89 A. 838 | R.I. | 1914
This is a bill in equity brought against Lietuviska Parapia Po Vardu Wisu Swenta, a corporation under the laws of Rhode Island, John Stanelun, Annie Stanelun, Joseph Barnatowich, Eva Barnatowich and Dominic Barnatowich to foreclose a certain mortgage for $500 given by the above first named respondent to William Swietlowich, the assignor of the complainant Rogis, and also to restrain the said respondents from foreclosing a mortgage of $3,500.
The said respondent corporation is a Lithuanian Church Corporation having a house of worship on River Avenue, in the City of Providence. In the fall of 1898, this church corporation, then recently organized, was contemplating the erection of a church edifice. Sometime in the month of October of that year, a meeting of the prominent parishioners of the church was held at the office of the priest or pastor for the purpose of devising means for raising the funds which would be required in the erection of the church building. At this meeting Father Mickiewitcz, the parish priest, William Swietlowich, and the respondents, Joseph Barnatowich and John Stanelun, were present. This meeting not having been productive of any satisfactory result, the same parties met again on the following day at the office of James A. Williams, Esq. At this second meeting in the office of Mr. Williams, the church corporation executed a mortgage for $500 to Swietlowich, and Swietlowich paid over that sum to the church corporation. The mortgage referred to contained the following provision: "This conveyance is made subject to a prior mortgage of $4,000 given by this grantor to John Stanelun and Joseph Barnatowich." *229 This $500 mortgage is dated and was acknowledged October 21, 1908, and was recorded January 21, 1911.
At the time that the $500 mortgage was executed there was no mortgage for $4,000 upon the church property, nor has any such mortgage since been placed thereon. After the execution of said $500 mortgage, some effort appears to have been made, on the part of the church corporation, to negotiate a mortgage upon the church property for the sum of $3,500, such efforts proving unsuccessful for the reason that investors were not satisfied with the security. In this emergency a plan was formulated for raising the sum of money desired by negotiated a mortgage which should include and cover not only the church property, but the individual property and estates of Stanelun and Barnatowich. Such a mortgage was negotiated and the proceeds thereof were applied to the building of the church. None of the proceeds of this mortgage were received or appropriated by either Stanelun or Barnatowich. This $3,500 mortgage was made to Abraham T. Petow, and was later, on February 24, 1910, assigned by Petow to William R. Randall, such transfer being recorded on the same day.
On February 23, 1912, Randall assigned said $3,500 mortgage to Dominic Barnatowich and Annie Stanelun, they being respectively the brother and wife of Joseph Barnatowich and John Stanelun whose property had been included and covered by the church mortgage. It will be observed from these dates that the mortgage to Petow and the subsequent transfer to Randall were both executed and recorded prior to the recording of the $500 mortgage.
Later, the holders by assignment of the $3,500 mortgage, Dominic Barnatowich and Annie Stanelun, released and discharged from the operation thereof the individual property of Stanelun and Barnatowich which was included therein. This release and discharge was made by the holders of the mortgage without consideration, that is to say, such release and discharge was effected without the payment to the holders of the mortgage of any part of the sum secured thereby. *230
The holders of the $3,500 mortgage, claiming that they arebona fide holders for value, assert their right to foreclose their mortgage as a first mortgage upon the church property alone, leaving the complainant to satisfy his mortgage for $500 from the balance, if any, which might be left. We do not think that in equity they can be allowed to do this. If it be conceded that Randall was a bona fide holder for value and without notice of the complainant's mortgage, that fact would not necessarily be sufficient to also make Dominic Barnatowich and Annie Stanelun, the brother and sister, respectively, of Joseph Barnatowich and John Stanelun, bona fide holders without notice simply because they are the assignees of a bona fide holder without notice. It is not claimed that these respondents, Dominic Barnatowich and Annie Stanelun were ignorant of the existence of the $500 mortgage, or that they were uninformed as to the conditions under which such last named mortgage had been obtained. Under these circumstances Dominic Barnatowich and Annie Stanelun, can have no better position than their assignor would have had with like notice. The Bergen Savings Bank v. Barrowset al.,
It is a well established rule of equity that where a mortgagee holds a prior mortgage on two parcels of land and a subsequent mortgagee holds another mortgage on but one of such parcels, the former mortgagee must first seek satisfaction from the property which the latter cannot touch. This is the doctrine known as the "marshaling of securities." Shewmaker v. Yankey,
66 S.W. 1, 2, 23 Ky. L. Rep. 1759; Ingalls Stockman v.Morgan, Ex'x,
The respondents claim that they as assignees succeeded to the rights to which Randall would have been entitled had he retained the mortgage. In support of this position the respondents refer to the case of Coombs v. Aborn,
For these reasons we think that the complainant is entitled to first satisfy his $500 mortgage from the church property.
The appeal of the respondents is dismissed, the decree of the Superior Court is affirmed, and the cause is remanded to said court for further proceedings.