Conly v. Industrial Trust Co.

Pearson, Vice-Chancellor:

The question is whether, after partial payment of the debt for which a mortgage was given, an unrecorded agreement between the mortgagor and mortgagee that the mortgage shall secure the payment of an additional loan (in amount less than the partial payment) is effective to revive or extend the lien of the mortgage to secure the additional loan, as against subsequent judgment creditors without knowledge of the agreement.

In July 1939, Tabasso Homes, Inc. mortgaged a tract of land in Wilmington tp Industrial Trust Cpmpany to secure the payment of $17,600 loaned by the…