Storms v. Storms

66 Ky. 77 | Ky. Ct. App. | 1867

JUDGE ROBERTSON

delivered the opinion on the court:

The decree for distribution among the mortgagees allows much more to C. 0. Storms and Nathan Storms than the mortgage constructively intended to secure to them. The alleged debt to each of them is specified in the mortgage, and no other or essentially greater debt can be allowed to either of them, consistently with the rights of the appellant and other creditors. The mortgage describes the debt to C. C. Storms as due by “ a note or notes for about three hundred and fifty dollars,” and the debt to Nathan Storms as “ an account for about fifty dollars.” This cannot be construed as including, as adjudged by the circuit court, six notes to C. C. Storms, amounting, in the aggregate, to more than fifteen hundred dollars, or notes and accounts to Nathan exceeding nine hundred dollars. If the note or notes to C. C. Storms had exceeded three hundred and fifty dollars only to a small extent, “ about three hundred and fifty dollars " might have constructively embraced the actual amount; but when the excess is so enormous and incredible, about three hundred and fifty dollars must be fixed at three hundred and fifty dollars; and so, more especially, in the case of Nathan, must the debt secured by mortgage be fixed at fifty dollars. This principle, so reasonable and just, is authoritatively recognized; and, consequently, in these particulars, at least, the circuit court erred in overruling the exceptions to the commissioner’s report. But, had there been no exceptions, errors so flagrant on the face of the record ought not to have been ratified by the court,'whose agent’s only authority was to report facts for its inspection and approval, and to facilitate, but not to dictate, its ultimate decision. This, too, is obvious and well-settled.

0. 0. and N. Storms being thus not entitled, as mortgagees, to more than the mortgage recognized and identified, the secondary question arises, whether they are entitled, as insecured creditors, beyond that extent, to judgments in personam. And this will depend on the competency and credibility of the mortgagor, who is the son of one of them and the brother of the other. His wife having obtained a divorce, his testimony against her interest is competent, as it divulged no communication between them during coverture, and as he apparently testified against his own interest. But the significant fact that so poor a man, intending to secure his own father and brother with other creditors, should make such incredible blunders in both the amount and character of their debts, while he remembered well and described accurately his indebtedness to strangers included in the same mortgage, shakes, if it does not destroy, his credibility, which may, by further investigation, be, perhaps, fortified or destroyed. But as the case will be remanded, and the credibility of this witness will not affect the distribution of the proceeds of the mortgaged property, we refer it for ulterior consideration by the circuit court, if it shall become important as between creditors insecured by the mortgage.

For any debt paid by C. C. or N. Storms as surety to a creditor embraced by the mortgage, he will be entitled to stand as a subrogated beneficiary.

For the errors before suggested, without intending to conclude any other, the judgment is reversed, and the cause remanded for further proceedings for adjusting the claims of N. and 0. C. Storms, which may possibly be so curtailed by further testimony, as to credibility and other ..facts, as to leave something to the appellant, whose deed of trust will prevail against all except the mortgagees and other bona fide creditors at the date of it. We can.not, therefore, now decide that she is not prejudiced by the judgment appealed from. In the meantime the mortgagees, whose recited debts are uncontested, may receive their respective dues out of the fund in the power of the court under the sale of the mortgaged property. And if antecedent creditors, not secured by the mortgage, shall establish their title to the residue, it should be finally distributed among them pro rata. But if such claims shall fail to exhaust the fund, whatever may be left should be adjudged to the appellant.