Beardsley v. Tuttle

By the Court, Conn, J. Upon considering the whole testimony in this case, we fully concur with the circuit court in [79] regard to what facts are established by it, and, as a necessary consequence, in the conclusion that the mortgage mentioned in the complaint is paid and satisfied, and should be discharged of record. To our minds, it is very clear that this mortgage was given solely for the purpose of securing the payment of the note made and delivered by Van Valkenburg & Co. to Tuttle, G-reen & Co., at the time the contract of December 1, 1855, was made and entered into by the parties. That note was fully paid and satisfied, by delivery oí shingles to the appellants, in the city of Chicago, during the spring and summer of 1856, by Van Valkenburgh & Co., under and in part performance of the contract first referred to. This note having been paid, the purpose for which the mortgage was given is accomplished ; and the appellants have no right to hold the mortgage as a security for any damages which they may have sustained by reason of the failure of Van Valkenburg & Co. to keep and perform the agreement of December 1, 1855, or as security for any advances afterwards made to Van Valkenburg & Co., or for anything that might be found due the appellants on final settlement with that firm. This is clear, from the most obvious principles of equity and justice. The case is simply that of a partner giving a mortgage upon his own individual property, to secure the payment of a certain partnership note. It appears that the appellants and Van Valkenburg & Co. had extensive lumber dealings with each other, in the year 1856. In December, 1855, the parties entered into the written contract mentioned in the pleadings and evidence in the case, by which Van Valkenburgh & Co. agreed to sell and deliver to the appellants, at Chicago, in certain quantities, from the month of March following to the month of November, twenty millions of shingles, of good quality, &c., for which the appellants were to pay the market rates at the time of delivery. And the appellants also agreed to advance upon the contract [80] the sum of $5,665, which was to draw interest, at the rate of ten per cent, until the delivery of shingles to the amount of the said advance. Van Valkenburgh & Co. gave their firm note, bearing even date with the contract, payable to the appellants, five months from date, at the rate of ten per cent, interest, for this amount; and it is to secure the payment of this firm note that the respondents gave their mortgage. According to our understanding of the testimony, it clearly and satisfactorily appears that this firm note has been fully paid, and, as a matter of course, the respondents are entitled to have the mortgage discharged of record. The appellants, however, contend that there was some alteration of this contract, subsequent to its date, and a new agreement made between them and a member of the firm of Van Valkenburgh & Co., by which new agreement they were to make, and did in fact make additional advances over and above the sum of $5,665, and that it was mutually agreed and understood that the note for $5,665, and the mortgages given as collateral security for the same, were to stand as security for any balance which might be found due them on final settlement; or that the $5,665 note and mortgage were to remain as security for the sum first advanced, and that the shingles delivered by Van Valkenburgh & Co., under the written contract, were to be first applied to the payment of moneys advanced by the appellants subsequent to the first advance. If we were to assume that the testimony in the case established the fact, that such new agreement was made between the appellants and some one of the firm of Van Valkenburgh & Co., (and we do not think that the evidence shows any such thing,) still we do not see what right a partner would have to bind his co-partner by this new agreement. What right would one of the partners have to say that a mortgage given by another partner upon his own property, for a certain specific object, and to secure a certain indebtedness, should stand as [81] security for some other partnership liability ? Clearly, none whatever. But we do'not think that the testimony shows that any such new agreement or arrangement was ever made. The appellants differ among themselves as to the terms of this agreement, and the evidence upon this point is entirely unsatisfactory to our minds. And without dwelling longer upon the facts of the case, we will only add, that we think the judgment of the circuit court correct, and must be affirmed. Judgment affirmed.