46 Kan. 707 | Kan. | 1891
Opinion by
Action by the plaintiff to foreclose a chattel mortgage, begun in the district court of Barber county, Kansas, October 2,1886. August 30, 1886, the firm of Lovejoy & Glasscock, being indebted to the plaintiff in the sum of $10,000 and accrued interest, executed a chattel mortgage to C. J. Lovejoy to secure said indebtedness, which mortgage was filed in the office of the register of deeds of Barber county September 1, 1886, at half-past 7 o’clock A. M. On the same day Lovejoy & Glasscock executed a chattel mortgage to C. J. Lovejoy, to secure an alleged indebtedness of said firm to him, the said C. J. Lovejoy, in the sum of
“findings of fact.
“1. The firm of Lovejoy & Glasscock executed the mortgage described in the plaintiff’s petition, and delivered the same to C. J. Lovejoy.
“2. At the time of the execution of said mortgage, the firm of Lovejoy & Glasscock was justly indebted to plaintiff to the amount of the note described in the petition, which is the indebtedness to the First National Bank of Emporia, in said mortgage described, and was also justly indebted to the National Bank of the State of Illinois, which is also described in said mortgage, neither of which debts has been paid.
“3. At the time of the execution of said mortgage, the said C. J. Lovejoy was a member of the firm of Lovejoy & Glass-cock, and íiable for all the debts of said firm. At and prior to the time of the levy of the several attachments mentioned in this case, the said C. J. Lovejoy was in the actual and exclusive possession of the property involved in this action, claiming the same under said mortgage.
“4. The said mortgage was given to hinder, delay and defraud the creditors of the firm of Lovejoy & Glasscock, which*709 said intent was known to and participated in by the defendants, C. J. Lovejoy, H. C. Lovejoy, and A. C. Glasscock.
“5. The plaintiff had no knowledge or notice of such intent, and did not participate therein.
“6. The value of the mortgaged property was not in excess of the debts described in said mortgage.
“ 7. At the time of the execution of the notes to the First National Bank of Emporia, and the National Bank of the State of Illinois, mentioned in the chattel mortgage set out in •the petition, the defendant G. J. Lovejoy was a member of the firm of Lovejoy & Glasscock, and he was one of the principals of said notes, and not simply a surety therein.
“8. At the time of the commencement of the action the defendants, Eidenour, Baker & Co., the National Bank of the State of Illinois, Kuh, Nathan & Fisher, the Alcott Packing Company, the Gauss-Shelton Hat Company, and Charles Nelson, each had a valid attachment lien upon the property, or some portion of it, which was included in the chattel mortgage set out in the plaintiff’s petition, and which' was taken possession of by the receiver herein.”
“conclusions of law.
“As conclusions of law based upon the foregoing findings of fact, the court finds that the chattel mortgage set out in plaintiff’s petition is void; and that plaintiff has no right to or lien upon any of the funds in the hands of the receiver herein, and that the defendants, Eidenour, Baker & Co., the National Bank of the State of Illinois, Kuh, Nathan & Fisher, the Alcott Packing Company, the Gauss-Shelton Hat Company, and Charles Nelson, are entitled to said funds in the hands of the receiver in accordance with their several attachments.”
It is asserted that all the evidence which was received and considered on the trial of the cause in the court below is not returned in the record to this court; and an examination of the record seems to sustain the claim. But as, from our view of the case, the findings of fact made by the court below are not to be disturbed, we have not examined the record to see whether sufficient evidence is returned to sustain such findings.
The next contention of the defendants is, that there is such a want of parties in the case as presented to this court that
“It is admitted by the plaintiffs that the goods in controversy were attached in the case of Ridenour, Baker & Co. and the case of the National Bank of the State of Illinois against the Lovejoy-Glasscock Trading Company, otherwise Lovejoy & Glasscock, H. C. Lovejoy, and A. C. Glasscock, also Kuh, Nathan & Fisher against the same parties, in actions pending in the district court in Comanche county, Kansas; that the levying of the attachments and all proceedings in said cause were regular; that judgments have been procured in said causes against all the defendants in the following sums: In favor of the National Bank of the State of Illinois, for the sum of $21,500; in the case of Kuh, Nathan & Fisher, $2,100; and in case of Ridenour, Baker & Co., for $1,907.45, and that said judgments have not been paid.”
There is no evidence in this record of the pendency of any suit on the part of the Alcott Packing Company, the Gauss-Shelton Hat Company, or Charles Nelson, or any other party, against Lovejoy & Glasscock, not included as defendant here. There is no judgment in favor of any other parties against Lovejoy & Glasscock, affecting the goods in controversy, so far as we can learn from the record. It is true that the court in its 8th finding says that, in addition to the parties to this record, the Alcott Packing Company, the Gauss-Shelton Hat Company and Charles D. Nelson each had a valid attachment lien upon the property, or some portion of it, which was included in the chattel mortgage set out in plaintiff’s petition.
In the case of Eastman v. Foster, 8 Metc. (Mass.) 19, it is said:
“The court are of the opinion that the mortgage made by Cushmans, the principal debtors, to Eastman, the surety, conditioned to pay the notes and indemnify him, did create a trust, and an equitable lien for the holders of the several notes; that the mortgagee held the property subject to such trust; and that it created an equitable lien thereon for the security and payment of the specified debts.”
In Bank v. Lee, 27 Am. Dec. 713, it is held:
“ Property mortgaged to a surety to secure him for indorsing the mortgagor’s note, whether such property be real or personal, may be subjected to the payment of such note by a bill filed by the creditor, where the debtor is insolvent. In such,case the creditor need not levy execution so as to obtain a lien upon property mortgaged to a surety for the same debt for his indemnity, as he has an equitable lien upon the property so mortgaged. The security or fund is created for the payment of the debt, and is a trust existing for that specific purpose, and whether the creditor or the surety be trustee is very immaterial. The trust is created ultimately for the benefit of the creditor.”
In Russell v. Clark, 7 Cranch, 69, the court declare —
“That the person for whose benefit a trust is created, who is ultimately to recover the money, may sustain a suit in equity to have it paid directly to himself.”
“In some states a distinction seems to be drawn between cases where security is given for indemnity only, and where it is given both for indemnity to the surety, and to secure the debt. Where it is given to secure the debt as well as indemnity, there would seem to be little doubt that the creditor, whether cognizant of the assignment and its purpose or not, at the time of the assignment, could, when it came to his knowledge, avail himself of it as effectually on maturity of his debt as he could had it been assigned to him directly. But when the assignment is for indemnity only, some courts have held that the surety’s right to apply the security as he pleased is inconsistent with the idea of a trust in favor of the creditor, and that*714 the creditor can only reach the security by way of subrogation after the surety has been damnified, actually or constructively. The great weight of authority, however, is against the proposition that the creditor’s right is rooted in the doctrine of subrogation. The assignment of security by the principal to his surety is an appropriation of funds for the ultimate discharge of the debt for which he is holden. The surety has the right to apply the security directly to the payment of the debt. If the surety pays with his own funds, he keeps his principal’s debt on foot against him, and then applies the security to its payment. Thus, in any event, the funds of the principal are made to satisfy the principal’s debt, and this accords with the purpose of the principal when he gave the security. If the surety, after assignment of the security, becomes insolvent, or by any act of the creditor is discharged from liability, he holds the security in trust for the creditor.” (Cullum v. Br. Bank, 23 Ala. 797; Clark v. Ely, 2 Sandf. Ch. 166.)
“The clear deduction from the cases is, that an assignment of securities by the principal to his surety for indemnity merely raises an implied trust in favor' of the creditor, which, on maturity of his debt, he may enforce, whether the surety has been damnified or not, and irrespective of the question whether the surety or principal, either or both, are solvent.”
(New Bedford Inst. for Savings v. Fairhaven Bank, 9 Allen, 175; Kramer’s Appeal, 37 Pa. St. 71; Rice’s Appeal, 79 id. 168; Insurance Co. v. Ledyard, 8 Ala. 866; Moore v. Moberly, 7 B. Mon. 299; Curtis v. Tyler, 9 Paige, 432; Ten Eyck v. Holmes, 3 Sandf. Ch. 428; Paris v. Hulett, 26 Vt. 308; 1 Story, Eq. Jur., § 499 (Redf. Ed.); Brandt, Sur., §293.)
“A mortgage deed, given by the principal maker of a promissory note, conditioned that the principal will pay the note and save the surety harmless, creates a trust and an equitable lien for the holder of the note, and the surety holds the mortgaged property subject to such trust and lien, even after the holder’s claim on him to pay the note is barred by the statute of limitations, and though the property, as between the mortgagor and mortgagee, may have become absolute by foreclosure. The trust created by such mortgage is not secret; and when the mortgage is recorded, it gives constructive notice of the trust to all creditors-and purchasers, so that they cannot, by attachment or grant, take it discharged of the trust.” (8 Mete., Mass., 19.)
“The beneficiary will be presumed to have accepted the fund deposited or raised for the ultimate satisfaction of his demand. It is the trust fund, and not the trustee as an individual, that gives a court of equity jurisdiction; and having the fund under its control, the court will decree in favor of the parties entitled.” (Breedlove v. Stumph, 3 Yerg. 257.)
“The assent of the person selected as trustee is not necessary to the validity of the deed. If he refuse to execute it, a court of chancery will execute it. The assent of the beneficiary in the deed may be given any time after the deed is executed, and, in the absence of proof to the contrary, will always be presumed.” (Field v. Arrowsmith, 3 Humph. 442.)
*716 “ It will be presumed on the part of the beneficiaries under a deed of trust, in the absence of proof to the contrary, that each accepts the provisions made for his benefit, and such acceptance may be given at any time after the conveyance is made, unless renounced or waived; and such acceptance, in fact, will relate back to the day of registration.” (Furman v. Fisher, 4 Coldw. 626; 94 Am. Dec. 210.)
We are of the opinion that the court below was mistaken in its conclusion of law. upon the facts as found. The judgment of the court below is therefore reversed, and the cause remanded with instructions for the court below to enter a decree in favor of the plaintiff for the foreclosure of its mortgage, and the application of the proceeds thereof to the payment of its debt.
By the Court: It is so ordered.