Gardner v. Diederichs

Mr. Justice Lawrence delivered the opinion of the Court: The notes to Diederichs and those to Gardner were secured by the same deed of trust, those to Diederichs falling due in twelve and eighteen months, those to Gardner in twenty-four and thirty months. But the interest on all the notes was payable annually. It has already been decided by this court, that, where several notes are secured by a mortgage, in the absence of any special provision to the contrary, the notes are entitled to payment from the proceeds of the mortgage in the order of their maturity. Vansant v. Allmon, 23 Ill. 35. In that case, the note in controversy had been assigned, but the decision was not placed on any special equity acquired by the assignee. It rests upon the fact that the holder of the note first maturing may foreclose upon non-payment without waiting for the succeeding notes to mature. Sargent v. Howe, 21 Ill. 148. The power to do this implies a priority of lien in the notes first falling due. This deed of trust does not provide, that, in the event of sale, all the notes shall be deemed to be due. It simply authorizes the trustee, in case of default, to sell, and out of the proceeds pay the amount due. The counsel for plaintiff in error urges, that, unless, all the notes could be considered as due in case of sale, then the holder of the notes not due would lose the benefit of the security, even if there should be a surplus fund, as the trustee is directed to render the surplus to the grantor. Whether a court of chancery would relieve against this hardship by staying the payment of the surplus fund, till security could be given that it would be held subject to the lien, it is not now necessary to inquire. For the purposes of the present case it is sufficient to say that the trustee would not, under this deed of trust, have the right to apply the surplus on debts not due, nor would a court of chancery compel him to do so. Courts do not make contracts for parties, nor require them to pay their debts before they have agreed to pay them. The prudent method in taking securities of this kind is to provide against all these contingencies by the express provisions of the deed. There is, however, according to the principles here laid down, an error in the decree. The interest on the Gardner notes was payable annually, and fell due at the same time with the first note to Diederichs. The decree should have directed this interest for the first year, amounting to $330, and the amount of the first Diederichs’ note to be paid pro rata, and next the second Diederichs’ note, which matured in eighteen months, and thirdly the Gardner notes. Gardner has been in possession of the mill, and made valuable improvements thereon since the execution of the deed of trust; and as the deed of trust covered only an undivided half of the mill, while he was himself the owner in fee of the other half, he claims to have made these improvements as tenant in common, and to have a lien on the entire premises for the amount expended, which should take precedence of the deed of trust. One tenant in common can make another, at common law, contribute to such repairs to a house or mill, as are necessary to its preservation or use. 4 Kent, 370. Beyond that the right to compel contribution has not ordinarily been carried; but the case before us falls within the principle of Louvalle v. Menard, 1 Gilm. 45. There the estate held in common had been sold under a proceeding in partition, and before the distribution of the money, the complainants filed their bill, alleging the erection, by their ancestor, of valuable improvements upon the land, in consequence of which it brought an enhanced price, and praying, that, in the distribution of the fund, they should be allowed for these improvements, so far as they had increased the sum brought by the property at the sale. The court held this was equitable, and remanded the case in order that proof might be taken upon this point. So in the case before us, although Gardner might not be able to maintain a bill for contribution against Diederichs for more than the repairs necessary to preserve the property, yet as the estate of Hymer & Co. is to be sold, it is but equitable, that, so far as the price which it brings at the sale shall be enhanced by the improvements for which Gardner has paid, he should be refunded. He should also be allowed for taxes, and as against these sums, should be charged reasonable rents and profits upon one-half the mill, independently of his improvements. These can be ascertained by determining, first, the value of the mill after completion, and what would have been a reasonable rent for it, and, secondly, the value at the time the mortgage was made, and fixing the rent in proportion to the value at the date of the mortgage and after completion. Before these inquiries are made, however, the estate of Hymer & Co. in the mill should be sold according to the provisions of the deed of trust, and the money brought into court. The price it shall bring will serve as a basis for these inquiries. What it would have brought, independently of the improvements made by Gardner, cannot, of course, be ascertained with exactness, but the court will be able to render a decree that will do substantial justice to all parties. The amount found due for improvements will be first paid, and then the notes in the order above directed. The cause is remanded for further proceedings. Decree reversed.