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FIRST FEDERAL SAV. BANK OF WABASH v. U.S.

No. 96-3364.

118 F.3d 532 (1997)

FIRST FEDERAL SAVINGS BANK OF WABASH, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.

United States Court of Appeals, Seventh Circuit.

Decided June 30, 1997.

Attorney(s) appearing for the Case

Patricia McCrory, A. Donald Wiles, II (argued), Harrison & Moberly, Indianapolis, IN, for Plaintiff-Appellant.

Kenneth L. Greene, Curtis C. Pett (argued), Department of Justice, Tax Division, Appellate Section, Gerald H. Parshall, Jr., Department of Justice, Tax Division, Washington, DC, for Defendant-Appellee.

Before CUMMINGS, FLAUM, and EVANS, Circuit Judges.

FLAUM, Circuit Judge.

When a bank loans money to extinguish a first mortgage in certain property and secures the loan with a new mortgage in the property but fails, due to the negligence of its title insurer, to discover an intervening tax lien, may the bank rely on the doctrine of equitable subrogation to establish the priority of its lien over that of the government? Applying Indiana law to the circumstances of this case, we agree with the district court that the...

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