PATON'S DIGEST 149, 186 Pac. 831; Frye v. State Bank, 11 Ill. 367; Brinkmeyer v. Browneller, 55 Ind. 487; Finlayson v. Crooks, 47 Minn. 74, 49 N. W. 398; Heintze v. Bentley, 34 N. J. Eq. 562; Scheurer v. Brown, 73 N. Y. Supp. 877; Seaman v. Fleming, 7 Rich. Eq. (S. C.) 283; Ripley v. Harris, Fed. Cas. No. 11,853; Union Bank of Scotland v. Scotland Nat. Bank, 12 App. Cas. 53. structive notice is sufficient for this purpose and the Conrecording of the junior encumbrance will charge him with such notice. 27 Cyc. 1180; Frye v. State Bank, 11 I. 367; Spader v. Lawler, 17 Ohio 371; Parker v. Jacoby, 3 Grant (Pa.) 300. From this statement of the principles applicable to mortgages or deeds of trust covering future advancements, it is clear that the instrument should specify the maximum amount conterplated to be made by way of future advancements; and, further, that it would not be safe to make any further advancements without a search of the records to ascertain if there are any junior liens extant, in states where their recordation would be constructive notice. Jones on Mortgages (7th ed.), § 372) unless the making (See of such advancements were obligatory, and not optional, under the terms of the mortgage or deed of trust. (1924.) 3242a. Mortgage covering contingent liabilities-Loss sustained by bank as mortgagee in discounting notes of mortgagor. We have been buying notes from a customer of ours (M. V.) who was in the farm implement business. He indorsed the notes and guaranteed payment of same. The notes all bore interest from date, and we bought them at the face value, giving him credit for same. Last April we realized that he was becoming financially embarrassed and at that time he offered us some notes for sale that were of a doubtful nature and as we already had several notes that were doubtful we insisted on additional security. He then gave us a mortgage on his farm which read as follows: "This mortgage is given to secure the X Bank for any loss which may be established and which said bank may sustain by and in discounting any loans' for said M. V." In July this customer's affairs were placed in the hands of a receiver. The receiver now has brought suit to set aside this mortgage, claiming that it is a fake mortgage as it does not cover anything specific. We have sued several of the parties on the notes supposed to be covered by this mortgage and have established a loss. Kindly give us your opinion as to whether or not this mortgage holds good. Opinion: A mortgage may be given as security for an unliquidated claim, or for whatever sum may be due from the mortgagor to the mortgagee at a given time, or for all and every kind of indebtedness which may exist between the parties or be thereafter contracted, without any specification or limitation as to amount; and in such cases it may be enforced for whatever sum the holder of the mortgage may prove to be due and payable. 27 Cyc. 1059; Anglo-Californian Bank v. Cerf, 147 Cal. 384, 81 Pac. 1077; Chambers v. Prewitt, 172 Ill. 615, 50 N. E. 145; Wall v. Boisgerard, 11 Smedes & M. (Miss.) 574; Commercial Bank v. Weinberg, 25 N. Y. Supp. 235, (holding that a mortgage conditioned to pay "all indebtedness of every name and nature, now incurred or to be hereafter incurred, or which is now due or may hereafter become due" from the mortgagor to the mortgagee, (a bank) includes the mortgagor's liability as indorser or surety for others, and is not restricted by the use of the word "indebtedness" to his own debts); Hess v. Anger, 53 Utah 186, 177 Pac. (1918) 232, holding that a deed, when intended as a mortgage, may be given to secure an unliquidated claim to whatever indebtedness may thereafter be contracted between the parties under it. Holley v. Carry, 58 W. Va. 70, 51 S. È. 135. The case submitted would seem to be "on all fours" with Commercial Bank v. Weinberg, 25 N. Y. Supp. 1976 235, set forth supra, so far as the mortgage itself is concerned. But this mortgage might be set aside as a preference in violation of the Bankruptcy Act. That Act provides that "a person shall be deemed to have given a preference if, being insolvent, he has, within four months before the filing of the petition, or after the filing of the petition and before the adjudication, procured or suf fered a judgment to be entered against himself in favor of any person, or made a transfer of any of his prop erty, and the effect of the enforcement of such judg ment or transfer will be to enable any one of his credi tors to obtain a greater percentage of his debt than any other of such creditors of the same class." Bankr. Act, § 60, subd. a.; Stockgrowers' State Bank v. Corker, 220 Fed. 614; Lynch v. Bronson, 80 Conn. 566, 60 Atl. 538, holding that the test of a preference is whether the person, while insolvent, performed one of the acts described within the time prescribed, and with the effect stated; and the intent of the debtor is material only in ascertaining whether the preference is voidable. However, in order that a payment or transfer shall be voidable as a preference, it is necessary that the debtor should have been insolvent at the time that it was made, (Sheppard-Strassheim Co. v. Black, 211 Fed. 643) or, in case the transfer is made by an instrument required by the state law to be registered or recorded, at the time of such registering or recording. McElvain v. Hardesty, 169 Fed. 31. In determining whether a preference was given or suffered within four months before the filing of the petition in bankruptcy it is proper to exclude the day on which the transaction occurred and to include the day on which the petition was filed, (Whitley Grocery Co. v. Roach, 115 Ga. 918, 42 S. E. 282) and the computation should be made according to the calendar months and not counting the days. Kelly v. Skaggs, 90 Ill. App. 543. The facts are not sufficiently recited in detail in the instant case to enable one to reach a conclusion on the question of preference raised supra. (1922.) 3243a. Extended first mortgage retains priority over second mortgage unless outlawed.-A savings bank holds a note secured by first mortgage on property falling due February 1, 1917, and a second mortgage has been given thereon which falls due on the same date. The bank desires to extend its note and first mortgage for a period of three years from its due date. asks (1) whether, if it executes and records a written The bank instrument reciting that the mortgage has been extended in accordance therewith, it will lose its position as first lien holder and the second mortgage become a first lien; (2) whether in case the bank's mortgage became outlawed it could have an extension agreement executed and still hold its first mortgage lien even though there were other liens secondary thereto which had not be come outlawed. Opinion: 1. The rule is well recognized that, where a first mortgagee grants to the mortgagor an extension of time for payment of the mortgage debt, but without any intended or actual discharge of the mortgage or taking a new one, and without any fraudulent intent as regards the second mortgagee, the latter cannot claim to be preferred to the first mortgage merely on the ground of such extension. 27 Cyc. 1222; Fry v. Shehee, 55 Ga. 208; Kraft v. Holzmann, 206 Ill. 548, 69 N. E. 574; French v. Poole, 83 Kan. 281, 111 Pac. 488. It has been further held that where, as in the instant case, a note is also given in connection with the mortgage, the mortgage so given would continue to be a first lien until the note became barred by the statute of limitations. Wittacre v. Fuller, 5 Minn. 508, 5 Gilfillan 401; Farmers' Bk. v. Mut. Assur. Soc., 4 Leigh (Va.) 69; Sheridan First Nat. Bk. v. Citizens St. Bk., 11 Wyo. 32. 70 Pac. 726, in which latter case it was held that the taking of a new note in place of the one originally given does not generally operate as an extinguishment of the lien of the mortgage securing the debt, unless it is the as actual and express intention of the parties; that the mere extension of the time of payment of the debt by a mortgagee in no way impairs the security even against subsequent incumbrances, although the extension may have been made by a renewal of the mortgage. 2. In the early case of Lord v. Morris, 18 Cal. 482, it was held that where a note is secured by mortgage upon real property, and subsequently, after the remedy on the note is barred by the statute, the mortgagor executes a second mortgage to a third party, such third party can interpose a plea of the statute of limitations in a suit to foreclose the first mortgage, and thus acquire priority for his subsequent mortgage; and this, even though the mortgagor had, after the execution of the second mortgage and after the note was barred, indorsed the first note and renewed, revived and agreed to pay the same. See, also, Wood v. Goodfellow, 43 Cal. 185; Branderstein v. Johnson, 140 Cal. 29, 143 Pac. 538; Redondo Improv. Co. v. O'Shaughnessy, 168 Cal. 325. (1916.) EXTENSION OF TIME OF PAYMENT OF MORTGAGE (For extension and renewal of note as release of collateral security, see title Pledge and Collateral.) 3245a. Methods of extending unpaid mortgage security. Advice is asked as to which of the following methods of taking care of a matured real estate mortgage affords the greatest protection: 1. "To execute and record an extension of mortgage. (Will the filing of such an extension allow previously filed liens, mortgages, etc., which are of record subsequent to the first mortgage to take precedence thereto?)" 2. "To allow the original first mortgage and note to remain past due. (How long can a matured mortgage retain its security and precedence?)" 3. "To have executed a new mortgage and note. (What is the proper method of negotiating the renewal to insure the mortgagee, absolutely, against the filing of some lien or other mortgage between the filing of release and new indenture?)" Opinion: 1. An agreement by a mortgagee to extend the time for payment of the debt secured by a mortgage, whether indorsed on the instrument or otherwise evidenced, will continue the lien of the mortgage and all his rights and remedies thereunder for the new period. Lent v. Morill, 25 Cal. 492; Benneson v. Savage, 130 Ill. 352, 22 N. E. 838; Cook v. Gilchrist, 82 Iowa 277, 48 N. W. 84; Griffin v. Walter, 74 Mich. 1, 41 N. W. 843; Eby v. Ryan, 22 Neb. 470, 35 N. W. 225; Veerhoff v. Miller, 51 N. Y. Supp. 1048, 30 App. Div. 355; Hinton v. Ferrebee, 107 N. C. 154, 12 S. È. 235; Union Cent. L. Ins. Co. v. Bonnell, 35 Ohio St. 365; Cleveland v. Martin, 2 Head (Tenn.) 128; Montague County v. Meadows, 28 Tex. Civ. App. 256; Warner v. Conn. Mut. Life Ins. Co., 109 U. S. 357, 3 Sup. Ct. Rep. 221, 27 L. ed. 962. 2. Duration of Lien. The lien of a mortgage, once attached to land, continues in force until the mortgagee has received payment or satisfaction of the debt secured (Schroeder v. Wolf, 127 Ill. App. 506; Morse v. Clayton, 13 Sm. & M. (Miss.) 373; Rice v. Dewey, 54 Barb. (N. Y.) 455) unless he previously releases it, or a merger takes place by his acquisition of the legal title to the property mortgaged. (McMillan v. McMillan, 184 Ill. 230, 56 N. E. 302; Hazle v. Bondy, 173 Ill. 302, 50 N. E. 671; Mutual Mill Ins. Co. v. Gordon, 121 Ill. 366, 20 Ill. App. 559), or until the debt has become barred by the statute of limitations. In Wisconsin this period would be twenty years. (Wis. Stat. (1921), § 4220. See also Wells v. Scanlon, 124 Wis. 229, 102 N. W. 571.) 3. Effect of taking new mortgage. The execution of a new mortgage on the same property to secure the same debt covered by the old mortgage will release and discharge it if intended by the parties to operate as a payment or satisfaction, or to cancel one security to substitute the other. (Williamson v. Strong, 136 Cal. XIV, 68 Pac. 484, 6 Cal. Unrep. Cas. 893; Walters v. Walters, 73 Ind. 425; Friend v. Yahr, 126 Wis. 291, 104 N. W. 997, 1 L.R.A. (N.S.) 891 and note; Brown v. Bass, 4 Wall. (U. S.) 262, 18 L. ed. 330). Certainly it is not discharged if the purpose of the parties was merely to give and receive an additional or cumulative security (Dillon v. Byrne, 5 Cal. 455; Whitney v. Traynor, 74 Wis. 289, 42 N. W. 267) or to renew the loan or extend the time for its payment, in which case the lien of the original mortgage is simply continued, without interruption, by and under the new mortgage. It was held, Gerb v. Reynolds, 35 Minn. 331, that, if the holder of a mortgage takes a new mortgage as a substitute for a former one, and releases the latter in ignorance of the existence of an intervening lien upon the mortgaged premises, equity will, in the absence of some disqualifying circumstance, restore the lien of the first mortgage. (1919.) 3248a. Surrender of old note for extension agreement executed by mortgagor. Extension Agreement and Coupons which mortgage deed was given to secure the payment of a Note or Bond for the sum of $. (of which amount §........ has been paid), payable 19., to the order of ...... upon which Note or Bond there remains unpaid the sum of $.. of principal money, and in consideration of the extension of the time for the payment thereof for the term of years from maturity, hereby agree to pay interest upon said principal sum from the day whereon the same. by the terms of said Note or Bond becomes due, at the rate of per cent. per annum, payable annually, for and during said term of extension, according to the tenor and effect of the extension coupons hereto attached; both principal and interest to be paid, when due, at and in case of default in payment of any of said extension coupons, or in case of non-payment of taxes or breach of any of the covenants contained in said Mortgage Deed, it shall be optional with or assigns to declare said principal sum immediately due and payable. Witness: .. Above is an extension agreement on a real estate mortgage that has become due. Can we surrender the old note and have this agreement take its place, and the mortgage be a lien as before? Opinion: A mortgage intended to secure a particular debt is valid in equity for that purpose, whatever form the debt may assume, if it can be traced; hence the mortgage will cover any renewals of the note, bond, or other evidence of the original debt secured. Salem Nat. Bank v. White, 159 Ill. 136, 42 N. E. 312; Freeburg v. Eksell, 123 Iowa, 464, 99 N. W. 118; Linton v. Purdon, 9 Roh. (La.) 482; Coney v. Laird, 153 Mo. 408, 55 S. W. 96: Wachovia Nat. Bank v. Ireland, 122 N. C. 571; Patterson v. Johnston, 7 Ohio, 225; Jones v. New York Guaranty &c. Co., 101 U. S. 622, 25 L. ed. 1030. See also London &c. S. F. Bank v. Bandmann. 120 Cal. 220, 52 Pac. 583. So where the debt secured by the mortgage has been reduced by partial payments, a new note given in settlement of the balance remaining due will be equally covered by the security. Bray v. First Ave. Coal Min. Co., 148 Ind. 599. 47 N. E. 1073; Seymour v. Darrow, 31 Vt. 122; Inglis v. Gilchrist, 10 Grant, Ch. (Up. Can.) 301. The lien of a mortgage, once attached to land, continues in force until the mortgagee has received payment or satisfaction of the debt secured. (McMillan v. McMillan, 184 Ill. 230, 56 N. E. 302; Hazle v. Bondy, 173 Ill. 302, 50 N. E. 671) or a merger takes place by his acquisition of the legal title to the property mort gaged, (Gage v. McDermid, 150 Ill. 598, 37 N. E. 1026) or until the debt has become barred by the statute of limitations. Murray v. Emery, 187 Ill. 408, 58 N. E. 327; Jackson v. King, 9 Kan. App. 160, 58 Pac. 1013; Baltimore & O. R. Co. v. Trimble, 51 Md. 99; Klaus v. Moore, 77 Miss. 701; Ross v. Mitchell, 28 Tex. 150. (1922.) 3250a. Renewal of mortgage note without executing new mortgage-Where description in new note does not correspond to mortgage.-A note is secured by a mortgage and, on becoming due, is renewed without making out a new mortgage. The old note is cancelled and given to the maker. Now we have a new note that does not correspond to the description in the mortgage and pinned to it a mortgage that secures a debt that has been marked as cancelled. Without doubt the best way would be to hold the original note as collateral to the renewal. However, in case that was not done, would it have any affect on the rights of the parties? What general remarks would you make on such a situa tion? Opinion: The modern doctrine being that the debt is the principal thing and the mortgage only an incident or accessory to it, it follows that whatever extinguishes the debt will also discharge the mortgage. Sherman v. Sherman, 3 Ind. 337; Spire v. Spire, 104 Kan. 501, 180 Pac. 209; Armitage v. Wickliffe, 12 B. Mon. (Ky.) 488; Schexnailder v. Fontenot, 147 La. 467, 85 So. 207; Bernheim v. Pessou, 143 La. 609, 79 So. 23; Martin v. Goldsborough, 25 Atl. (Md.) 420; Hastings v. Hastings, 110 Mass. 280; Atwater v. Underhill, 22 N. J. Eq. 599; Weeks v. Weeks, 16 Abb. N. Cas. (N. Y.) 143; Jackson v. Stackhouse, 1 Cow. (N. Y.) 122. But the debt and the mortgagor's liability for it are not the same in law. Hence the mortgage is not discharged if it is the intention of the parties merely to release the mortgagor's personal liability for it and not to extinguish the debt. Barth v. Severson, 191 Iowa, 770, 183 N. W. (1921) 617, (holding that the validity of foreclosure proceedings is not affected by a release of a judgment debtor from personal liability as indorser of a note secured by the mortgage; such release amounting merely to an election of the judgment creditor to proceed strictly in rem and to waive his rights to a claim in personam; Donnelly v. Simonton, 13 Minn. 301; Bentley v. Vanderheyden, 35 N. Y. 677; Harrell v. First Nat. Bank, 121 Ga. App. 159, 93 S. E. 1018; Bensen v. Reger, 186 Iowa, 19, 168 N. W. (1918) 881. A discharge in bankruptcy or insolvency, or a release from arrest on civil process, may set the mortgagor free from the payment of the debt, without in any way affecting the lien of the mortgage given to secure it. Luning v. Brady, 10 Cal. 265; Begein v. Brehm, 123 Ind. 160, 23 N. E. 496: Burtis v. Wait, 33 Kan. 478, Pac. 783: Cary v. Prentiss, 7 Mass. 63; Bush v. Cooper, 26 Miss. 599. And although the mortgagee may lose the benefit of an indorsement on the mortgage note by his neglect or delay, this does not necessarily release the maker or discharge the mortgage; Kerr v. Wells, 2 La. Ann. 832; Hilton v. Catherwood, 10 Ohio St. 109; Mitchell v. Clark, 35 Vt. 104. The rule is the same as to a release given to one of two joint makers of the mortgage note, on his payment of a part of the debt. Henshaw v. Homeland Co. 177 Cal. 381, 170 Pac. (1918) 826; Walls v. Baird, 91 Ind. 429. The surrender of the note, bond, or other evidence of the debt to the mortgagor, or his obtaining possession of it otherwise, does not necessarily extinguish the mortgage or even prove payment; that will depend on the purpose with which it is placed in his hands and the title by which he holds it, whether for himself or the mortgagee. Bourland v. Wittick, 38 Ark. 167; Norton's Succession, 10 La. Ann. 36; Dixfield v. Newton, 41 Me. 221; Killops v. Stephens, 66 Wis. 571, 29 N. W. 390. Where a first mortgagee grants to the mortgagor an extension of the time for payment of the mortgage debt, but without any actual or intended discharge of the mortgage or taking a new one, and without any fraudulent intent as regards the second mortgagee, the latter cannot claim to be preferred to the first mortgage merely on the ground of such extension. Fry v. Shehee, 55 Ga. 208; Kraft v. Holzmann, 206 Ill. 548, 69 N. E. 574; Whittacre v. Fuller, 5 Minn. 508; Farmers Bank v. Mut. Assur. Soc., 4 Leigh (Va.) 69; First Nat. Bank of Sheridan v. Citizens State Bank, 11 Wyo. 32, 70 Pac. 726. (1923.) 3251a. Extension of partly paid note mortgage for original amount without renewing mortgage.-A gave us a mortgage on real estate in 1922 and in the fall of the same year, paid some of the note and desired to renew the note and bring it back to the original amount without renewing the mortgage. Can we do this, with safety, presuming there is no second mortgage on the property or should we renew the mortgage to better assure our lien. Opinion: An agreement by a mortgagee to extend the time for payment of the debt secured by a mortgage, whether indorsed on the instrument or otherwise evidenced, will continue the lien of the mortgage and all his rights and remedies thereunder for the new period. Warner v. Connecticut Mut. L. Ins. Co., 109 U. S. 357. 27 L. ed. 962, 3 Sup. Ct. Rep. 221; Lent v. Morrill, 25 Cal. 492; Benneson v. Savage, 130 Ill. 352; Cook v. Gilchrist, 82 Iowa, 277; Griffin v. Walter, 74 Mich. 1; Eby v. Ryan, 22 Neb. 470; Veerhof v. Miller, 51 N. Y. Supp. 1048; Hinton v. Ferrebee, 107 N. C. 154; Union Cent. L. Ins. Co. v. Bonnell, 35 Ohio St. 365; Cleveland v. Martin, 2 Head (Tenn.) 128; Montague County v. Meadows, 28 Tex. Civ. App. 256. The lien of a mortgage, once attached to land, continues in force until the mortgagee has received payment or satisfaction of the debt secured, (Schroeder v. Wolf, 127 Ill. App. 506: Morse v. Clayton, 13 Smedes & M. (Miss.) 373; Rice v. Dewey, 54 Barb. (N. Y.) 455) unless he previously releases it, or a merger takes place by his acquisition of the legal title to the property mortgaged, (McMillan v. McMillan, 184 Ill. 230; Hazle v. Bondy, 173 Ill. 302) or until the debt has become barred by the statute of limitations. A In the particular case presented as I understand, a mortgage is given to secure a note, of say $5000. The borrower pays $1000 thereon and then borrows back the $1000, bringing it back to its original amount. partial payment of the debt covered by the mortgage, and then an additional loan bringing the amount of the debt back to the full amount secured by the mortgage, is referred to in Jones on Mortgages, 7th ed. § 943. In view of the fact that the mortgage was executed to secure a debt of $5000, say, and that the lien of a mortgage, once attached to land, continues in force until the mortgage has received payment in full or other satisfaction of the debt secured, I fail to see the necessity of the execution of a new mortgage where the mortgagor and mortgagee desire, after reduction of the debt secured, to again increase the debt to the full amount secured by the mortgage, where there are no intervening mortgages or other encumbrances on the land. The mortgage stands of record as a lien upon the land described to the extent of $5000, and is notice to all the world, including creditors and subsequent purchasers and encumbrancers. The recordation of the mortgage is constructive notice to all the world of the lien upon the land, while the payment of $1000 upon the debt secured is matter known only to the parties, and a second loan of the $1000, restoring the amount of the loan to the figures for which debt the mortgage is security, surely cannot impair or invalidate the mortgage security. But this would not likely avail the first mortgagee as against an intervening mortgagee, for payment on a mortgage is a pro tanto discharge. In the instant case if the parties so desire there would be no objection to the execution of a new mortgage, since the rule is well settled that the entering of satisfaction of a mortgage and taking a new one, when designed by the parties to be merely a continuation of the first mortgage, and when the two acts are practically simultaneous or parts of the same transaction, is not an extinguishment of the mortgage, but a renewal thereof, and does not give priority to an intervening judgment or mortgage creditor of the mort gagor. Higman v. Humes, 127 Ala. 404, 30 So. 733; Roberts v. Doan, 180 Ill. 187, 54 N. E. 207; St. Croix Lumber Co. v. Davis, 105 Iowa, 27, 74 N. W. 756; Byers v. Chase, 102 Neb. 386, 167 N. W. 405; Van Duyne v. Shann, 41 N. J. Eq. 311, 7 Atl. 429; Flagler v. Malloy, 9 N. Y. Supp. 573; Parker v. Parker, 52 S. C. 382, 29 S. E. 805; Bachman v. Hurtt, 26 Wyo. 332, 184 Pac. 709; Swift v. Kortrecht, 112 Fed. 709; Workingman's Bldg. &c. Ass'n. v. Williams, 37 S. W. (Tenn. 1896) 1019. See 3245. (1924.) 3252a. Substitution of another mortgage for prior mortgage-Question considered whether renewal including interest and taxes is a new mortgage which might lose priority. One of our customers becoming heavily indebted to us, we took a second mortgage on a tract of land owned by him. Our mortgage recited as follows, "This mortgage is second and subject to mortgage executed by John Doe, to secure his note and any renewal or renewals thereof, for $10,000, dated May 1, 1918, due one year after date, with interest at six per cent per annum, payable semi-annually, in favor of Henry Smith, recorded October 30, 1918, in Book 29, page, 27, etc." The estate of Henry Smith, being unaware of our second lien, which was recorded subsequent to their mortgage, took a renewal of their loan, adding thereto accrued interest and taxes, and recorded this new mortgage. They neglected to make a search of title when making the new loan. Will this automatically make our mortgage a first lien, or will the statement given above preclude that? Should we bring suit for foreclosure, will our mortgage take priority over the other, so that we may obtain the land or force them to take up our mortgage? Would you consider there to be a question of ethics involved? Opinion: The holder of a valid lien or encumbrance on land cannot be deprived of his security, nor postponed to junior liens, by any act of his debtor subsequent to the attaching of his lien, to which he is not a consenting party, (Davidson v. Roffy, 180 Pac. (Cal. App. 1919) 830; McDonald v. American Nat. Bank, 146 La. 59, 83 So. 377; Chew v. Md. Farmers' Bank, 2 Md. Ch. 231; Washburn v. Hammond, 151 Mass. 132; Flanagan v. Westcott, 11 N. J. Eq. 264) unless power to do such act was expressly reserved in the mortgage. Sands v. Kaukauna Water Power Co., 115 Wis. 229, 91 N. W. 679. Where a first mortgagee grants to the mortgagor an extension of the time for payment of the mortgage debt, but without any actual or intended discharge of the mortgage or taking a new one, and without any fraudulent intent as regards the second mortgagee, the latter cannot claim to be preferred to the first mortgage merely on the ground of such extension. Fry v. Shehee, 55 Ga. 208; Kraft v. Holzmann, 206 Ill. 548; Whittacre v. Fuller, 5 Minn. 508; Farmers' Bank v. Mutual Assurance Soc., 4 Leigh (Va.) 69; Bachman v. Hurtt, 26 Wyo. 332, 184 Pac. 709. Entering satisfaction of a mortgage and taking a new one, when designed by the parties to be merely a continuation of the first mort gage, and when the two acts are practically simultaneous or parts of the same transaction, is not an extinguishment of the mortgage, but a renewal thereof, and does not give priority to an intervening judgment or mortgage creditor of the mortgagor, (Higman v. Humes, 127 Ala. 404; Dillon v. Byrne, 5 Cal. 455; Roberts v. Doan, 180 Ill. 187; Pouder v. Ritzinger, 119 Ind. 597; St. Croix Lumber Co. v. Davis, 105 Iowa, 27, 74 N. W. 756; Rowe v. Simmons, 14 Ky. L. Rep. 780, 21 S. W. 872; Eggeman v. Eggeman, 37 Mich. 436; Drane v. Newsom, 73 Miss. 422; Van Duyne v. Shann, 41 N. J. Eq. 311; Flagler v. Malloy, 9 N. Y. Supp. 573; Benson v. Maxwell, 10 Sadler (Pa.) 380; Parker v. Parker, 52 S. C. 382; Mass v. Taxquard, 33 Tex. Civ. App. 40; Bachman v. Hurtt, 26 Wyo. 332, 184 Pac. 709; Swift v. Kortrecht, 112 Fed. 709) especially where it is done in good faith, in ignorance of the existence of the intervening lien, and without any intention to release the lien of the mortgage. Wooster v. Cavender, 54 Ark. 153; Sidener v. Pavey, 77 Ind. 241; Drury v. Briscoe, 42 Md. 154; Laconia Sav. Bank v. Vittum, 71 N. H. 465; Hutchinson v. Swartsweller, 31 N. J. Eq. 205; Byers v. Chase, 102 Neb. 386, 167 N. W. (1918) 405; Pearce v. Buell, 22 Or. 29; Upton v. Hugos, 7 S. D. 476, 64 N. W. 523. In the case submitted the "Henry Smith" mortgage does not lose its priority over the second mortgage held by the bank by accepting a renewal mortgage at the date of the maturity of the first mortgage; and if the bank desires to foreclose its mortgage, it will be necessary for it to first satisfy the "Henry Smith" mortgage. In the matter of unpaid interest and taxes which a mortgagee has to pay, provision should be made for them in the mortgage (see 3276a). But it seems that in the matter of taxes, the first mortgagee paying such taxes is able to add this to his claim against the property, and maintain his priority therefor, whether this is provided for in the mortgage or not. Jones on Mortgages (7th ed.) § 1080. But in the matter of unpaid interest, in the absence of provision in the note therefor, the mortgagee would not be able to maintain a priority for the amount. Id. § 1705a. (1922.) 3253a. Substitution or renewal of mortgage-Effect or intervening judgment.-On May 29th, 1919, bank A took a mortgage from B covering certain lands; said mortgage was promptly recorded. On Nov. 20, 1920, C secured a judgment against B on a note. On Feb. 21st, 1922, bank A in order to make this paper eligible as collateral with the war finance corporation, released the mortgage mentioned above, without knowing that C had a judgment against B, and took a new mortgage covering land included in first named mortgage and also 320 acres additional. B paid bank A no money, and the enlarged note and mortgage taken on Feb. 21, 1922, represented the face and interest on note and mortgage dated May 29, 1919, and debts later contracted. judgment of C a prior lien to the subsequent mortgage given to bank A, said mortgage being simply a renewal of the old mortgage? Is judgment of C a prior lien on the 320 acres additional included in the recorded mortgage? Is Opinion: Entering satisfaction of a mortgage and taking a new one, when designed by the parties to be merely a continuation of the first mortgage, and when the two are practically simultaneous or parts of the same transaction, is not an extinguishment of the mortgage, but a renewal thereof, and does not give priority to an intervening judgment or mortgage creditor of the mortgagor, (27 Cyc. 1222; Higman v. Humes, 127 Ala. 404, 30 So. 733; Roberts v. Doan, 180 Ill. 187, 54 N. E. 207; St. Croix Lumber Co. v. Davis, 105 Iowa, 27, 74 N. W. 756; Drane v. Newsom, 73 Miss. 422, 19 So. 200; Van Duyne v. Shann, 41 N. J. Eq. 311, 7 Atl. 429; Flagler v. Malloy, 9 N. Y. Supp. 573; Parker v. Parker, 52 S. C. 382, 29 S. E. 805; Bachman v. Hurtt, 26 Wyo. 332, 184 Pac. 709) especially where it is done in good faith, in ignorance of the existence of the intervening lien, and without any intention to release the lien of the mortgage. 27 Cyc. 1223; Wooster v. Cavender, 54 Ark. 153, 15 S. W. 192; Drury v. Briscoe, 42 Md. 154; Byers v. Chase, 102 Neb. 386, 167 N. W. (1918) 405; Laconia Sav. Bank v. Vittum, 71 N. H. 465, 52 Atl. 848; Hutchinson v. Swarts weller, 31 N. J. Eq. 205; Barnes v. Camack, 1 Barb. (N. Y.) 392; Pearce v. Buell, 22 Ore. 29, 29 Pac. 78; Upton v. Hugos, 7 S. D. 476, 64 N. W. 523, (where the court said on this point: "Courts of equity will, in a case like the present, keep an incumbrancer alive in accordance with the manifest intention of the parties, when it can be done without injury to innocent third persons. 'When a new PATON'S DIGEST mortgage is substituted in ignorance of an intervening In the case submitted above the mortgage of bank A, dated May 29th, 1919, being duly recorded, is entitled to priority over the judgment of C, rendered Nov. 20, 1920, and duly docketed. And since the mortgage executed to bank A, under date of Feb. 21, 1922, is but a renewal or extension of its mortgage of May 29, 1919, it still retains its priority of lien over the judgment held by C with respect to the real estate covered by the first mortgage. But with respect to the 320 acres of land acquired by the mortgagor subsequent to the execution of the first mortgage, and also subsequent to the rendition of the judgment held by C, the judgment held by C has priority of lien over the mortgage executed Feb. 21, 1922, for the lien of such judgment attached as soon as the title of the judgment debtor was perfected, which antedated the execution of the second or renewal mortgage. (1924.) NOTE. For A.L.R. annotation entitled "Discharge of mortgage and taking back of new mortgage as affecting lien intervening between old and new mortgage," see 33 A.L.R. 149. 3254a. Priority between judgment and mortgage.-We would like to know what our position is in the following matter: We hold the personal notes of a party without security, who was the owner of 400 acres of land. This land was mortgaged for $10,000 which was a first lien and a second mortgage of several thousand dollars. The party failed to take care of the second mortgage, and the holder of the second mortgage, who was also the holder of the first mortgage, brought suit for foreclosure under the second mortgage and obtained a judgment and just before the expiration of the eighteen months' period for redemption the owner of the land redeemed and paid off the second mortgage and all costs. He borrowed the money to do this and gave a second mortgage on the land as security therefor. After foreclosure proceedings had been begun on the second mortgage, we sued him on his personal notes and secured a judgment which judgment was transferred to the District Court in which the foreclosure action was brought. What we would like to know is-what rights have we under our judgment and whether or not our rights supersede the second mortgage, and if so, what action we should take to realize on our judgment. We secured our judgment several months before the land was redeemed. Opinion: By the common law, the priority of liens, whether by mortgage or judgment, is governed exclusively by the date of their acquisition, the first in point of time being first in right. 27 Cyc. 1173; Central Trust Co. v. Union Terminal Co., 253 Fed. 292; Trapnall v. Richardson, 13 Ark. 543; Marshall v. Hodgkins, 99 Ga. 592. 27 S. E. 748; Tyrrell v. Ward, 102 Ill. 29; Paxton v. Sterne, 127 Ind. 289, 26 N. E. 557; Weare v. Williams, 85 Iowa, 253, 52 N. W. 328; Markson v. Buchan, 33 Kan. 739, 7 Pac. 578; Chandler v. Parsons, 100 Mich. 313, 58 N. W. 1011; Marlow v. Johnson, 31 Miss. 128; Laughlin v. Gardiner, 104 Neb. 237, 178 N. W. 270; Tichenor v. Tichenor, 45 N. J. Eq. 664; People v. Bacon, 99 N. Y. 275, 2 N. E. 4; McKenzie v. Bismarck Water Co., 6 N. D. 361, 71 N. W. 608; Porter v. Barclay, 18 Ohio St. 546; Clarke-Woodward Drug Co. v. Hot Lake Sanitorium Co., 88 Or. 284, 169 Pac. 796; Fleek v. Zillhaver, 117 Pa. St. 213, 12 Atl. 420; Blose v. Bear, 87 Va. 177, 12 S. E. 294, 11 L.R.A. 705 and note). Under the statutes on this subject, if a judgment is duly docketed, or otherwise made a matter of public record by compliance with the forms required to give it a lien on land, before the recording of a mortgage on the same vice versa. 1980 land made by the judgment debtor, the lien of the judgment will be superior to that of the mortgage, and 27 Cyc. 1174; Coley v. Altamaha Fertilizer Co., 147 Ga. 150, 93 S. E. 90; Warner v. Helm, 6 Ill. 220; Kirkwood v. Koester, 11 Kan. 471; Dunwell v. Bidwell, 8 Minn. 34; Jersey v. Demarest, 27 N. J. Eq. 299; Brooks v. Wilson, 6 N. Y. Supp. 116; Gulley v. Thurston, 112 N. C, 193, 17 S. E. 13; Tolerton v. Williard, 30 Ohio St. 579; Eckert v. Lewis, 4 Phila. (Pa.) 422. But this rule is subject to the right of either party to impeach the lien of the other, the mortgagee being permitted to show that the judgment is void, (27 Cyc. 1175; Stanley v. Stanley, 35 S. C. 94, 14 S. E. 675) and the judgment creditor being allowed to attack the mortgage for fraud or other invalidating cause, (27 Cyc. 1175; Semon v. Oppenheimer, 20 Fed. 553; Baldwin v. Little, 64 Miss. 126) or to show that the consideration of the mortgage has failed, or that it failed to pass, or passed only in part, before the recovery of the judgment. 27 Cyc. 1175; Rice v. Southern Pa. Iron &c. Co., 32 Leg. Int. (Pa.) 431; Hoffman v. Ryan, 21 W. Va. 415; Peterson v. Oleson, 47 Wis. 22, 2 N. W. 94. Where the mortgagor induced the third party to advance money to redeem from the foreclosure under the second mortgage, it might be urged that such restoration of the status of the second mortgage with the money of this third party should place him in the position formerly occupied by the second mortgagee. And since the position of the second mortgagee was superior to the judgment creditor, this should place the intervening third party ahead of the judgment creditor. arrangement would not prejudice the rights of the judg. Such ment creditor, for such lien of the third party would attach to the very property which the money of the third party added to the estate of the mortgagor. Collaterally, see Jones on Mortgages, 7th ed. §§ 874d, 877a. see 3238. (1923.) 3256a. Mortgage with wrong description of property -How to correct mistake.-We are anxious to know the law on this question: We, The A National Bank, took a real estate mortgage on 40 acres in a certain section. The stenographer in drawing up the papers, described the 40 acres in the wrong quarter of this section. Kindly advise me if, in the event the party who owns the land, sells it and fails to pay us have we got any rights. Our mortgage was duly recorded. doubt about the 40 acres; the party intended to mortThere is no gage it to us and admits this to be all true. Opinion: If the owner of the land should sell it to a purchaser for valuable consideration without notice, or mortgage it, the purchaser's or mortgagee's title would be superior to yours as the record of your mortgage on the wrong quarter of the section would not constitute notice to a subsequent good faith purchaser. As the situation stands now you have an equitable title to the forty acres intended to be mortgaged, good against the owner or an attaching creditor of the mortgagor; but not good against a subsequent purchaser or mort gagee for value, The course to pursue is to have the owner correct the mistake by giving you a new mortgage correctly describing the right forty acres and having that mortgage recorded; and if the owner refuses, file a bill in equity to compel reformation of the mortgage on the ground of mistake. In Bush v. Bush, 33 Kan. 556, [cited in Crosson v. Kartowitz, 43 N. D. (1919) 466, 175 N. W. 868] a trust deed was given in which a wrong quarter section was described. A month later another trust deed was executed to correct the description and recorded. interim there came attaching and judgment creditors. In the The court upheld the right of the holder of the trust deed as against the latter, saying: "Although there was a mistake made in the description of the land intended to be mortgaged, the same might have been reformed at any time before the land had passed to |