Steiner & Bro. v. McCall

BRICKELL, C. J. Mortgages may be made in consideration of securing antecedent debts, debts created presently or cotemporaneously with their execution, future advances, contingent liabilities, or debts the parties contemplate will be contracted in the future. A mortgage to secure an antecedent debt, may not entitle the mortgagee to protection as a bona fide purchaser, while that protection will be afforded when the debt is presently created, and its security by the mortgage is a part of the agreement into which the parties enter. But as between mortgagor and mortgagee, and their privies, a mortgage to secure an antecedent debt, has all the operation and effect, it could have, if made for the security of a cotemporaneous debt. Difficult questions sometimes arise, as to the operation of a mortgage to secure future advances, when the rights of subsequent purchasers, or subsequent incumbrances are involved. None of these questions are now presented, and the sole proposition involved in the instructions requested, is that if the mortgage was executed to secure an antecedent debt, or a debt to be contracted subsequently, it is not valid. The proposition is not sound., If the consideration was a debt to be contracted in the future, and before it was contracted, the appellants had acquired a lien on, or purchased the cotton of the mortgagor, the good faith of the mortgagee in the subsequent transaction would be [409] open to inquiry. But in the absence of all imputation of bad faith, the mortgage would be a valid security. The mere declaration of the mortgagor that he had set apart the cotton for the mortgagee, would not, of course, vest title in the mortgagee ; nor do we understand that the title was claimed, otherwise, than through the mortgage. The ■declaration made to the appellants before they had acquired any claim to, or possession of the cotton, that it had been set apart for the appellee, was material as showing, or tending to show that it was of the property embraced in the mortgage, of which fact the appellants had notice. In no other aspect was it material, or relied on, so far as appears from the record. The charge requested in reference to this declaration, though correct as an abstract proposition, was purely abstract under the facts, and its refusal was not erroneous. Affirmed.