares of stock of the Kearny Heights Building and Loan Association. Neither the shares of stock or the association's mortgage were canceled. It was testified by the secretary of the association that such remained *Page 519
uncanceled so as to keep the association's mortgage alive. It cannot reasonably be urged that the association would take title to property in question herein upon which it held a first mortgage lien, with the intention of having its mortgage merge in the fee. A presumption of an intention to keep the mortgage security alive may reasonably be inferred from the fact that it is for the interest of the grantee to do so in order to retain priority over complainant's mortgage. The association by its answer and counter-claim denies that there was any intention to merge its mortgage with the fee. When the holder of a mortgage takes a conveyance of the equity of redemption, a court of chancery will consider the mortgage as subsisting when the purposes of justice require it. In Mueller v. Morrell,