Bank of Utica v. Finch

The Chancellor. The appellants; having purchased the equity of redemption from the assignees after the" bill had- been taken as-confessed1 against the1 latter, would;have been precluded-from. setting up any defence which was inconsistent with the admission thus-made, by their- grantors, of the" facts charged in the bill, had not" the complainants, by amending their bill, waived their order taking tlie bill as confessed against the assignees of Finch., But up on; the merits" of the case, thedecision of the vice chancellor was technically correct; Where a .bond and mortgage are actually given to secure a particular, debt mentioned therein,, the mortgagee cannot, as against subsequent purchasers or incumbrancers, hold: it as a lien for an entirely distinct and different debt, upon paroi" proof that, it was intended to cover: that debt" also:■ But" where-the portgage is given.to" secure a particular debt, with a condition to-be void; upon the payment of. that debt, the mortgagee" dbes not" losehissecurity. by- the mere extension of the" time of payment,. although, that extension* is in the form of a1 renewal- of the’note which isl held as a. collateral security for the payment of; the same-debt; where- it was not the intention of either party to-discharge the- mortgage" security. (Heard v. Evans & Isham, 1. Freem. Ch. Rep. Miss. 79.) And in this case there [303] was no defeasance of the conveyance, upon the payment of any particular debt, which could technically operate as a discharge of the mortgage lien by a change of the collateral security referred to in the mortgage. There was in fact no such sum as $30,000 for money paid, as was mentioned in the mortgage. The mortgage, it is true, was given for the nominal sum of $30,000, but in fact to secure the floating balances, or amount of the notes and bills, which the bank might hold from time to time against the mortgagor. There are numerous cases in our own courts showing that a mortgage, or a judgment, may be given to secure future advances ; or as a general security for balances which may be due, from time to time, from the mortgagor or judgment debtor. And this security may be taken in the form of a. mortgage or judgment for a specific sum of money, sufficiently large to cover the amount of the floating debt intended- to be secured thereby. The same principle was recognized and acted upon by the supreme court of the United States in the case of Shirras and others v. Cray & Mitchell, (7 Cranch, 50,) cited by tire respondent’s counsel on the argument. Here there was not in fact any debt of $30,000, for moneys advanced to Finch and wife, which was due and payable as mentioned in the mortgage. There is a large sum due, however, for notes and securities which were then running to the bank, and for other securities subsequently given; all of which securities, or so much as should become due and be payable thereon at the final close of the business of renewing and discounting notes and securities, or advancing moneys by the bank, not exceeding the $30,000, were intended to be secured by this mortgage. The decree appealed from, therefore, was not erroneous, and it must be affirmed with costs. And as the appeal has prevented the respondents from obtaining the master's report, and the final decree, for a long time, during which time the appellants have been entitled to the possession of the mortgaged premises, and to the enjoyment of the rents and profits thereof, if, upon the foreclosure and sale of the premises under the decree -which may be entered in this suit, it should turn out that the proceeds [304] of the mortgaged premises are insufficient to pay the amount due to the complainants, with interest and costs, the appellants must pay to the respondents the rents and profits of the mortgaged premises during the time for which the proceedings have been stayed by this appeal, or so much of such rents and profits as may be necessary to pay such deficiency; as the damages of the respondents for the delay and vexation which they have sustained by this appeal. And a reference is to be hereafter directed to ascertain the amount of such rents and profits, if it shall be'necessary to do so to carry this part of the decree of affirmance into effect. The master designated in the decree to compute the amount due upon the mortgage, having died since the decree, it may be referred to any other master to ascertain and report the amount. In case the reference shall not have been executed before the first of July next, the complainants are to be at liberty to apply to any justice of the supreme court, either at chambers or at a special term, to designate a referee to execute the reference.