## Facts

- Nick Mercer and Anastasia Mercer owned Phoenix real property as joint tenants with right of survivorship.
- The Brants made a loan to a closely held corporation associated with Nick Mercer, secured by a promissory note and deed of trust on the property.
- The deed of trust appeared properly executed by both Nick and Anastasia, but the estate and heirs alleged Anastasia’s signature was forged.
- Anastasia died before the foreclosure action was filed, leaving Nick as the surviving joint tenant.
- Defendants asserted (1) the deed of trust could not encumber Anastasia’s interest due to the alleged forgery and (2) the loan was usurious; they also disputed inclusion of attorney’s fees where a title insurer paid some fees.
- The superior court granted partial summary judgment that the deed of trust was a valid lien; after trial it rejected the usury defense and entered judgment and foreclosure for the Brants, including attorney’s fees.

## Issues

1. Whether a deed of trust executed by one joint tenant creates a valid lien on the property when the other joint tenant’s signature is alleged to be forged, and whether the encumbrance severs the joint tenancy.
2. Whether the loan transaction was usurious, and whether defendants were barred from asserting usury by estoppel.
3. Whether attorney’s fees could be included in the secured indebtedness despite partial payment by a title insurer.

## Decision

- Affirmed.
- Held the deed of trust was a valid lien because a joint tenant may encumber his own joint tenancy interest without the other joint tenant’s consent.
- Held the encumbrance did not sever the joint tenancy; upon Anastasia’s death, Nick took sole title by survivorship subject to the preexisting lien, which then attached to the whole.
- Held the transaction was not usurious and, in any event, defendants were estopped from asserting usury where any usurious aspect stemmed from wrongful conduct by Nick Mercer acting for the borrower.
- Upheld inclusion of attorney’s fees in the foreclosure judgment under the deed of trust; title insurance payment did not negate the borrower’s contractual obligation or create an improper recovery.

## Legal Principles

- A joint tenant may convey or encumber his joint tenancy interest without the consent of the other joint tenant.
- An encumbrance by one joint tenant does not, by itself, sever a joint tenancy.
- Upon the death of a joint tenant, the surviving joint tenant takes the decedent’s interest by survivorship; the survivor’s consolidated title remains subject to valid liens previously placed on the survivor’s joint tenancy interest.
- Estoppel may bar a usury defense when the alleged usury arises from the wrongful conduct of the party through whom the defendant claims.
- Contractual attorney’s fee provisions in a deed of trust may be enforced as part of the secured debt notwithstanding the existence of title insurance covering some fees.

## Conclusion

The court enforced a deed of trust against jointly held property where one joint tenant validly encumbered his interest, holding that survivorship transferred full title to the surviving joint tenant subject to the lien, and it rejected usury and attorney’s fee challenges, including on estoppel and contractual grounds.


Brant v. Hargrove, 129 Ariz. 475, 632 P.2d 978 (Ct. App. 1981)