Three questions arising upon the record are submitted by the briefs and arguments of counsel for our decision.
One ground of defense made to the bill of appellant is that the note for §400 secured by the mortgage sought to be foreclosed by him was paid by George A. Lowman to Bran-son Lowman, and the mortgage satisfied before the assignment to appellant. The fact of the possession of the note and mortgage by appellant raises a presumption the note is unpaid and the mortgage not satisfied, but the force of this presumption is, perhaps, somewhat lessened by the fact that at the time of the transfer of the claim Branson Lowman did not have the mortgage in his possession, and said he did not know where it was, unless it was in the recorder’s office.
The evidence upon the question of the settlement of the note and satisfaction of the mortgage is somewhat conflicting, and not entirely satisfactory; but when regarded in the light of the surrounding circumstances, we are unable to say it was insufficient to justify the finding of the circuit court in favor of appellees. It is urged by appellant that the firm was insolvent, and therefore the assets of the firm could not lawfully be applied to the payment of a private indebtedness between its members. But the creditors alone had a right to object to an arrangement whereby the notes and accounts of the firm were turned over in payment of the note and discharge of the mortgage held by one member of the firm against the other.
A second ground relied upon by appellees is 'that a court of equity will keep alive the prior mortgage for §5,000, notwithstanding the release entered upon the margin of the record, in order to protect the title of the first mortgagee under the deed he took from the mortgagor, as against the junior mortgagee. In Edgerton et al. v. Young et al., 43 Ill. 464, it was said: “If a mortgage is the eldest lien, and is for an amount exceeding the value of the premises, and the mortgagee, to avoid the expense of foreclosure, takes a conveyance from the mortgagor, a court of equity would not permit the mortgaged premises to be swept away from him by a junior judgment creditor without payment of the mortgage, under pretense that its lien had been lost by merger.” Where a greater and a less estate meet in the same person, a merger does not always follow; it will depend upon the intention and the interest of the parties. The case .at bar is much like that of Richardson v. Hockenhall et al., 85 Ill. 124. In that case a quit claim deed was executed, while here, although a warranty deed was given, yet in that respect it gave to Burge no right he did not already have under his mortgage deed, which contained full covenants of warranty and waivers of the dower and homestead rights. On the other hand, it being a question of intention, the circumstances of this case are stronger in favor of appellees than were the facts of that case in favor of appellant, Bichardson. In that case, two days after the execution of the deed, not only was the mortgage released upon the record, but the note it was given to secure was surrendered; while in this case the entry of satisfaction wras not made until several years after the deed was delivered and possession taken, and both the note and mortgage were retained, and are yet held by Burge. The testimony of Burge and of George A. Lowman shows that the conveyance was made to save the costs of foreclosure, and because all the mortgaged property was not sufficient to pay the debt, and the mortgagors had no other property subject to execution. In Richardson v. Hockenliall it was held that, as there was a bare equity of redemption, which was released without any consideration except the discharge of the mortgage indebtedness, and the release was taken merely to save the trouble and expense of foreclosing, it would be unreasonable to believe, under the circumstances, it was the intention of Bichardson to give up his mortgage, and leave the property free and clear to be taken on judgments, which were a lien only on the equity of redemption. The case was distinguished by the court from Campbell v. Carter, 14 Ill. 286, and the court said that in the latter case, “ the equity of redemption was not the only consideration received; the mortgagee obtained the covenants of warranty of the mortgagor and a relinquishment of a dower interest in the property, which were regarded by the court as important facts in the decision of the case.” In the case at issue, as we have seen, the mortgagee received no consideration, other than the release of the equity of redemption, that he did not already have. Upon the authority of Richardson v. Hockenhall, we think the decree of the circuit court upon this point would be affirmed. Under the view we have taken of the rights of the parties, it is unnecessary to decide the third question suggested in the briefs of counsel, which involves the right of Burge to set off, in equ ity, the note of $400 given by Branson Bowman to Samuel Burge & Co. against the note and mortgage sought to he foreclosed.
The decree is affirmed.
Affirmed.