Mowry v. First National Bank

Lyon, J. The object and purpose of this action is to obtain an adjudication that the plaintiff, as assignee of the mortgagor, has an equity of redemption in the property mortgaged and pledged by his assignor, the manufacturing company, to the two banks respectively. Except as to the notes pledged to the Baraboo bank and sold to Briggs, the judgment fully establishes' such equity of redemption in the plaintiff; for it determines that there has been no effectual foreclosure of either mortgage, and adjudges that the defendants must account to the plaintiff for the value, at the time of seizure, of the mortgaged property seized by the two banks, February 7, 1880. The collaterals pledged to the Reedsbnrg bank, which remain uncollected, are still in the possession and under the control of that bank, subject to the final judgment of the [46] court, which will fully protect the rights and interests of the plaintiff therein. The mortgaged property having been sold or used, or its condition so changed that if cannot be restored to the plain :iff on payment of the mortgage debts, the only relief available to him is to have an accounting of, and to be allowed the vane of, the property when the same was taken from him. The judgment fully secures to him that relief. The plaintiff contended on the tidal, and here, that the sale of March 7th, by both banks, to the defendants Nathan and Reuben Fisk and Mrs. Sage, was and was intended to be an absolute sale of the mortgaged property, and not merely a sale .of the mortgages and the mortgagee’s interest in the property; also, that such sale was invalid, because one of the purchasers, Nathan Fish, was the agent of the creditors of the manufacturing company, and could not become a purchaser of tie property in his own right; also, because the agreement of February 6th, between the banks and the creditors, bound the ban ks to another mode of disposing of the property, and because the sale was (as is claimed) secret, clandestine, and for an inadequate consideration, and hence was fraudulent as against the plaintiff, who represents the creditors of the manufacturing company. These propositions were urged in support of the claim that the plaintiff still had, notwithstanding the sale of March 7th, an equity of redemption in the property, and was and is entitled to an accounting for its value at the time it was taken from him. The learned circuit judge, in his findings, negatived all these pi’opositions; yet on other grounds the judgment fully sustains the claim of the plaintiff in support of w’hic.i they were urged. The plaintiff obtains all that he claims, and it seems quite immatei’ial whether the judgment is rested upon the grounds maintained by him, or upon other grounds. The result is the same in either case. If, thei’efore, the court erred in negativing the foregoing propositions, or either of thérn, the [47] error did not prejudice the plaintiff, and is not good canse for disturbing the judgment. These observations dispose of all questions presented by this .appeal save one, which will now be considered. The circuit court adjudged that the sale to Briggs of the collaterals pledged to the Baraboo bank “ was valid and rightfully made, and extinguished the right, title and interest of said plaintiff in and to the collaterals so sold, ” and that in the accounting the proceeds of such sale should be allowed to the plaintiff. The judgment binds the plaintiff absolutely and unconditionally bv that sale, and limits the amount that he can ever realize, under any circumstances, on account of sn-cli collaterals, to the sum paid by Briggs therefor. We think the judgment in this particular is premature and may be erroneous. If it should appear in the accounting that the propei’ty 'mortgaged to the Baraboo bank was, when seized, of a value equal 'to the debt which it was given to secure, the debt was thereby paid, and the -collaterals, pledged to secure the same debt, belonged to the plaintiff and should have been delivered to him. In that case the bank ceased to have any lien upon the collaterals, and had no right or authority whatever to sell them. The learned counsel for the plaintiff very earnestly maintains that the value of such property not included in the mortgage to the Reeds-burg bank is sufficient to pay the whole mortgage debt. But, however that may bé, a provision should not be retained in. the judgment which might prevent the plaintiff from recovering the full value of the collaterals sold to Briggs, in case it shall be found that the mortgage debt was satisfied before the sale of the collaterals. We think the testimony sufficient to support the finding of the court that the manufacturing company authorized a sale of all thé collaterals pledged to the Baraboo bank, iñ case of default in payment of the mortgage debt. If it turns out, therefore, that any portion of the mortgage debt remained un [48] satisfied when such collaterals were sold, that would demonstrate that the sale was properly made. The sale to Briggs seems to have been fairly made, and on dne and sufficient notice. If the manufacturing company was then in default on any portion of the mortgage debt, it would result that the sale was valid and binding upon the plaintiff, and he could only be allowed in the accounting the sum for which the collaterals were sold. In that event the judgment in its present form would be correct. But until the fact that there was no such default is made to appear, the clause of the judgment under consideration endangers the rights of the plaintiff, and should be expunged. We must therefore reverse that part of the judgment, without prejudice, however, to the right of the court, after the accounting, to incorporate it in the final judgment if it shall be found that there was a default upon the mortgage debt or any part of it when the collaterals were sold. It does not seem to be questioned that, in any event, Briggs took a good title to the collaterals purchased by him. We are inclined to think that he did. The plaintiff seems satisfied to pursue his remedy against the defendants, who disposed of the collaterals, and who are, doubtless, abundantly responsible for any judgment that may be recovered against them. It is only necessary to say, in conclusion, that we think the evidence sustains the validity of the sale of March 7th by the banks to the defendants the Fisks and Mrs. Sage, as found by the judge. The Reedsburg bank has no interest in that portion of the judgment which we reverse, and hence the defendants constituting that bank should not be required to pay any of the costs of this appeal. By the Court.- — -That portion of the judgment of the circuit court wKich adjudges that the sale of the collaterals to Briggs “ was valid and rightfully made, and extinguished the right, title and interest of said plaintiff in and to the collaterals so [49] sold,” is reversed, with costs, to be taxed only against the defendants the First National Bank of Baraboo, Nathan and Reuben Fish, and Mary F. Gale Sage; and the cause will be remanded for further proceedings according to law.