| Ind. | Dec 1, 1855
Bill in chancery to foreclose a mortgage. The bill alleges that in April, 1849, William Osborne and wife executed a deed of mortgage to Jared Lake, for a tract of land (describing it) containing thirty-seven acres and eight hundredths, except two lots, numbered one and two, .in Osborne’s addition to the town of Lodi, which were expressly reserved out of the mortgage; that the mortgage was given to secure the payment of three promissory notes, made by Osborne, of even date with the mortgage, payable to Lake, one for 675 dollars, due three months from date, another for 675 dollars, due six months from date, and one for 1,350 dollars, due twelve months from date, and all of them waiving the benefit of valuation laws.
It is further stated, that Jcvred Lake assigned the note for 1,350 dollars to William A. Lake, without recourse; and also the note for 675 dollars, which had six months to run; and that William A. Lake assigned the note for 1,350 dollars to Hough and Turner, for the benefit of the other complainants, in the following proportions, viz.: to Clark and Groesbeck 610 dollars and 85 cents, with interest from July 1,1849; to Bates and Whitcher, 233 dollars and 88 cents, with interest for the same period; to Com-stock tSf Co., 227 dollars and 46 cents, with like interest; to Bruce, Stewart 8f Co., 276 dollars and 40 cents, with interest as above; and that William A. Lake assigned the note for 675 dollars, due in six months, to Hough and Turner. All these assignments were without recourse.
By the original mortgage, it was stipulated between Osborne and Lake, that Osborne might sell lots in the town of Lodi, pay the money to Lake, to be applied upon the two notes first due; and that Lake should release the lot so sold to the purchaser. It was further agreed, that after the two notes of 675 dollars each were paid, Osborne might sell lots in Lodi on such terms as he pleased, pay over half the proceeds to Lake, to be applied on the third nóte, and Lake -to release the lots sold from the mortgage as before. The addition to Lodi was laid out on the premises embraced in the mortgage.
It is further stated that the plat of this addition was not at the date of the mortgage recorded; that lots one and two, excepted out of the mortgage, were vacant lots of little value; that Osborne re-platted the town, and changed the numbers of the lots, so as to make one and two cover two improved lots, having a dwelling and store on them, and worth 2,000 dollars, and fraudulently recorded the new plat, for fhe purpose of hindering Lake and others from realizing their claims; that after the date of the mortgage and recording of the new plat, Osborne sold lots one and two on that plat to his brother for 1,300 dollars, with a full knowledge of all the facts; that the sale was a fraudulent combination, without consideration, and that the price was never accounted for by William Osborne to Lake agreeably to the mortgage.
It is further stated, that Lake assigned the note for 675 dollars, due in three months, to JJrasmus W. Weaver, one of the defendants; that upon this note, in October, 1849, Weaver obtained a judgment at law in the Parke Circuit Court against Osborne; that in May, 1850, execution was issued and levied upon lots one and two in the
The complainants allege and claim that, by the above acts, Weaver is estopped from claiming any interest in the mortgage or in its proceeds when foreclosed.
Weaver answers, and only so far as he denies the material parts of the bill, or claims some right, need his answer be noticed. He denies the transfer of the two notes last due; he claims the priority of right to the mortgage because his is the first note due; insists he is not estopped, &c.; avers that his execution was levied on lots one and two, according to the first plat, &c.; and denies the allegation on that point in the bill. The other material facts of the bill are admitted, denying only certain conclusions, &e. The other defendants confess the facts alleged.
The cause was set down for final hearing on the bill, answer of Weaver, exhibits and evidence. Decree of foreclosure, ordering the residue of Weaver’s note to be first paid out of the proceeds, and the other two notes in the order in which they fell due.
It was further decreed that Osborne’s new plat of Lodi, was fraudulent and void.
The complainants prosecute error.
We are of opinion that the decree should be sustained. It is in strict accordance with the rule laid down in the Bank v. Tweedy, 8 Blackf. 447" court="Ind." date_filed="1847-07-12" href="https://app.midpage.ai/document/state-bank-v-tweedy-7031432?utm_source=webapp" opinion_id="7031432">8 Blackf. 447, and followed in Stanly v. Beatty, 4 Ind. R. 134. Weaver held the note first due, and was entitled to be first satisfied. The rule is, that notes due at different times are like so many successive mortgages. The first due has the priority, and the others come in, in the order in which they mature. Unless Weaver has in some way waived that priority, or is estopped from asserting it, his right is clear.
But it is contended that by the action at law, and the proceedings under it, Weaver waived the mortgage, and is estopped thereby from claiming anything under it. It is
Upon the pleadings and evidence, Weaver was entitled to a priority out of the proceeds of the mortgage for the residue of the claim.
The assignment of the mortgage itself to Miss Sisson, and by her to Clark and Groesbeck, for the express purpose of securing the notes last due, could not divest the lien of the note held by Weaver. The face of the mortgage was notice to every holder what it was executed to secure. They must be taken to know the law as to the priority of lien; and that the transfer of the notes earned with it the security afforded by the mortgage. The only thing easily perceivable as to the transfer of the mortgage security without the notes, was its futility.
There is no controversy about the fraudulent plat of Lodi. On the confession of the Osbornes, the Court correctly decreed it void.
The decree is affirmed with costs.