Whiting v. Eichelberger

Wright, Ch. J. In the foregoing very full and lengthy statement, we have the substantial facts out of which this controversy arises. It will be seen that the case is inti [427] mately connected with the one immediately preceding. Like that, it is voluminous in its record and facts, and yet presents no question of much doubt or difficulty. I. It is claimed that the contract between Eichelberger and Brazleton, of October 12, 1857, and assigned to plaintiff, was not intended to give, and did not have the effect of giving a lien on the sold furniture for the payment of the purchase-money and rents. It is worthy of remark that this position seems to be taken for the first time in this court, for throughout the entire transactions between the parties and in the pleadings of the very party now making this objection, this instrument is spoken of as a mortgage. Indeed nothing can be clearer than that all the parties have regarded it as indisputable, as a matter about which there was no room for controversy, that Brazleton, under this agreement, had a lien upon the entire furniture of the house thus sold, to secure the payment of the lessee’s indebtedness. Eiehelberger admite this. W. P. Brazleton, in his testimony, so treats it. The appellant, in his answer, gives it this character, and places his defense and his right to the property upon other and distinct grounds. And while it is time that these matters are not to be taken as conclusive in the construction of the instrument, they serve to assist in arriving at the purpose and intention of the parties in making their contract. It may be conceded that the agreement is not a mortgage in form. Nor is it necessary that it should be in order to preserve the lien of the vendor or his assignee. As in case of a mortgage, no particular form or words are necessary, in order to give it that character; so, when the party claims a lien, without having a technical mortgage, a court of equity will recognize and sustain it, whenever, from the agreement or contract, it appears that it was so intended. “Indeed there is generally no difficulty in equity in establishing a lien, not only on real estate, but on personal [428] property, or on money in the hands of third persons, whenever that is matter of agreement, at least against the party himself and third persons, who are volunteers, or have notice of it; for it is a general principle in equity, that as against the party himself and any claiming under him voluntarily or with notice, such an agreement raises a trust.” 2 Story Eq. Jur., 1231; Legard v. Hodges, 1 Ves., Jr., 478 ; Drosky v. Vosley, 12 A. & E., 632. In this case appellant had full notice of the agreement. It was on record; had been assigned to plaintiff; and his contract of purchase from "W. P. Brazleton expressly refers to it. The thought that this contract was only an agreement to make a mortgage or give a lien, by some subsequent writing, is not tenable. Nor is there any more force in the suggestion that there could be no lien, because the amount or value of the property was to be ascertained or fixed by a subsequent or future act of the parties. The language of the agreement is that the lessor “ is to have a lien ” for the faithful performance of the lessee’s obligation, and especially for the balance remaining unpaid on the furniture and rent. There was no condition as to such security. The sale was made, the property delivered, the terms were agreed upon, and it only remained to ascertain the value, by having the property appraised by two (or three) persons selected in the manner specified in the writing. The doctrine for which appellant contends has reference to cases of constructive delivery of personal property, and not to transactions like that now before us. Not only so, but at all events, when the property was appraised and the notes executed, the contract was complete, and this was long before the assignment to plaintiff. Then, again, it must not be forgotten that this agreement was between lessor and lessee, and that, without any stipulation to that effect, the landlord would, by the express language of the statute, have a lien for the rent upon the personal property of [429] the tenant, used on the premises during the time, and not exempt from execution, and there is no necessity, for it is impossible, to ascertain and settle in advance the specific property upon which such lien is to rest. This agreement, so far as it relates to the rent reserved, was but that which the law had already made, and in terms extended the same lien over this property to the vendor and landlord, for the purchase-money. II. At the time this suit was commenced but part of the notes were due. Plaintiff so framed his bill as to seek a recovery for all that might mature before the final decree. This obviated the necessity of an amendment or supplemental pleading, setting up the necessary matter and asking the same relief; and especially is this true under the very full and specific relief asked for in the bill, when no objection was made thereto by demurrer, or otherwise, in the court below. m. But appellant maintains that under the clause in the agreement, between Brazleton and Whiting, of April 10, 1858, Brazleton has paid the debts of the firm, of a sufficient amount to redeem this mortgage; and this, we may say, is, in substance, the sole ground of defense relied upon in the answer; and yet, in maintaining it, it seems to us that he most signally fails. The Court found that there was due on the notes, less the payments, $6,900.79, but that Brazleton had paid, with interest thereon, $3,513.40, leaving a balance of $3,387.39 still due plaintiff. If this is not correct, it was certainly the duty of the defendant to show its error by proof; and this evidence we are unable to find. It is assumed that whatever may have been paid by W. P. Brazleton, in liquidation of the firm debts, was to be applied necessarily to the redemption of this mortgage We do not so understand the agreement. He had the privilege of thus applying such payments, but was not [430] bound to do so. Other matters of indebtedness existed between the parties. If Brazleton paid the firm debts and consented to the application of such payments to any of his other indebtedness, he cannot afterwards claim that it should go to the extinguishment of this lien. Nor will the purchaser of the property stand in any better position. The general rule is, that the debtor may direct the application. If he fails to do so, then the creditor may make it. If both fail, then the law applies it according to its own notions of justice. In this case, under the testimony, the court below certainly allowed all the payments to which the party was entitled. If any other firm debts were paid,, it was agreed and arranged that they should be applied in another way, or upon other debts; and it is too late now to change the application. Not only so, but it is not pretended that Eichelberger has paid these notes, and under the terms of the assignment and the power conferred upon the plaintiff by the agreement in relation to the dissolution and the settlement of the affairs of the firm, this property is pledged for his security, and he could properly proceed to subject it to the payment of so much of this debt as remained unredeemed in his own name. This right could not be defeated by the sale to defendant. There is nothing to show that the lease had “ terminated by the mutual consent of the partiesand this aspect of the case, therefore, we need not notice. The decree is Affirmed.