ings. A second mortgagee likewise collected the proceeds of another fire insurance policy and credited the same upon its mortgage, and, thereafter, upon foreclosure of its second mortgage, became the purchaser and eventually the owner of the premises through issuance of a sheriff’s deed. It is held, for reasons stated in the opinion, that the amount of the draft received by the first mortgagee and by him turned over to the mortgagors should not be deducted from, or credited upon, the amount due on the first mortgage.
Opinion filed June 27, 1921.
From a judgment of the District Court of Morton county, H anley, J., defendant, Farmers and Merchants State Bank of New Salem, appeals.
Affirmed.
Newton, Dullam & Young, for appellant.
“No matter what device or shift the holder of the first lien may resort to. every attempt to evade his duty to the owner of the inferior lien will be thwarted by the law. In equity he has a lien on the particular tand covered by both incumbrances only as to the amount due after applying the value of the other security in extinguishment of his debt.” Union National Bank v. Moline et al, 7 N. D. 213; Citing 3 Pom. Eq. Jur. § 1414; Gotzian & Co. v. Shakman, &9 Wis. 52, 61 N. W. 304; Also 1913 Revised Codes, § 6716; The case of Sarles v. McGee, 1 N. D. 365.
The holder of the first mortgage, having knowledge of the second Hen, cannot release his security on the fund on which he alone holds the lien and put the whole burden against the one on which there is a second mortgage. If the mortgagee does so, he must account to the second mortgagee for the value of the fund so released. Pom. Eq. Jur. § ay6; 5 L. R. A. 276.
Sullivan, Hanley & Sullivan, for respondent.
"A subsequent purchaser or incumbrancer has a right to rely on the record, as to the original amount.” But he takes his chances as to how much, if anything had been paid, and buys subject to the state of account as then existed between mortgagor and mortgagee, and has no better or other rights than the former in that respect.” Lash v. Edger-
