140 Ky. 376 | Ky. Ct. App. | 1910
Opinion op ti-ie Court by
Affirming.
John E. Miles and his son, James N. Miles, did a milling business in Frankfort in the name of Miles & Son. They owned real property in Frankfort and in Cook county, Illinois. In the year 1891, they mortgaged both pieces of property to the Bank of Kentucky to secure an indebtedness of $18,000. In 1894, they mortgaged the Illinois property to the State National Bank to secure an indebtedness of $14,000. In 1896 the Bank of Kentucky, having knowledge of the second mortgage of the State National Bank on the Illinois property took a second mortgage on the Kentucky property to secure an indebtedness of $8,000. About the same time John E. Miles and his children who were the beneficiaries in a life policy which he held, assigned it to the Bank of Kentucky to secure it in any debt which Miles & Son might then owe or- might, afterwards owe the bank. In 1898,
The Illinois property and the Kentucky together brought $36,500. If the debt of the Bank of Kentucky, $18,000, had been paid out of this fund, there would have been left a balance of $18,500 of which about $13,000 would have represented the balance of the proceeds of the Illinois property, and this would have been insufficient to have paid the debt of the State National Bank. Under the rulings of the court, the debt of the State National Bank was paid in full and so there was less left to be applied to the $8,000 mortgage debt which was secured by the pledge of the insurance policy. The fact that the debt of the State National Bank was bought by the Bank of Kentucky after the sale of the property, did not affect the rights of the parties. The Bank of Ken
Judgment affirmed.