A fаrmer purchаsed severаl acres оf land fоr grazing his sheep. Because оf the terrain, the land was not useful for much else and was relatively inexpensive. Shortly thereafter, an adjacent neighbor accidentally discovered gold on the property and began seeking the necessary permits to begin mining. As soon as word got out, real estate values in the area soared. Rather than sell his land for a profit, the farmer decided to try to open a mine on his property. To finance the mining project, the farmer borrowed $100,000 from the bank secured by a mortgage on his land. The bank promptly recorded the mortgage. A week later, the farmer went to a friend asking her to invest in the mining project. The friend loaned the farmer an additional $50,000 in exchange for a mortgage on the property. The friend knew of the bank’s mortgage, and the friend promptly recorded her mortgage. A few weeks after that, the farmer went back to the bank and, after notifying them of the friend’s mortgage, obtained another advance of $25,000 from the bank, increasing the amount of the bank’s mortgage from $100,000 to $125,000. The bank promptly recorded the change. After spending most of the funds on engineers, surveys, and construction equipment, it was determined that the gold strike was limited to a very small portion of the neighbor’s land. No gold was found on the farmer’s land or any of the neighboring parcels. Land values plummeted. The farmer stopped making the mortgage payments to the friend but continued to make payments to the bank. The friend brought a foreclosure action against the farmer and included the bank as a party. The proceeds at the foreclosure sale were just $60,000 after attorneys’ fees and court costs. How should the proceeds be divided?
A lаndоwner’s piece оf prоperty wаs locаted on the corner of a busy intersection. People walking past the intersection often cut across the landowner’s property rather than walk along the sidewalk, despite a “keep off” sign that the landowner erected. The landowner had captured a young bobcat several months earlier and had decided to keep him as a pet. In an effort to stop people from cutting across his yard, the landowner erected a large sign that read, “Beware of Bobcat.” Knowing that a bobcat attacks using its claws, he took it to a vet to have its claws removed. The vet failed to remove one of the bobcat’s claws, but the landowner was not aware of this. The landowner kept the bobcat on a leash in the front yard. The leash was long enough to allow the bobcat access to most of the landowner’s property; however, the bobcat could not reach the sidewalk that ran adjacent to the landowner’s property. The next day, a woman was walking home from the market. When she came to the intersection, she cut across the landowner’s property rather than staying on the sidewalk. The bobcat charged at the woman and slashed her legs severely with its one remaining claw. If the woman brings suit against the landowner for her injuries caused by the bobcat and establishes that she did not see the warning sign, the woman will: