Providence Institution for Savings v. Sims

WALKER, Justice.

The proceeds of a loan secured by a deed of trust on real estate were used, pursuant to an express subrogation agreement, to retire part of the indebtedness secured by a first lien on the property. There was an intervening mechanic’s lien. The remainder of the indebtedness secured by the first lien was later subordinated to the deed of trust, which was subsequently foreclosed. The question to be decided is whether the purchaser at the foreclosure sale took the property free of or subject to the mechanic’s lien.

The facts are stipulated. On August 9, 1961, Nortex Mortgage…