Alexander v. Welch
| Decision Date | 30 November 1881 |
| Parties | SAMUEL T. ALEXANDER ET AL.v.WILLIAM P. WELCH. |
| Court | United States Appellate Court of Illinois |
OPINION TEXT STARTS HERE
APPEAL from the Circuit Court of McDonough county; the Hon. S. P. SHOPE, Judge, presiding. Opinion filed January 17, 1882.
Mr. JOSEPH B. MCCONNELL, for appellants; that where a mortgagee takes a new mortgage to secnre the prior debt and subsequent indebtedness, he will, as to intervening incumbrancers, be held to have waived the first mortgage, cited Campbell v. Carter, 14 Ill. 286; Jarnagan v. Gaines, 84 Ill. 203; Gardner v. Emerson, 40 Ill. 296; Edgerton v. Young, 43 Ill. 464; Richardson v. Hockenhall, 85 Ill. 124; Fitts v. Davis, 42 Ill. 391.
Where a mortgagee, having additional security upon personal property, releases the same, he will, on foreclosure, be compelled by subsequent incumbrancers to deduct the value of such property from his mortgage debt; Iglehart v. Crane, 42 Ill. 261; Moody v. Haselden, 1 S. C. 129; Red Bank Ass'n v. Patterson, 27 N. J. Eq. 223; Washington Bldg. Ass'n v. Beaghen, 27 N. J. Eq. 98.
Mr. C. F. WHEAT, for appellee.
On the 29th day of January, 1877, Joseph V. Sorter, to secure his note of that date to appellee for $715, payable in two years, with ten per cent. interest per annum from date, executed and delivered to appellee a mortgage on certain lots in Blandinville and Bushnell, and at the same time, as a further security for the payment of said note, gave a chattel mortgage on the furniture in the Bushnell House, containing this recital: “This mortgage being given as additional security for payment of said note, partially secured on real estate.” On March 27, 1877, appellants, Alexander and Haines, held the note of said Sorter for $1,152, payable in three years, with ten per cent. interest, and to secure the same, said Sorter executed and delivered to them a mortgage, which was recorded on that day, on all the lots in Bushnell included in the former mortgage.
On the 30th day of January, 1877, Joseph V. Sorter was indebted to West, Kaiser & Co. in the sum of $600, and to secure the same executed his three notes, with appellee and Thomas I. Sorter as his sureties, to West, Kaiser & Co. for $200 each, payable three, six and nine months after date with ten per cent. interest.
On the first day of May, 1877, appellee paid the first of said notes and surrendered it up to Joseph V. Sorter, the principal debtor, who at the same time executed to him his note for $200, payable one day after date with ten per cent. interest.
On the 11th day of December, 1877, by a mortgage of that date, Joseph V. Sorter again conveyed to appellee all the real estate in Blandinville and Bushnell described in the first mortgage, and by a chattel mortgage of that date the same personal property described in the first chattel mortgage to secure to the note for $715, described in the mortgage of the 29th of January, 1877, and also to secure to appellee the said note for $200 of the 1st of May, 1877, and to indemnify him against loss as security for said Joseph V. Sorter on said two notes of $200 each, given to West, Kaiser & Co.
Appellee paid the two notes last named on the 24th day of January, 1879, amounting in principal and interest to $440.
By virtue of the two chattel mortgages, appellee on the 17th day of February, 1879, sold all the personal property therein described, and realized therefor over and above expenses the sum of $580, which he applied on the security debt paid by him for Sorter, secured by the last mortgages, leaving still due him on said last named demand, $98. The court found the facts as above stated, and that the whole of the $715 and interest thereon, secured by the first mortgage, and the balance of $98, secured by the second mortgage, amounting in all with interest to $1,152.82, was still due complainant, and that the same was a first and prior lien on all said mortgaged estate, and that the amount due Alexander and Haines on their mortgage was $1,557.12. The decree ordered Sorter to pay the several sums found due on each of said mortgages, and in default thereof that the master in chancery sell the mortgaged premises, first selling the lots in Blandinville, and out of the proceeds of such sale he pay first, the costs of suit; second, the balance of $98, security debt due complainant on the second mortgages, and all taxes advanced by complainant, with interest; third, the amount due on the first mortgage and taxes advanced by complainant thereon, and bring the balance, if any, into court; that if the amount realized from the sale of the Blandinville property shall be insufficient to pay the several amounts as herein directed, that said master pay the balance out of the proceeds of the sale of the Bushnell property, and if anything remains, that it be applied to the payment of the amount found due Alexander and Haines. But that no part of the funds arising from the sale of the Bushnell property should be applied to the payment of complainant's second mortgages until after Alexander and Haines were fully paid. From this decree Alexander and Haines appeal to this court and insist that the court erred in not requiring the proceeds of the sale of the personal property and the Blandinville lots to be applied in payment of the note for $715 secured by the mortgages of the 29th of January, 1877. Other mortgagees were made parties below, but they claim, under separate conveyances, different parts of the mortgaged premises; and as their rights are not joint with appellants, but several, they do not join in the appeal in this case, and it will not be necessary to notice them further.
It is familiar law and well settled by the great weight of authority, that where a mortgagor has made successive sales of distinct parcels of the mortgaged premises to different parties, and the mortgagee brings a bill to foreclose, he will be required to sell, in the first place, such parts, if any, as the mortgagor still retains, and then the parts that have been sold by the mortgagor, beginning with the last, and selling in the inverse order of their alienation.
This order of equities proceeds upon the supposition that each subsequent purchaser has actual or constructive notice by the recording of the deed or otherwise, of each prior conveyance by the mortgagor of portions of the...
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