Equitable SubrogationThomas Tripodianos
January 5, 2011 — 344 views
Second Mortgage Bank seeks to foreclose on a second mortgage, arguing the conveyance of the premises from Owners to Buyers was void. Buyer and Buyer's Bank seek to vacate and remove Second Mortgage Bank's mortgage from the public records. Buyer argues Owner never informed him of the existence of the second mortgage (i.e. lack of actual notice) and point to an undisputed error in indexing to prove they were not on constructive notice. Second Mortgage Bank argued it was entitled to equitable subrogation, contending its predecessor in interest, paid off and satisfied at least $78,275 of prior liens. Does equitable subrogation apply or did the second mortgage cease to be a valid lien so that it may be canceled as a cloud on title?