Weill v. First National Bank

11 S.E. 277 | N.C. | 1890

In our judgment, the debt of the mortgagors, in favor of the defendant and secured to it by the mortgage mentioned, was discharged several years before this action began, and hence the claim of the defendant to the property in controversy is unfounded. This appears from the purpose of the mortgage, its terms, the stipulation contained therein, the facts found by the court, and (7) the legal effect of the whole taken together.

The purpose was to secure the payment of the three notes specified. To that end, the property was delivered to the possession of the defendant, and its particularly designated agent was "to receive and retain such possession" for it, and he was "authorized and empowered as such agent only to sell and dispose of the said furniture and merchandise from time to time, and appropriate the proceeds of said sales to the payment of said three notes, or any other notes that may be given in renewal or substitution of the same, with the interest thereon." The property was thus to be sold and the proceeds of sale to be applied at once — not at some indefinite time in the future — to the payment of the notes. It was not made necessary after such sales to obtain the assent, or consent, of the mortgagors to such appropriation; such consent had already been given by the express terms of the agreement. The agent received the money, proceeds of such sales, not to hold the same for the mortgagors or to await something to be done by them, but solely for the defendant, and in payment of so much of the mortgage debt as it was sufficient to discharge, whether proper credits were entered or not. The money so received, the contract at once appropriated it, certainly in the absence of modification of that contract. There was no agreement in terms, or appearing by implication, in the mortgage deed, that the mortgagors might use the proceeds of such sales from time to time, and indefinitely; nor, so far as appears, was there any oral agreement to that effect, if such agreement could at all modify or change the material provisions of the mortgage deed. The debts once discharged could not be revived as a mortgage debt secured by that mortgage.

If the mortgagors took and used the money, the proceeds of such sales, after the agent so received the same, in discharge of the (8) mortgage debt, with the assent of the defendant, they became indebted to it on a new account, but such new indebtedness was not embraced by the mortgage. The new debt could not be treated as a "renewal" of the mortgage debt, because that debt had been discharged. The contract embodied in the mortgage deed plainly did not contemplate that the mortgagors should use the proceeds of the sales of the goods as they did do. On the contrary, there was a studied purpose to prevent them from controlling the property or using the money. It was expressly and carefully provided that the defendant's agent should have its possession of the property — that he should sell it and receive the money for the purpose of paying the notes, and no other.

This case is much like Mingus v. Wright, 3 Dev., 78, in which this Court said: "Upon the second point, the defendant offered to show that the principal debtor in the two notes had placed property in the hands of the plaintiff as trustee to sell and raise money and pay the two notes, and furthermore, that he had sold the property and raised from the sales money sufficient to discharge them. We are unable to see upon what grounds this evidence could be legally rejected. The plaintiff being the holder of the notes, and at the same time trustee to sell property placed in his hands expressly to discharge the notes, it does seem to us that when he did sell and receive the money, it was immediately a payment of the notes."Strayhorn v. Webb, 2 Jones, 199; Williams v. Whiting, 92 N.C. 683.

The counsel for the appellee cited Conkling v. Shelly, 28 N.Y. 360, which is much and strongly in point here. In that case, the Court said: "But the Supreme Court reversed the judgment and ordered a new trial in this case, on the ground that the sales made and the proceeds received by the mortgagors, under such an arrangement between (9) them and the mortgagees, should have been applied in payment and satisfaction of the mortgage, whether the money was actually paid over to the mortgagee or not. In this, I think they were right. Such an agreement made the mortgagors agents of the mortgagees. Their possession and their sales were, in effect, those of mortgagees. It was as if the latter had taken possession and placed a third person in charge to sell and account to them. They could not have escaped from crediting on their indebtedness the proceeds of the sales made by such an agent, because he had fraudulently or dishonestly misapplied or employed the money. . . . It is not a question between the mortgagees and mortgagors, who, of course, could not take advantage of their own wrong, and who remain liable to the plaintiffs for the money received and misapplied by them. But the question here is between the mortgagees and the creditors, who have obtained a lien or an interest in the mortgaged property after the satisfaction of the mortgage. The mortgagees have made the mortgagors their agents, and their dealings with the property under the agreement constituting them such must be considered as the acts of agents, and not of mortgagors, and will affect their principals accordingly. The moneys received by them from sales were, in legal effect, received by the mortgagees," etc. Chester v. Stephens, 3 Denio, 33; Braghman v. Done,69 N.Y., 69; Hunt v. Nevers, 15 Pick., 500.

It clearly appears, from the facts found by the Court, that the agent of the defendant sold the mortgage property and received the money therefor, greatly more than sufficient to pay the mortgage debt, and thus, as we have seen, it was, in legal effect, discharged. The defendant must be treated as having received the money, through its agent.

No reason was assigned, on the argument, why the plaintiff may not maintain this action as receiver, without special leave of the Court to sue, nor can we see any. The Court made an order in the proceedings supplementary to the execution, appointing the plaintiff receiver, "to take charge and custody of all property, choses in action and things of value of said defendants, with all the rights, powers and privileges of a receiver under the law." The Code, secs. 494, 497; (10)Coates v. Wilkes, 92 N.C. 376.

While the Court may exercise very great control over the receiver, and may direct, in appropriate cases, that he shall or shall not do particular things, yet, ordinarily, when he is invested with full power as a receiver, he will have authority to bring appropriate necessary actions without special leave or direction of the Court.

Affirmed.