Construction Machinery v. Roberts

Robert H. Dudley, Justice.

The main issue in this case is whether a first mortgage lost its priority over a junior lien when the holder of the first mortgage chose not to foreclose, but instead chose to take a “warranty deed in lieu of foreclosure,” and then resell a substantial part of the same real estate to a stranger to the title without taking any action against the holder of the junior lien. Later, after reselling part of the land to the stranger, the first mortgagee filed suit to cancel the intervening lien. The chancellor granted the relief prayed. We reverse and hold that under the…