
    T. G. Cansler v. E. D. Sallis et al.
    1. Mortgage. Extinguishment. Change inform of indebtedness.
    
    A mere change in the form of indebtedness will not discharge a lien, unless the parties clearly intended to extinguish it. Lewis v. Starlce, 10 S. & M. 120; Howell v. Bush, ante, 437.
    2. Same. Entry of satisfaction. Subsequent mortgagee. Case in judgment.
    
    C. sold land to S., from whom he took a trust-deed to secure the note for the unpaid purchase-money, and who afterwards gave a deed of trust on the land to M. Subsequently, C., owing B., agreed to assign him his trust-deed and note, with the understanding, in which S. acquiesced, that if C. had to pay B., his right under the trust-deed should revive. For convenience, but without intending to destroy the first security, the old note and trust-deed were given up to S., and marked on the record-book, “satisfied by settlement,” and S. executed to B. a new note and trust-deed for the amount of the old note and interest. C., on S. failing to pay, had to take up the B. debt. Held, on a bill filed by C. to enforce his first trust-deed, that equity, looking through the form to the substance, would keep alive the original security as between the parties. Held further, that M., being unaffected by the transaction, could not complain.'
    Appeal from the Chancery Court of Itawamba County.
    Hon. Laeayette Hatjghton, Chancellor.
    T. Gr. Cansler filed this bill against E. D. Sallis, Thomas Mann and L. Hampton, alleging that, in December, 1873, the complainant sold to Sallis a tract of land, the purchase-money for which was paid in part, and for the balance Sallis gave his note. The complainant executed a deed to Sallis, and to secure the unpaid part of the purchase-money Sallis conveyed the land to Cayce, trustee. Being indebted to Hampton, on May 4, 1874, Sallis conveyed the land to Mann, in trust to secure said indebtedness. Cansler owed a debt to one Bankhead; and agreed to assign to Bankhead the note and deed of trust, on the understanding, in which Sallis acquiesced, that, if the complainant was compelled to pay Bank-head, his rights under the trust-deed should revive. For the convenience of the parties, and without any intention of destroying the original security, on March 11, 1875, the old trust-deed and note were given up to Sallis, and marked on tbe record-book of deeds, “ satisfied by settlement; ” and Sallis executed to Cayce, trustee, for tbe benefit of Bankbead, a new trust-deed, and made a new note, payable to Bankbead, for tbe amount of the old note and interest. The notes not being paid, in December, 1875, tbe complainant himself paid tbe debt to Bankbead, took up tbe last note and deed of trust, and filed this bill to enforce tbe first one. To that bill tbe defendants demurred, on tbe grounds of want of equity, and want of interest in tbe complainant; and, from a decree sustaining tbe demurrer, tbe complainant appeals.
    
      Qlayton $ Qlayton and Newnan Qayce, for tbe appellant.
    1. In a sale of real estate tbe vendor has a lien by implication of law, which is waived only by taking collateral security or express agreement. 2 Wash. 90 ; Pitts v. Parker, 44 Miss. 247,
    2. Taking collateral security is, prima facie, a waiver, but may be rebutted. 2 Wash. 91; 2 Story Eq. Jur. § 1226 ; Ponda v. Jones, 42 Miss. 792.
    8. If tbe vendor transfers tbe note for tbe purchase-money, and receives it back again, bis lien revives. Briggs v. Sill, 6 How. (Miss.) 864 ; Lindsey v. Bates, 42 Miss. 397; Pitts-Y. Parker, 44 Miss. 251. Had there been no controversy about tbe existence of tbe vendor’s lien, tbe note for tbe purchase-money been transferred to Bankhead, and Cansler been compelled to take it back, bis vendor’s lien would be superior to tbe lien of Mann.
    4. If there was no veúdor’s lien, still the first deed of trust given by Sallis and wife created a lien superior to any other claim, and certainly to that of Mann: first, because it was for the purchase-money; and, secondly, because it was older in date, and recorded before the other was given. Tbe transaction, by which tbe debt was put in a different shape but not paid, did not make tbe deed of trust of Sallis to Mann superior to that to Bankbead. ■ By § 2296 Code 1871, it is provided that “ every mortgage given at the time of the purchase of real estate, to secure the payment of tbe purchase-money, shall be entitled to a preference over all judgments and other debts of tbe mortgagor, which preference shall only extend to the land purchased.” There was a mortgage given to secure the purchase-money, and it has never been paid. When retransferred to Cansler, bis rights under the mortgage or deed of trust revived; and his equity, being superior to that of the Mann deed of trust, the court will enforce the first one.
    5. The rights of Mann are not affected by the transaction. He gets what he contracted for. Equity will not, on a technicality, give him more.
    
      J. A. Brown, on the' same side,
    cited Orary v. Bowers, 20 Cal. 85; Bavidson v. Bridgeport, 8 Conn. 472; Stebbins v. Kellogg, 5 Conn. 265; Johnson v. Collins, 20 Ala. 485; Byan v. Bunlap, 17 Ill. 48; Coburn v. Hough, 32 Ill. 344; The Barque Chusan, 2 Story C. C. 455 ; Bowney v. Hicks, 14 How. (U. S.) 240; Groodnow v. Howe, 20 Maine, 164; Baker v. Braper, 1 Clifford C. C. 420; Berry v. Cfriffin, 10 Md. 27; Blunt v. Walker, 11 Wis. 350; Lewis v. Lozee, 3 Wend. 79; Wolgamot v. Bruner, 4 Har. & M’Hen. 89.
    
      Blair $ Clifton, for the appellees.
    Is any vitality left in the first deed of trust or note as against Mann and Hampton ? The deed has been marked on the record cancelled, 13 S. & M. 109; and, with the note, has been returned to Sallis, and another deed and note given in their stead. This was done intentionally and deliberately, not by fraud or mistake. The parties, acting under § 2297 Code 1871, intended to cancel the deed of trust and reconvey the land. What is settlement but payment? The former is a larger term, but includes the latter. Payment may be in money, land, or paper. The satisfaction of the deed of trust was unconditional. This is shown by the entry, the return of the note and deed of trust to Sallis, and the execution of the new note and deed of trust to different parties. This is a stronger ease than Burn v. Yeizer, 27 Miss. 188, where the court said: “ Holding that there was a full and unconditional discharge of the trust-deed, it appears to us very manifest that it would be incompetent for a court of equity, under the circumstances alleged,- to set aside the release and re-establish the satisfied deed.” And no one was there interested but the original parties. In Holmes v. Bacon, 28 Miss.. 607, relief was granted solely on the ground oí fraud. All that the complainant seeks in this case, as appears from the bill, is a simple priority. It is not charged that Sallis is insolvent, nor that the estate is insufficient to pay both claims, and the conclusion is authorized that it is ample.-
   Chalmers, J.,

delivered the opinion of the court.

That a mere change in the form of indebtedness will not discharge a lien, unless it is apparent that the parties intended to extinguish it, is well settled. The principle was stated and fully recognized in Lewis v. Starke, 10 S. & M. 120, 128, and in the recent case of Howell v. Bush, ante, 437; but in those cases the facts negatived any intention of retaining the lien, and demonstrated an opposite intention.

In this case, on the contrary, the allegations of the bill, which are admitted by the demurrer, are that “ when the new note and trust-deed were taken, it was not intended to destroy the lien of the first trust, but only to change the form for the convenience of parties.” This change of form grew out of the fact that the note had been assigned, and the assignee desired a new note and trust-deed in his own name. The new note was for the exact amount of the old one, with the accumulated interest; and the consideration of both was the unpaid purchase-money of the land mortgaged. The original trust-deed was marked “ satisfied by settlement,” — language which seems of itself to import that there had been no actual payment if the settlement should fail.

There - can be no doubt that, under the allegations of the bill, the intention between the parties was to substitute the second note and trust-deed for the first as a mere change in the form of indebtedness for some fancied convenience to the parties. Whenever this is the case, a court of equity will look through the form to the substance, and keep alive the original security, if justice requires it. Dillon v. Byrne, 5 Cal. 455; Swift v. Kraemer, 13 Cal. 526 ; Flower v. Elwood, 66 Ill. 438 ; Nichols v. Overacker, 16 Kansas, 54.

Can Mann, who had taken a trust-deed junior to the original one, complain that it is kept alive? How is he prejudiced? He has still all that he bargained for. He was induced to take no new step, by reason of the change in the form of the original security. He has not been misled by it; he has advanced no new consideration in consequence of it. Shall he be allowed to gain an accidental advantage by a transaction with which he had no concern ? If it was the intention of the parties to the original security to keep it alive, as the bill charges, the carrying out of that intention in no manner harms him. His rights remain wholly unaffected, and this is all that he can ask.

Decree reversed and demurrer overruled.  