136 A. 556 | Conn. | 1927
The plaintiff in this action is seeking the foreclosure of two mortgages upon a certain farm, executed and delivered to it by the defendant Champigny; the first was made January 18th, 1921, and secured an indebtedness of Champigny to the plaintiff amounting to $4,000 with interest, and no question is made as to the right of the plaintiff to foreclose this mortgage or as to the amount due upon it. The other mortgage was made June 30th, 1922, and stated the amount of the debt secured to be $2,500 with interest. The trial court found that the entire amount of this debt was due and unpaid and decreed a foreclosure. The issues before us concern the correctness of the decision in regard to the foreclosure of this mortgage, the appellants being the trustee of Champigny's bankrupt estate and the Mapes Formula and Peruvian Guano Company, which holds a mortgage upon the real estate subsequent to those of the plaintiff.
On June 30th, 1922, Champigny was indebted to the *618
plaintiff in the sum of $2,565, and the mortgage in question was given to secure that indebtedness to the amount of $2,500. It did not directly secure the debt then owed the plaintiff by Champigny but became collateral to it; First National Bank v. National GrainCorporation,
The finding states that at the time of trial Champigny was indebted to the plaintiff on three notes which it describes. One of these was a note made by one Thrall, payable to Champigny, and by him indorsed to the plaintiff. This note was found by the trial court to be the successor by various renewals of a note which was made by Thrall payable to Champigny and indorsed by him to the plaintiff, which was in effect when the mortgage was given, and the amount due upon which, $1,065, formed a part of the sum of $2,565 then owing to the plaintiff. The appellant contends that the description of the debt in the mortgage in suit is not adequate to include the liability of Champigny as indorser of this note. This contention overlooks the nature of the mortgage before us; it directly secured the debt evidenced by the note for $2,500 described in it, and only indirectly and collaterally the underlying and pre-existing indebtedness of Champigny to the plaintiff; so long as that indebtedness, at the time the mortgage was given, equaled or exceeded *619
the amount of the note, it is of no concern to the appellant or subsequent incumbrancers how that indebtedness was made up. First National Bank v.National Grain Corporation,
Of the other two notes representing indebtedness of Champigny to the plaintiff at the time of the trial, one was dated February 16th, 1925, and was for the sum of $4,326.83, with interest, and the other was dated January 2d 1925, and was for the sum of $140, with interest. The trial court has not found whether the debt evidenced by these two notes represented, in whole or part, the debt originally secured by the mortgage, nor can we determine that from the record. Both notes are dated long after the time the mortgage was given and one of them is for an amount largely in excess of the note secured by it and of the then existing indebtedness of Champigny to the plaintiff. Still, a full hearing might disclose that the note for $140 represented a part of the original debt, or that that debt or a part thereof can be traced into the note for $4,326.83, as a still existing indebtedness, so that the plaintiff would be entitled to foreclose the mortgage to enforce payment of it. Greist v. Gowdy,
This suggests the consideration of certain further *620 contentions made by the appellant. During the years 1922, 1923 and 1924, Champigny raised crops of tobacco upon the farm covered by the mortgages in suit, and during these years had an agreement with the Connecticut Valley Tobacco Association for the delivery of his crops of tobacco to it and the handling and marketing of them by it. In 1922, in addition to the mortgage held by it upon the farm, Champigny executed and delivered to the plaintiff a mortgage upon the crop of tobacco raised by him that year and then hanging in a shed; in September, 1923, he executed and delivered to the plaintiff a similar mortgage upon the crop raised by him that year, and he thereafter executed and delivered second and third mortgages upon that crop to Charles E. Fowler and the appellant the Mapes Company, respectively; in 1924, he executed and delivered to the plaintiff a similar mortgages upon the crop raised by him that year, and thereafter executed and delivered second and third mortgages upon that crop to the Mapes Company and to Terry J. Chapin as trustee for two creditors. The finding states that in each of these years, when it came time to deliver the tobacco to the Tobacco Association, in order to allow it to take delivery, handle and sell the crop, Champigny executed and delivered to each mortgagee, in substitution for its mortgage, an order drawn upon the Association, requesting it to pay to that mortgagee any moneys, up to the amount stated in the order, due or to become due to him on account of the crop of tobacco raised that year. The plaintiff received considerable sums of money at various times on account of the orders so held by it. The appellant claims that, as each payment was made by the Association to the plaintiff, it ought to have been credited upon the indebtedness owed the plaintiff by Champigny at the time when he made the mortgage upon *621 the crop from the proceeds of which the payment was made, and that, had such a course been pursued, it would have resulted in the payment, in whole or in part, of the indebtedness secured by the mortgage in suit.
The facts found, which were presented to the trial court in the form of an agreed statement, do not permit an adequate consideration of this contention, and all that can be done is to make certain suggestions which are likely to prove helpful on a retrial. The first of these is that the application of the payments made to the plaintiff upon the orders would be of no consequence in this action unless it is made to appear that the indebtedness to secure which the mortgage in suit was given can be traced into the indebtedness on account of which the orders were given. The finding states the amount of the indebtedness owed to the plaintiff by Champigny when each of the mortgages was given and, in each instance, that his liability upon the Thrall note formed a part of that indebtedness, without, however, stating the amount of that liability. This falls far short of laying the necessary basis for the appellant's contention.
Again, the finding fairly suggests, although it does not expressly state, that each of the crop mortgages given to the plaintiff was of the same nature as the mortgage upon the real estate we have discussed above, that is, it was given as collateral security for a preexisting indebtedness, with the result that the satisfaction of that indebtedness would discharge the mortgage; but the finding does not state the circumstances surrounding the substitution of the orders for these mortgages; what, for instance, was the agreement between the plaintiff and Champigny, what the understanding, if any, among all those holding crop mortgages, what knowledge, if any, the plaintiff *622
had of the crop mortgages subsequent to its own, and like facts; yet these might have a very important bearing upon the equities between the parties. The appellants contend that the lien on each of the crop mortgages was not terminated but merely transferred to the proceeds of the order given in substitution for it; in a strict sense that could hardly be, in view of the fact that the sole means of enforcing such a mortgage is by sale of the mortgaged property under order of court; General Statutes, § 5206; but, no doubt, there might be such a general agreement among the parties interested as would have the effect of impressing a lien upon the proceeds of the order.Ketcham v. St. Louis,
Again, the finding suggests, though it does not state, that each of the orders given to the plaintiff was itself collateral security, either, in strict substitution for the crop mortgage it succeeded, for the indebtedness existing when it was given, or for that existing when the order was delivered to the plaintiff. See Robinson
v. Security Trust Co.,
The appellants strongly press upon us certain doctrines as to the application of payments made to a creditor without express instructions as to their disposition. It might well be that Champigny intended that the proceeds of each of the orders should be applied to discharge the debt secured by it, and that the circumstances were such that the plaintiff ought reasonably to have understood that intent; if that were so, the plaintiff was, in the first instance, under an obligation to make such an application; Dulles v. DeForest,
Before further proceedings are had, the appellants should file pleadings proper to present the issues they desire to raise.
There is error, the judgment is set aside and a new trial is ordered.
In this opinion the other judges concurred.