152 P. 36 | Mont. | 1915
delivered the opinion of the court.
This is an appeal by the plaintiff, the First National Bank of Miles City, Custer county, from a decree rendered against it and in favor of defendant Commercial State Bank, of the same place, hereafter referred to as the defendant bank, in an action brought by the former to foreclose a mortgage executed to it by the defendant Marshall. This defendant failed to appear and his default was entered. Though formal issues were made between the plaintiff and the defendant bank, the cause was submitted for decision upon an agreed statement of facts, which may be epitomized as follows:
On December 13, 1910, Marshall, being indebted to the plaintiff in the sum of $2,290.85, executed to it his promissory note therefor, due in six months after December 30, 1910, with interest at ten per cent per annum, and also attorney’s fees in ease resort to legal proceedings was necessary in order to enforce collection. To secure payment of this note he executed and delivered to the plaintiff a mortgage upon certain horses and other personal property in Custer county. The mortgage
This mortgage was duly acknowledged and recorded. Theretofore, on November 29, 1910, Marshall, being indebted to the defendant bank in the sum of $15,670, executed to it the two notes mentioned in plaintiff’s mortgage, the one for $7,670, due and payable in six months thereafter, and the other for $8,000, due and payable in twelve months, each containing the same stipulations for interest and attorney’s fees as that due to plaintiff. To secure the payment of them he executed to the defendant bank a mortgage upon the property included in plaintiff’s mortgage. The consideration named therein was the sum of $15,670, and it was stipulated that this sum, with interest, should be paid at the expiration of one year from date, according to the terms and tenor of the two notes. Both mortgages contained the usual stipulations prohibiting removal of the property, etc., and, in case the notes secured by them should not be paid at maturity in accordance with their terms, authorizing the mortgagees, at their option, to take possession of it and cause it to be sold, and to apply the proceeds to the discharge of the indebtedness. None of the indebtedness due the plaintiff was ever paid, except the sum of $290’ paid on August 23, 1911. On July 10, 1911, plaintiff’s mortgage was renewed by the filing of a renewal affidavit as provided by the statute. On August 18, 1911, Marshall paid to the defendant bank $650, and on October 11, $7,823, both of which sums were applied to the discharge of the note for $8,000. These amounts consisted of' the proceeds of sales of portions of the mortgaged property made by Marshall with the consent of both mortgagees. When this action was brought, there was due to the defendant bank upon the $8,000 note a balance of $221.78, besides the full amount of the note for $7,670, with interest. On January 12, 1912, the defendant bank filed an affidavit in renewal of its mortgage, in
In submitting the cause as they did, it was the purpose of the
The district court held that the lien of the defendant bank was in no wise impaired by its omission to renew its mortgage upon the maturity of the first note, and hence that it was entitled to have the funds in the hands of the clerk applied to the balance due it. The sole question presented by the appeal is whether this holding is correct. The contention of counsel for plaintiff is that, though the amount due the defendant bank prior to the mortgage transaction was a single debt, the taking of the two notes converted it into two separate debts, or, in any event, into a debt due and payable in installments, and that it was incumbent upon it to file the affidavit of renewal within sixty days after the first note matured, or resort to the alternative of taking possession of the property, at the peril of losing its lien as to this note. As appears from a memorandum opinion found in the record, the district court concluded, upon the facts, that the debt, though payable in two installments, was a single debt, and that the necessity for renewal arose only after the maturity of the second note. The conclusion that the two notes represented a single- debt, and were so regarded by
But, aside from these considerations, does an arrangement between a creditor and his debtor, by which the latter is permitted to discharge his obligation in installments, change the character of it, so that each installment becomes a separate debt ? We think not. If a single note had been executed by Marshall, payable in two or more installments, it could not be said that each installment was a distinct debt. With no greater propriety may it be urged that the execution of two notes wrought a different result. True, such an arrangement may affect the manner and time of enforcing payment of the different installments, but the indebtedness and the obligation to discharge it remains the same.
The right to hypothecate personal property as security by means of a chattel mortgage, as this expression is ordinarily used, is of statutory origin. Its validity in the first instance,
Section 5763, so far as it is pertinent here, provides that: ‘‘Every mortgage of personal property made, acknowledged and filed as provided for by the laws of this state, may be renewed at any time within sixty days after the maturity of the debt or obligation secured thereby, in case such debt or obligation or any part thereof, be unpaid or unfulfilled, by the filing of an affidavit showing the date of such mortgage, the name of the mortgagor and mortgagee, the date of filing the same, the amount of the debt or obligation secured thereby, and the amount of the debt justly owing at the time of filing such affidavit, or the conditions of the obligations unfulfilled; * * * Provided that in case the debt for which any mortgage is given as a security is payable in two or more installments any one or more of which are to become due and payable after one year from the date thereof, then in such event the affidavit of extension of such mortgage herein provided for must be made and filed within sixty days after the first installment of said debt falls due whether such installment be paid or not and must be made and filed within sixty days after each subsequent installment falls due whether the same be paid or not until the entire debt secured thereby shall be fully paid. And provided further that such installments shall become due and payable not more than one year apart, and the first of said installments shall fall due not more than one year from the date of such mortgage. ’ ’
The former section clearly recognizes the right of parties to secure debts payable in installments, whether the agreement for payment is embodied in a single note or in several, for it expressly declares the lien valid if contracted for in good faith, as against creditors of the mortgagor, or purchasers or encumbrancers, until the entire debt or obligation has matured, and until the expiration of sixty days thereafter. The use of the
The stipulation authorizing the mortgagor to take possession
Having reached the conclusion that the decision of the district judge was correct for the reason stated by him, it is not necessary to consider further whether it should be sustained on the additional ground urged by counsel for defendant bank,
The judgment is affirmed.
Affirmed.