Plain v. Roth

• Decision Date: 20 November 1883
• Citation: 107 Ill. 588,1883 WL 10338
• Parties: JOHN PLAINv.HENRY ROTH et al.
• Court: Illinois Supreme Court

107 Ill. 588

1883 WL 10338 (Ill.)

JOHN PLAIN

v.HENRY ROTH et al.

Supreme Court of Illinois.

Filed at Ottawa Nov. 20, 1883.

OPINION TEXT STARTS HERE

APPEAL from the Appellate Court for the Second District;--heard in that court on appeal from the Circuit Court of De Kalb county; the Hon. C. W. UPTON, Judge, presiding.

May 1, 1874, John Althen made to Richard L. Divine his promissory note for $2500, for money borrowed, payable three years after date, with ten per cent interest, and secured the same by mortgage, made by himself and wife, of a store and lot in Sycamore, Illinois. August 11, 1874, John Althen made to Daniel Pierce his promissory note for $1000, payable three years after date, with ten per cent interest, and secured the same by mortgage, executed by himself and wife, of the same store and lot, and also of a house and lot in Sycamore, which was then, and since has been, the homestead of himself and his family. The homestead right was waived by the mortgage. February 18, 1875, John Althen made to Henry Roth his note for $400, payable five years after date, and secured the same by mortgage, executed by himself and wife, upon said store and lot. December 21, 1877, Divine assigned his note aforesaid to John Plain, “without recourse,” there being indorsement on the note of interest paid to May 1, 1877, and also executed to Plain a written assignment of the mortgage, which was recorded, and at about that same time Pierce assigned his $1000 note and mortgage to said Plain. August 11, 1876, John Plain recovered judgment against John Althen, in the DeKalb county circuit court, for $417.56, upon which execution issued August 12, 1876, and March 1, 1877, Plain recovered another judgment against John Althen for $575.95. No execution issued thereon. August 19, 1877, Divine recovered judgment against John Althen for $66. Execution issued August 19, 1877. There were other judgment creditors who held judgments against John Althen, which were liens upon the mortgaged premises.

October 20, 1879, John Althen died, leaving Frederica Althen, his widow, and John E. Althen, his only child, surviving him. On the 4th day of May, 1880, Henry Roth, the third mortgagee, filed a bill to foreclose his mortgage, making parties defendant said Frederica Althen and John E. Althen, John Plain, assignee of the Divine and Pierce notes and mortgages, and all the judgment creditors. All the defendants answered the bill. John Plain filed a cross-bill to foreclose the Divine and Pierce mortgages.

The original bill made the following allegation as to payments on the Divine mortgage. After averring that in 1874 Althen built a two-story brick building, with basement, on the mortgaged premises, the bill proceeds: “That ever since its completion, and up to the present time, said Divine and said Plain had rented for cash rent, to divers tenants, the first and second stories of said building, and received to their own use the moneys so paid, with the understanding that such rent should be applied to said mortgage so given to Divine; that Divine and Plain, one or both, have received from such rents about $4000, which would more than pay said note and mortgage.”

The decree found that while Divine held the note and mortgage given to him, he received rents amounting to $2,002.08; that Divine applied said rents in payment of interest on said note to May 1, 1877, and the balance to the indebtedness due from Althen to Divine, but decreed that the rents received should be applied on the note and mortgage, and that the rents received by Plain should be applied on his notes and mortgages, and not on the judgments held by him. There was decree of foreclosure for the balance, the decree ordering that the store lot be first sold. Plain appealed.

Mr. M. O. SOUTHWORTH, Mr. A. J. HOPKINS, and Mr. N. J. ALDRICH, for the appellant:

Where a creditor holds two debts against another, and one is secured and the other not, and payments have been made by the debtor without any direction as to their application, it will be presumed that such payments were credited on the unsecured debt, and the creditor may so apply them. Hare v. Stegall, 60 Ill. 280.

In order to bar a party as a witness in a suit where the defendants are sued in a representative capacity, he must be interested in the event of the suit. He must have a legal, fixed interest in the event of the same,--one that will obtain for him, or exclude him from, the relief he seeks. Where the party has no such interest, any objection goes to his credibility, and not to his competency. Greeley v. Dow, 2 Metc. 176; Stockham v. Jones, 10 Johns. 21; Ely v. Forward, 7 Mass. 24; Bean v. Bean, 12 Id. 19; Kinsley v. Robinson, 21 Pick. 327; Bigelow v. Hyer, 2 Allen, 243; Jones v. Huggeford, 3 Metc. 515; Van Nuys v. Terhune, 3 Johns. Ch. 82; Rapelyed v. Mackie, 6 Cow. 250; Jackson v. VanDusen, 5 Johns. 144; Corbley v. Wilson, 71 Ill. 209; 1 Greenleaf on Evidence, sec. 400; Illinois Central R. R. Co. v. Weldon, 52 Ill. 290.

Whatever the mortgagee's rights may be to take steps to put himself in possession, it lies entirely with him whether he will exercise such rights, and until he does he has no more control of the property than a stranger. 2 Washburn on Real Prop. 157.

The court erred in the order marshaling the assets. The rule of compelling a mortgagee to satisfy his claim out of one fund to the exclusion of another, has no application between debtor and creditor. It applies only as between different creditors. Rogers v. Meyers, 68 Ill. 92.

The fact that a mortgage covers a homestead and also other property which is subject to a subsequent judgment lien, gives the debtor no right to have the latter property applied first to the payment of the mortgage debt, so that he may save his homestead. White v. Polleys, 20 Wis. 503; Dodds v. Snyder, 44 Ill. 53; Jones on Mortgages, sec. 1632; Thompson on Homesteads, sec. 714; Webster v. Bronson, 5 Bush, 522; Jones v. Dow, 18 Wis. 241.

Mr. A. B. COON, and Mr. J. J. FLANNERY, for the appellees Roth, Althen, Schmidt and Glade:

In both the original and cross-bills complaint was made against Frederica Althen, widow of John Althen, and John E. Althen, as heir of the mortgagor, and also against Divine, who were all real and necessary parties to the proceedings. Hence, both Divine and Plain, as such parties to the record and of interest, were incompetent to testify of their own motion, or on their own behalf, or the one for the other, against any person, such as an administrator or heir of any deceased person, as to anything that transpired previous to the death of, or any conversations had with, such deceased person. Laws 1877, chap. 51, sec. 2, p. 475; Boynton v. Phelps, 52 Ill. 219; Merrill v. Atkin, 59 Id. 19; Langley v. Dodworth et al. 81 Id. 86; Pyle v. Oustatt, 92 Id. 209; Branger v. Lucy, 82 Id. 91; Forbes v. Snyder, 94 Id. 374; Pratt v. Pratt, 96 Id. 184.

Divine was interested in the event of the suit. Indorsement of the note ““without recourse” does not relieve him from liability over to Plain for any deficiency in the amount claimed to be due by him on the note, and as it appeared from its face at the date of the assignment. In either case there was an implied warranty on the part of Divine that the amount called for by the note at that date was due and unpaid. 2 Parsons on Notes and Bills, (2d ed.) 21; Linton v. Porter, 31 Ill. 107; Robinson v. McNeil, 51 Id. 225; Tyler et al. v. Bailey, 71 Id. 35.

We do not deny the rule stated as to the application of payments, but contend the evidence abundantly shows there was a direction by the debtor as to their application. We also contend that there was no error in requiring the homestead to be last sold, or requiring the creditor to first exhaust his other securities for his debt before resorting to the homestead. The legislation on the subject shows a clear intent to preserve the homestead superior to paying one's debts, however honest they may be, unless it is expressly waived.

Mr. CHARLES BLANCHARD, for the appellant, in reply:

In chancery a defendant might always testify for a codefendant, if his evidence did not necessarily involve his own interest. 3 Greenleaf on Evidence, sec. 318; Smith et al. v. West et al. 103 Ill. 336; Smith v. Newton, 38 Id. 230.

Even if Divine was interested in the event of the suit, if that interest was balanced he was competent at common law. Dyer v. Martin, 4 Scam. 150; Mixell v. Lutz, 34 Ill. 388; Smalley et al. v. Ettell, 36 Id. 503; Reman v. Buckmaster, 85 Id. 405; 1 Greenleaf on Evidence, secs. 399-420; 2 Id. sec. 318.

If neither Althen nor Divine had made the application of the payments, the court would have applied them as Divine did. Wilhelm v. Schmidt et al. 84 Ill. 183; Hare v. Stegall, 60 Id. 380.

Mr. CHIEF JUSTICE SHELDON delivered the opinion of the Court:

The main question is as to the application of payments. During the time Divine held his note and mortgage he received rents from the store building. But he did not receive them as mortgagee in possession. He never was in possession of the mortgaged premises. The leases were all made by Althen, the mortgagor. It is found by the decree that during the time Divine held the note and mortgage, Althen was indebted to him on other notes to an amount which, with the interest on the note in question, exceeded all the rents Divine received, and that such other notes were paid during that time. We can have no doubt, from the evidence, that these other notes were paid from these rents. The notes being unsecured, Divine had the right to apply the moneys received to their payment, instead of to the...