128 F. 1005 | C.C.S.D. Fla. | 1904
The original bill filed herein is for the purpose of foreclosing a mortgage upon a large tract of real estate and certain items of personal property on account of certain indebtednesses which had arisen between the complainants and the defendant Thag-gard and wife, ranging through a series of years. In such bill it is alleged that the codefendants Camp, who have since filed this cross-bill, claimed to have some interest in certain portions of- the real estate, and asked that they be summoned to appear and answer, and show what right and interest they have, and what cause, if any, they have why a decree granting the prayer of the bill should not be made. These co-defendants filed an answer, alleging that at a certain time previous to the accruing of some of the items of indebtedness alleged to have been the basis of the mortgage herein a contract between the codefendant Thaggard and themselves was duly executed, by which Thaggard bound himself to sell and convey to said orators in said cross-bill certain portions of the lands covered by the mortgage, after a certain
I think the law may be plainly and briefly stated that, where the allegations of a cross-bill show facts which would, upon any reasonable construction, justify the cancellation of a contract or agreement which has been made the basis of the original suit, or where any defendant wishes affirmative relief by transfer to him of the legal title of the whole or a portion of the premises in question, a cross-bill will lie; that where rights exist between codefendants growing out of and involved in the matters and things alleged in the original bill, and by which one defendant may be compelled, in order to gain his full rights, to demand affirmative relief, he need not be confined to the allegations of the answer, but may go further, and demand that all questions involved in the suit be passed upon by the court. In this case not only does the cross-bill seek to set aside the effect of the mortgage sued upon, but prays that such mortgage be declared void and of no validity as against their rights in the property covered by the contract.
It is claimed in the demurrer that the original agreement to sell and transfer by the defendant Thaggard was suspended for three years, which time has not yet arirved, and that the only right the orators in the cross-bill could demand would be that they be permitted to enforce their rights at the expiration of the three years from the time of making the supplementary agreement; but a careful examination of that agreement does not show that the parties of the second part agreed to continue the time for the delivery of the lands to all lands, but limited such extension to “such lands as the party of the first part shall not have turpentined.” There is no allegation that there are parts of the
The allegations of the cross-bill as to the purpose of the agreement or the insolvency of the defendant Thaggard can give no right or immediate possession to or enforcement of transfer of title to the cross-complainants, but it would appear by an examination that possibly they may be entitled to some portions of that land in event the indebtedness of the defendant Thaggard to the complainant is shown to be subsequent to the rights of the complainant in the cross-bill, in which event it would seem that such cross-complainant is entitled to affirmative relief to some extent. Wherefore, although the allegations of the- cross-bill do not
It will therefore be ordered that the demurrer to the cross-bill be sustained, with leave for the cross-complainant to have io days to amend the same, if so advised.
An amended cross-bill having been duly filed, a demurrer was sustained thereto, whereupon issue was joined between the complainant and the defendants Camp upon the original bill and answer thereto, and the matter duly referred to a master. The matter then coming on for a hearing upon the master’s report, exceptions thereto, and a final decree, the following opinion and decree was pronounced:
This cause has come on to be heard upon the several exceptions to the master’s report. The first three exceptions are based upon the contention that the suit was brought upon an assignment of debts due to a citizen of the same state as the complainant. It is not considered that this is the case. It is true that the origin of the indebtedness, being an indebtedness to a third party, is set up in the plea; but the history of the transaction between the complainant and the respondent herein shows that the suit is not brought upon these assigned dioses in action, but upon an indebtedness between the parties themselves, and the subsequent mortgage covers these items. The suit does not depend upon the rights of action assigned, but such rights of action ha’d been recognized by the defendant herein, and the amounts thereon had been merged in and security given for an indebtedness between the two parties. Superior City v. Ripley, 138 U. S. 93, it Sup. Ct. 288, 34 L. Ed. 914. It is considered that this suit is brought upon a new contract, not involving a question between citizens of the same state.
This applies also to the fourth and fifth exceptions, which are based upon the same point, although in different words.
The sixth and seventh exceptions are baséd upon the principle that in a case of a mortgage to secure future advances the lien of a subsequent mortgage may be held prior to advances made after the notice has been given to the prior mortgagee. The integrity of this contention rests entirely upon the question as to when the complainant in this case may be held to have had notice of the contract between Thaggard and Camp. This contract, so made, was subsequent to a prior valid and existing lien upon the property claimed to have been transferred, and was subject to all the equities and rights of such mortgage. It is well settled that a mortgage covering future advances for the purpose of carrying on a special business will constitute a valid lien. Such advances as were made upon the prior mortgage were protected thereby, unless the mortgagee was informed and had knowledge that the party had executed a subsequent mortgage or contract constituting a lien. This contract was signed on the .28th of September, acknowledged by one of the parties on the 30th, and by the grantor on the 5th of October, but was not placed on record until the ¿3d of March the subsequent year. In the meantime advances were being made until
It is also contended that there were certain large, amounts paid between these dates which could not properly be classed as advances. The testimony shows that the payments were made upon drafts properly drawn by the defendant Thaggard, and were in the direct line of the business in which he was engaged, viz., purchasing land and timber for turpentine purposes. I therefore find that lien of the outstanding mortgage was superior to the contract of the defendants Camp.
The ninth exception presumes a finding that I do not think is justified by the record. I fail to find that any of the advances made after the knowledge of the contracts had come to the complainant herein have entered into the amount found by the master. It was within the discretion of the complainant to credit the amounts received from the defendant Thaggard upon such portions of the accounts, if they had been kept separate, in the absence of any direction or request to the contrary, as would protect the creditor to the greatest extent. In the event of a secured and an unsecured indebtedness, he had the right to credit the payments to his unsecured indebtedness, and leave, the security on the amount still due.
It has been contended in behalf of the tenth exception that the amount of labor required from the complainant’s counsel in the contest
But while the complainant is entitled to the amount found to be due, there appear to be certain equities in regard to the sale of the lands involved in this suit which would justify a recognition by this court, and I know of no authority of law or principle of equity that permits the mortgagee to determine the mode and manner or order of sale of different pieces of property which might result to the injury of another, unless the same is required by a necessity of protecting the mortgagee in his entire rights. I have heretofore held in this case that the lands covered by the contract of the Camps only passed to them either at the option of the grantor, Thaggard, or by the lapse of three years from the time of, making the supplemental contract (the 28th of September, 1903). If the lien of the complainant can be satisfied by the property not involved in that contract and the use of such timber land for turpentining until that time, the complainant has no reason to object. It will therefore be ordered that, if the amounts found due by the master are not paid within 10 days, the master shall proceed to advertise and sell all of the property covered by the several mortgages in said bill alleged, but in such sale the property not included in and covered by the contracts of Thaggard with the Camps be offered first in such lots as will bring the highest amounts; that then there be offered the right of working, for turpentine purposes, the lands covered by said contract, up to the 28th day of September, 1903; that, if the proceeds of such sales do not equal the amount found to be due by the master, the defendants Camp be permitted to redeem such lands as are covered by their contracts and remain unsold by paying to the complainant any residue of the indebtedness which may then remain due. The right of occupation of such land not to attach until the 28th of September, 1903. It is further ordered that if such defendants Camp, for the space of three days after the residue remaining due is settled and determined, fail and refuse to so redeem such lands, the master will then proceed to advertise and sell the same, and pay therefrom the residue of the indebtedness thus found, together with all the interest, costs, and charges herein incurred and.expended.