1. Before purchasing the premises in question, complainant inquired of defendant whether he had any interest in the tract. Defendant replied that he did not, despite the fact that he had a second mortgage on the premises. Complainant, relying on this representation and the search made by his attorney (which did not show defendant's mortgage), then completed the purchase, the first mortgage being canceled of record and a new mortgage made by complainant to the building and loan which loaned him the money being placed on record. Held, defendant's bond and mortgage ordered surrendered upon full payment of the principal and interest due thereon.
2. The present holder of the mortgage in question took it by assignment from his brother and failed to get a declaration of no set-off from the mortgagor or those holding under him, to wit, the complainants. He took subject to the equities in the situation.
3. Although equity will not allow a merger of mortgage when this would aid in carrying a fraud or other unconscientious wrong into effect, a merger will be allowed where substantial justice will result.
4. As a general rule equity will not relieve a person from the effects of a mistake which is the result of his culpable negligence. Complainant's actions may not be qualified as such under the circumstances.
PER CURIAM.
The decree appealed from will be affirmed, for the reasons expressed in the opinion of Vice-Chancellor Sooy.
For affirmance — THE CHIEF-JUSTICE, LLOYD, BODINE, HETFIELD, DEAR, WELLS, WOLFSKEIL, JJ. 7.
For reversal — CASE, DONGES, HEHER, PERSKIE, RAFFERTY, JJ. 5.