Harms v. Sprague

Facts

William Harms and his brother John Harms took title to real estate in Roodhouse as joint tenants on June 26, 1973. Carl and Mary Simmons owned a lot and home in Roodhouse. Charles Sprague agreed to buy it from them for $25,000. He paid $18,000 in cash and signed a promissory note for the remaining $7,000. Because Sprague had no security for the $7,000, he asked his friend John Harms to co-sign the note and give a mortgage on his interest in the joint tenancy property. John agreed. On June 12, 1981, John and Sprague, jointly and severally, signed a $7,000 note payable to the Simmonses. John also signed a mortgage to the Simmonses on his undivided one-half interest in the joint tenancy property, to secure the note. William did not know about the mortgage. John then moved to the Simmons property that Sprague had bought. John died on December 10, 1981. His will made Sprague the devisee (the person who receives property under a will) of his entire estate. The mortgage was recorded on December 29, 1981, after John's death.

Issues

1. Is a joint tenancy severed when one joint tenant mortgages his interest in the property without the other joint tenants?
2. Does a mortgage given by one joint tenant on his interest survive his death as a lien on the property held by the surviving joint tenant?

Holding

John Harms's mortgage did not sever the joint tenancy, so William Harms's right of survivorship took effect when John died. William owns the whole property. The mortgage did not survive John's death as a lien on it, and recording it afterward changed nothing.