Grape Creek Coal Co. v. Farmers' Loan & Trust Co.

63 F. 891 | 7th Cir. | 1894

WOODS, Circuit Judge

(after stating the case). The second and third specifications of error do not, in conformity with the eleventh rule of this court, “set out separately and particularly” the error intended to be urged. An assignment cannot be good, under this rule, if it is necessary to look beyond its terms, to the brief, for a specific statement of the question sought to be presented. Under the first of these assignments, it is urged that the principal of the mortgage debt was erroneously declared due; and under the second, after claiming that all said concerning the first was applicable to this, it is urged, in addition, that the court erred in allowing interest at six per cent., or more than five per cent., on overdue coupons, and on the , principal of the debt from the time when the last coupons matured. There is in the record no assignment of error which properly raises •the question of interest; and in respect to the principal of the debt, whether due or not, it was not only proper, but necessary, that the court should have found the amount unpaid, and decreed its payment out of the proceeds of the sale. There was therefore no error, as specified in the second assignment, even if it were otherwise sufficiently specific, “in finding and rendering a decree for any further or greater sum than the amount due.” But the fifth specification states more definitely that the court erred in decreeing the entire amount of the mortgage indebtedness to be due, and, though it is not so treated in the’ brief, we will consider the question as' presented by that assignment.

By the terms of the bonds the principal debt was not payable until the 1st day of April, 1916, and we find nothing in the conditions of the mortgage which authorized the court to declare the debt due

fctiore that time. There is, confessedly, no specific provision that the principal may he declared due for default in the payment of interest; but from the authority given the trustee in possession, under the first condition, to apply the residue of income upon the principal of outstanding bonds, and, under the second condition, to cause the property to be sold as an entirety, and from the provision of the third condition, that, if the trustee is proceeding to sell the mortgaged premises for default in interest or sinking fund, the mortgagor, at any time before sale is made, may pay all interest then in arrears, costs, expenses, disbursements, and reasonable compensation, and that thereupon the trustee shall discontinue the proceeding and surrender the possession, it is insisted that the power to treat the principal debt as due should be inferred. The inference, we think, is neither necessary nor reasonable. To use the language of the supreme court in Railroad Co. v. Fosdick, 106 U. S. 47, 75,1 Sup. Ct. 10:

“It does not. affect this conclusion that, by the terms of the sixth article of the conditions of the mortgage, it is provided that upon the exercise of the power thereby conferred, resulting in a sale of: the mortgaged premises for a single default in the payment of interest (IE may be one coupon, merely), the property is to be sold ns an entirety, and free of the incumbrance of the mortgage, so as to pass all (he title, both of the mortgagor and mortgagee, and that the proceeds of the sale are to be applied, after the payment of overdue interest, to the payment of the principal of the debt, tltough not yet due. The provision does not, either in terms or in effect, make the whole debt due before the stipulated day of payment. It is simply ¡be application to the case of a sale by the trustees, under the power, of the practice of courts of equity in cases of judicial sales upon foreclosure. In either case the right of the mortgagee to redeem, and liras prevent (he salt', is preserved, on payment, not of the unmatured principal of the debt, but merely of the interest then actually due and in arrears.—the very right which, by the decree now in question, was denied. If authority is needed on such a proposition, it will be found in Holden v. Gilbert, 7 Paige, 208, and Olcott v. Bynum, 17 Wall. 44.”

We find nothing inconsistent with the foregoing in Pope v. Durant, 26 Iowa, 233.

It is contended further that, if (he decree was erroneous in this respect, no harm was done the appellants, because, “by a tender of the amount due, the decree would have been stayed, and the premises not been sold. Defendants could have come into court, and tendered the amount due, and had the proceedings dismissed.” Down to the entry of the decree, the defendants doubtless bad that right; but, once the decree had passed, it was no less conclusive in respect to the amount due than of other matters involved and determined. We cannot agree that the mortgagor’s right to have the proceedings for foreclosure discontinued upon payment; of interest in arrears, costs, etc., was so far separate and independent that it needed not to be (unbodied in the decree, and that the court would have enforced it, as against the trustee, at any time before sale, upon any of the defendants tendering the amount required, and moving to have the case dismissed. If the trustee had been proceeding under the power, as was the case in Tiernan v. Hinman, 16 Ill. 400, the mortgagor’s right, to prevent a sale by paying (he overdue interest .might have been asserted, as provided by the tenas of #the deed, at auy time before sale; but, when the principal debt has been declared due by a decree of court, it must be so treated for every purpose, until in some lawful way the decree shall have been modified or set aside. Under such a decree the debt cannot be regarded as due for one purpose, and not due for another purpose. The rights of the trustee and of the mortgagor in this respect were correlative, and it was error for the one to take an adjudication which, either in terms or by necessary implication, was inconsistent with the right of the other.'

It is shown by a supplemental transcript that a sale made under the decree had been reported before the appeal, and afterwards confirmed; and it is insisted that for that reason the decree, if erroneous, may be modified, but should not be reversed, as against the purchaser. Brignardello v. Gray, 1 Wall. 627. But whether or not the sale in this case was bona fide, and should stand, is not a question which can be determined now, or which.should be allowed to affect the character or scope of our action on the appeal. Of the amount deflated due, which the mortgagor was required to pay within twenty days in order to save the mortgaged property from sale less than one-tenth was actually due. The error, therefore, was a substantial one, which, to the extent possible, should be corrected by reversing the decree.

The objection that the decree left uncertain the amount -to be paid in order to prevent a sale we do not consider important. It amounted to no more than a reservation of power by the court to include in the decree a sum sufficient to pay, besides taxable costs, the trustee's compensation, counsel fees, and other expenses or disbursements which should thereafter be allowed by the court. The items enumerated are of the nature of costs, which, by common practice, and from necessity, are often left, when decrees or judgments are pronounced, for subsequent taxation. Vo harm can result, because it is always in the power of any party interested to move for a determination of whatever in such particulars had been left at large.

In respect to the after-acquired property, it is not claimed that the mortgage was invalid or ineffective as between the parties to the instrument. If, therefore, the court erred in extending the lien of the mortgage over property of that kind, the judgment creditors alone were harmed by the ruling, and the error should have been assigned by them, or in their behalf, only. MacDonald v. U. S. (by this court) 63 Fed. 426, and cases there cited. But, if properly presented, the question can hardly be deemed to haA'e the general scope given it in the discussion. The theory upon which courts of equity extend the lien of a mortgage to after-acquired property is “that the mortgage, though inoperative as a conveyance, is operative as an executory agreement, which attaches to the property when acquii ed.” Borden v. Croak, 131 Ill. 68, 22 N. E. 793. While in this instance the mortgage, by the general terms of the granting clause, covers all other lands in Vermilion county, besides those described, Avhich the company shall acquire, there is an express covenant for further conveyance and assurance, Avhich is restricted to future-acquired property purchased by the company “for use in the working and carrying on of its said mines” It would seem, therefore, that this mortgage, while valid in respect to lands acquired for mining purposes, should not be construed to include, and it does not appear that by the decree below it was made to include," lands which were not purchased for use in the company’s business. We think there was no error in this particular. For the error of the court; in declaring the principal of the mortgage debt due, the decree below is reversed.