Morstain v. Kircher
Minnesota Supreme Court
250 N.W. 727 (1933)
Frances and Thomas Brown gave Morstain (plaintiff) a $400 promissory note secured by a mortgage on their property; when they later conveyed the property to Kircher (defendant) subject to the mortgage, Kircher assumed the note and began making interest payments to Morstain, becoming personally liable to her as mortgagee. Kircher later re-conveyed the property back to the Browns, still subject to the mortgage, and when Morstain sued Kircher for the unpaid balance, the municipal court awarded her a judgment of $432.07, which Kircher appealed.
Whether the discharge of a promisor is effective against a creditor beneficiary if the creditor beneficiary did not change his position in reliance on the promise before he became aware of the discharge.