Insight LLC v. Gunter
Supreme Court of Idaho
302 P.3d 1052 (2013)
Summit, Inc. bought an adjacent 18-acre parcel from Pat and Monica Gunter (defendants), financing part of the price with a mortgage from Independent Mortgage Ltd. Co. (IM) (later assigned to Insight LLC (plaintiff)) that was secured by both the new 18 acres and Summit's existing 142-acre tract; IM knew when it signed that Summit still planned to give the Gunters a deed of trust for the remaining purchase price. Later that same day, Summit gave the Gunters a deed of trust for the rest of the price, though the Gunters didn't know about the IM mortgage at the time; the IM mortgage was signed first, but both documents were recorded the next day, with the IM mortgage recorded first. After Summit defaulted on both obligations, Insight sued, and the district court found the IM mortgage wasn't actually a purchase-money mortgage (since it wasn't part of the same transaction as the Gunters' deed) and that the Gunters' deed had priority anyway because the IM mortgage wasn't valid until the Gunter transaction closed. Insight appealed.
Whether, in a priority dispute between two purchase-money mortgages arising from a single transaction where both parties are good-faith encumbrancers for value, the first mortgage recorded has priority over all later ones.