Discharge in Error
The rule of equitable subrogation has been applied in connection with the erroneous discharge of a mortgage:
It is the general rule that, where a mortgage has been discharged by mistake, equity will set the discharge aside and reinstate the mortgage to the position the parties intended it to occupy, where the rights of intervening lienors have not been affected." (Emphasis added). North Easton Cooperative Bank v. MacLean, 300 Mass 285, 15 N.E.2d 241 (1938).
The rule above noted has been extended to include transactions that involve sales as well as refinances. See East Boston Savings Bank v. Ogan , 428 Mass. 327, 701 N.E.2d 331 (1998).