Nicholson v. Thurmond

1. Until a prior incumbrancer has notice of the existence of a ' junior claim, he is not liable to the junior claimant or lienholder, under the principle of marshaling, for any bona fide disposition of the security, even though the junior incumbrancer is injured thereby.

2. Accordingly, where the holder of a deed, conveying three separate tracts of land to secure a debt, releases or reeonveys one of the tracts to the debtor without actual knowledge that the debtor has conveyed the other two tracts to another person by a junior security deed, the- creditor holding, the senior security deed will…