Chester v. Wheelwright

Hinman, J. The first objection of the defendant’s counsel to a decree in favour of the plaintiff in this case, amounts to this : that, as the spirit of our recording system requires that the record of a mortgage should disclose, with as much certainty as the nature of the case will admit of, the real state of the incumbrance, it is wholly inadmissible to allow this plaintiff to take a mortgage to secure 3000 dollars of his debt of 10,426 dollars, 14 cents, and hold it as a valid security on the property, till his whole debt is paid. This objection, however, seems not to have been much relied on. It certainly cannot be claimed, successfully, that the mortgage was void for uncertainty, in not defining, with sufficient particularity, the debt, or the portion of the debt, intended to be secured by it. The objector afterwards impliedly admits the original legality and validity of the security, and attempts to show, that it does not remain a lien upon the property, on the ground that the debt has been paid. Assuming, then, that this mortgage was originally a valid security, in the hands of the plaintiff, for the payment of the 3000 dollars intended to be secured by it; it is very obvious, that the only question there can be, in the case, is, whether the condition of the mortgage deed has been complied with; in other words, has the plaintiff been paid his 3000 dollars? And this depends upon, and resolves itself into, a question, as [567] to the application of the payments, which the case finds to have been made to the plaintiff, since the mortgage was given. If these payments are to be applied on the particular portion of the debt secured by this mortgage, then the debt is paid — the condition of the deed is performed — and instead of a decree in favour of the plaintiff, he ought himself to release his mortgage title to the owners of the equity of redemption. On the other band, if the payments are all to be applied to that portion of the debt, not secured by this mortgage, then no part of the 3000 dollars, to secure which the mortgage was given, has been paid ; and the plaintiff is entitled to a decree for the whole of it. And 1. in relation to the application of the payments made, previous to the levy of the execution on the equity of redemption. Whatever doubt there may have been, or may now be, as to the application of indefinite payments, where no application is made by either party, whether the supposed interests of the party paying, or the party receiving are to be preferred, it has, at no time, been doubted, that the application must be made according to the justice of the case. Seymour & al. v. Van Slyck & al. 8 Wend. 403. The United States v. Kirkpatrick & al. 9 Wheat. 720. If both omit to make the application, the law, says Judge Story, “ will apply the payments according to its own notions of justice.” Indeed, the proposition, that an unjust application of them cannot be tolerated or allowed, is obviously self-evident, as a maxim in morals, as well as of law. Rut, by looking at the levy of the defendants’ execution, and the appraisers’ certificate appended thereto, it will be seen, that this equity of redemption was taken, appraised, and set off to the executors of Mr. Bristol, subject to this mortgage debt, as amounting to 3000 dollars. If, therefore, the application claimed by them, is made of these payments, then the executors obtain the property, discharged, so far as these payments go, of the plaintiff’s lien, and still have their judgment against Wheelwright in full force. Without, therefore, resorting to the doctrine claimed by the plaintiff's counsel, that they are estopped from disputing the validity of this mortgage, as a valid security, at the time of their levy, by the recital of it in the appraisal and setting off of the equity of redemption ; or even to the doctrine, that [568] courís will apply payments to the debt which has the most precarious or inferior security — a principle sanctioned by the highest authority, in many cases — (Peters v. Anderson, 5 Taun. 590.) it. is sufficient in this case, to say, that, in our opinion, it would be most manifestly unjust and inequitable to make such an application of the payments made previous to the levy of the defendants’ execution, as is contended for by them. 2. As to the payments made since the levy of the defendants’ execution. In relation to these, also, it does not appear to us at all, necessary to enter upon the discussion of any doubtful principle, in order to show what application the law might make of these payments, had there been nothing in the situation or conduct of the parties from which to infer their intention upon the subject. The parties had the right, either at the time of providing the fund, or at the time when the money was realized from it, to apply the avails as they pleased ; and if they have made the application, our duty is at an end, when we have carried into effect the objects directed and intended by them. But the case finds, that these payments have all been realized and made, from the avails of certain securities, placed by Wheelwright in the hands of W. W. Chester Co., for the security and eventual payment of his general indebtedness to them. These securities were a deed of 640 acres of land in Illinois ; a claim on Folsom <§• McCulloch of St. Domingo ; a claim on the Bowerij Church, New-York ; and part of a wharf in Alexandria. Now, suppose the five securities, including the mortgage in suit, had each been of equal value, and should produce, each, one fifth part of the whole debt: would any body contend, that the realizing the avails of any one of these securities, affected any of the other securities 1 If this could be so, then the payment of one fifth part of the whole debt would discharge the plaintiff’s lien on all the securities intended for it. And the increased number of his securities, if any one should prove available, would be entirely useless to him. The statement of such a proposition would seem to be sufficient, to show that such could not have been the intention of the parties. We arc bound to give such a construction to their contract, when that is to be inferred from their conduct and situation, [569] as, under all the circumstances, is the most reasonable, natural and probable. And, in doing this, we can entertain no doubt that the parties contemplated, when each security was given, that it was to apply to a separate and distinct portion of the general debt; the New-Ilmen mortgage to one portion of it; the land in Illinois to another; and so of the other securities, as they were, from time to time, given. We are of opinion, therefore, that the plaintiff is entitled to a decree in his favour, for the whole amount of his debt of S000 dollars ; and so advise the superior court. In this opinion the other Judges concurred. Decree for plaintiff.