*1 BANK AND STOCKMENS The FARMERS Mexico, CLAYTON, Clayton, New a OF Corporation, Plaintiff-Appel- New Mexico lant, MORROW, James Mor- Sr., Defendants-Appellees. Abup, Clayton, for Krehbiel & appellant. Court of New Mexico.

July 27, 1970. Skinner, Raton, defend- Robert

ants-appellees.

TACKETT, Justice. Dis- was commenced This action Mexico, County, New trict Court of Union promissory notes and to recover on two mortgage. with- After trial to foreclose a in favor jury, judgment was entered out on the two notes “Bank” against the “Jimmy.” judgment denied mortgage. foreclosure on the the foreclosure. appeals from the denial of facts, briefly, as the trial foun February 20, court, are as follows: On $56,326.51. 1962, Jimmy one- He was the owner of an undivided (i/jd) lands. third interest in certain covering interest, one-third which secured the maturity recited indebtedness tmtil five years later. 13, 1962, Jimmy wife and hio

conveyed, by warranty deed, interest their Morrow, Sr., desig- in the land to James “Morrow,” who, did nated the Bank. know period five-year expired, When an Bank and executed renewing mortgage. There- after, this action were two notes in 1962, Jimmy signed by Jimmy. additional Bank, by from the which was secured 264 head of cattle. repaid interest This amount 1962, though never credited on October but rather account *2 obligation (Conclusion 4) was credited to an No. Company, Agricultural Commerce Loan “The defendant James Company.” Here it “Loan is prejudiced by was the failure of the interesting to that Rex note Reeves was plaintiff apply

president Company of the Loan and also by plaintiff’s cattle secured loan to James the Bank. The arid Morrow, Jr., to that loan.” were to the Bank. After III, point alleges it Under Bank’s 1962, 13, the Bank continued to loan that: money Jimmy. additional sums of Any Event, “In Defendant Mor- James points The Bank relies on three re- Preju- Could Not Been Have points II, versal. Under I and diced Mak- the Actions of Plaintiff in challenges the trial findings court’s of ing Application Payments.” of fact Nos. 7 and and of conclusions law transcript has reviewed therefrom, Nos. 6 and flowing entirety in its that the chal and we hold follows: lenged findings fact and conclusions of of (Finding 7)No. than flowing law therefrom have “From time to time after the execu- Thus, support substantial in the evidence. security tion of agreement, said collateral they Mar appeal. will not be disturbed Morrow, Jr., the said James Trujillo, tinez v. 81 N.M. money plaintiff, additional sums of from argument con of Much promissory plain- and executed notes to points the de cerning I and II bears on tiff, thereof, as evidence all as more trial meanor of the witness Reeves. fully appears Defendant’s Exhibit position evalu court is in a much better 1 introduced in evidence in this cause.” are than the demeanor of witnesses ate (Conclusions 6) Nos. and normally we, disturb and we will not are ruled evaluation. I and II

“The Points of additional loans against the Bank. Jr., by plaintiff, after James it conveyance mentioned, is ruled Point above Morrow, Sr., defendant James court con against as the trial security validated the agree- collateral so, cluded, correctly and that Morrow ment as to the said defendant James part of prejudiced by the failure on the Morrow, Sr. against apply payments the Bank to “The making loan, agree- extension have satis the Bank’s which would plaintiff ment between the and one- fied the Bank’s James Morrow, Jr., finding By invalid to extend the third interest in the land. lien of the collateral agreement that the Bank No. the trial court found made, to loans thereafter of had actual and constructive warranty deed, prior extension Sr.” to the James and agreement entered into between (Finding 17) No. The, challenged Bank. has not “On October the said appeal. find on this Those Morrow, Jr., paid plaintiff ings accepted challenged of fact not applied upon to be this court and con and are deemed true owing indebtedness from him to the trolling. Trinidad Bank v. Industrial plaintiff; failed Romero, to credit such sum to the account of the said The court further concluded that the conveyance col- became of deed of aware lateral agreement money mentioned in continued to Finding No. and the Jimmy. land described Morrow was therein.” junior lien holder as to the lien of certainly- any finding that and he was no loans were made

mortgage on the time of the extension by the failure of the Bank or way afterward, as to proceeds in such a or the two apply notes here sued loan, prior the basis were not for loans satisfy which was made the Bank’s City agreement. Thus, mortgage. Heller Gate no there are support Loan Conclusions 5 and 6. Building and *3 Conly In- (1965); v. 408 P.2d 753 agree I there was substantial evi- Co., 28, 29 A.2d Trust 27 Del.Ch. dustrial support Finding $31,- dence to 17. The Mortgages 396c (1943); 601 59 C.J.S. 395.30 was the received from sale of cattle p. 559; at Annot. 76 A.L.R. pledged the Bank for its The loan. down payment already af- The of the trial court is received on this sale had paid applied firmed. been to the Bank and on the Bank’s account with It is ordered. so who testified that the proceeds balance of the COMPTON, of the sale he mail- J.,C. concurs. deposit ed Mr. Reeves at the Bank “a pay- on the cattle. The balance on WATSON, J., specially. concurring I ment.” believe this is sufficient for payment find that made on WATSON, special- (concurring Justice As Schreiber indebtedness. ly)- Armstrong, 70 374 297 v. N.M. P.2d following those I add the facts to would theory appellant’s of later ratifica- (1962), opinion: recited misapplication pre- tion of the was not in- the one-third by requested served for our review (actually in the terest lands and conclusions. in- agreement) provided that the secured appellee agree I might decreased debtedness be increased or by credit give failure from time to time. loan his which payment for this by parties part all of this was deemed Appellant pledged. contends land was then “open-end” agreement even loan was that the bank Point III under its though separate application actually reduced the cattle had been executed. cattle later sale of proceeds of a No contention was ever made if the company than pledged the loan deed, that, parties acquired after he had been pledged assets proceeds of of James” debts. respective applied to the strictly materially Bank differed payment, $31,395.30 be, may but This intervening lien holder in Heller v. Gate Bank, im- having made to been once City Building & Loan benefit of mediately accrued to said: we 753 There not be with- and could junior lien holder “ * * * mortgagee first McElmur re [A] detriment. to his drawn advances, optional future 1942); which Wil F.Supp. (E.D. S.C. ray, mortgage, obligatory under the first Company, 225 Ark. Mill Morse son v. intervening with actual National First (1955); 282 S.W.2d lien, Honeyman, subse- priority cannot obtain Haven of Grand intervening quent Appellant advances over 42 N.W. Dak. crediting (Emphasis added.) lien.” question the did not de- 408 P.2d at 755. Bank of debtedness which cattle sale of rived from only the trial court an indebtedness security on given as knowledge of the the Bank’s actual therefore, this credit company; the loan “prior deed was that it had such proper as another considered only be can agreement.” There was to the extension QgJ payment to the Bank. The credits of these

payments being discharge sufficient

lien as to James

Sr.’s, I concur in the affirmance on ground

this alone. Wollen, L. Pickering, Leonard Julius garnishee-appellant. Modrall, Seymour, Sperling, Roehl & 472 P.2d 646 Harris, Allen, Frank H. Peter J. *4 Virginia MAYFIELD, Broullire Plaintiff-Appellee, B. appellee. SOUTHWEST, INC., SPARTON Garnishee-Appellant. WATSON, Justice. Court New Mexico. Appellee, having judgment obtained a July against defendant 1970. Garcia in the G. Juan served a garnish- writ of

ment on appellant interrogatories at- tached. The return shows that these papers Bernard, were delivered to “R. Mgr., Sparton Southwest, April Inc.” on a deputy sheriff. Bernard, 22, 1969, Mr.

On Manager” appellant, “Personnel sent district letter to the clerk of the unsworn referring docket court the cause briefly answering interroga- number copy also sent of this letter was tories. attorney appellee. for the At to the clerk same he sent a check $9.42, although the clerk’s 5,May this sum is dated May judgment a default against appellant-garnishee entered $4,077.90, pursuant sum 26-2- 18, N.M.S.A., Comp, (since repealed). judgment This statute authorized the garnishee for the full amount of the judgment against the defendant “should garnishee fail make answer interrogatories.” Appellee writ and the pointed out to the trial her ex parte motion for default answered, had not been nor writ interrogatories been answered under required oath 21-1-1(33), Rule 33 [§ N.M.S.A., 1953 Comp.].