211 Wis. 397 | Wis. | 1933
The following opinion was filed March 7, 1933 :
The appellant contends that the trial court erred in holding (1) that the payments of $2,500 made by Mr. Saxe to Hackett, Hoff & Thiermann, Inc., trustee, constituted payment pro tanto of the bonds and coupons which became due on June 1, 1931, and discharged the mortgagor to that extent, and (2) that the payments made to the First Wisconsin Trust Company subsequent to June 1, 1931, were not properly applicable to. the payment of any bonds or coupons which matured June 1, 1931, or any part thereof. Although counsel for appellant makes an able argument based on the proposition that the bonds are negotiable and that payment of negotiable' instruments can be effected only by payment to the holder thereof, we do not decide this case on that ground. In the case of Pollard v. Tobin, post, p. 405, 247 N. W. 453, bonds containing identical provisions with the bonds herein are held to be negotiable.
The questions which we shall consider are: What was the nature of the instalment deposits made by the mortgagor during the six months prior to the time ending June 1, 1931 ? Was the trustee, in holding the money deposited with it “as additional and collateral security,” the agent of the mortgagor or of the bondholders?
We think these questions can be answered in but one way. The deed of trust specifically and plainly provided that the mortgagor would “pay to and deposit with the trustee” on the first day of each and every month one-sixth of the total
“The payment to the trustee not being authorized by the terms of the trust deed, it is clear that it had no authority to receive payment for the bondholders merely because it was trustee. It is true that the coupons and bonds were payable at the office of the Trust Company, but they were so payable only when due. The fact that the bonds and interest coupons were made payable at the office of the Trust Company did not make the Trust Company the agent of the bondholders to receive payment. Money deposited with the Trust Company for that reason remained the property of the payor, and if lost it was the loss of the payor. . . . The authority of the trustee to act for the bondholders is prescribed and limited by the terms of the trust deed, and a payment to the trustee merely as trustee cannot be held to be payment to the bondholders, unless made when and as prescribed by the terms of the deed. Miller v. Mitchell, 58 W. Va. 431, 52 S. E. 478; Kransz v. Uedelhofen, 193 Ill. 477, 62 N. E. 239; Fortune v. Stockton, 182 Ill. 454, 55 N. E. 367; Schroeder v: Wolf, 227 Ill. 133, 81 N. E. 13.”
The language “unless made when and as prescribed by the terms of the deed” is seized upon as supporting the contention of respondent Saxe. He contends that the moneys
It is our opinion that the court erred in construing the instrument in such a way as to make the $2,500 deposit a pro tanto payment of the bonds due June 1, 1931. This being our conclusion, it necessarily follows that the moneys now on deposit with the plaintiff must first be used in paying the balance of the amount still due and unpaid on the bonds which matured on June 1, 1931, rather than in paying the bonds which matured subsequently. The deed of trust specifically provides that the monthly payments “shall be paid and applied by the trustee to the payment of the instalments of interest and principal in the order .of their maturity, until such funds are exhausted.”
By the Court. — Judgment reversed, with directions to enter judgment construing the mortgage and deed of trust herein in accordance with the opinion.
A motion for a rehearing was denied, with $25 costs, on May 9, 1933.