McDonald v. Hulse

Rxland, Judge, delivered the opinion of the court. — 504 — Iii this case, the following facts are found by the record. McDonald, in August, 1847, filed a bill in the Platte Circuit Court against Hulse, Burnes and Thornburg, to the following effect: Burnes being indebted to McDonald, by his bond of 2d February, 1841, payable at ten months, for $500, with six per cent, interest from date, did, by his deed of 4th October, 1842, convey two slaves to Thornburg, in trust to secure the payment of the debt, with authority to sell the property if the debt remained unpaid on 1st May, 1843. Afterwards, on 2d June, 1845, the plaintiff, one of the slaves having died, for the purpose of better settling his debt, and without any intention of abandoning his lien on the surviving slave, took a new bond from Burnes, with one Light as security,' of the 2d June, 1845, payable one day after date, for the principal and interest then due ($686) with ten per cent, interest from date, and discharged the old bond, in lieu of which the new bond was given. The bill did not exhibit the new bond nor any copy, but exhibited a copy of the deed of trust, alleging the loss of the original. Afterwards, on 8th of April, 1845, Hulse purchased the slave embraced in the deed of trust from the original owner, Burnes, and has had possession since, claiming adversely to the trust deed. The prayer of the bill is to subject the slave in the hands of Hulse to the payment of the balance due plaintiff on the last bond. The bill was taken for confessed against Burnes and Thorn-burg, after an order of publication against them as non-residents. The answer of Hulse, who appeared and contested the plaintiff’s case, insists that the new bond was received in payment of the debt secured by the deed of trust; that the plaintiff surrendered the old bond, and destroyed the deed of trust, and insists that he is a purchaser from Burnes and ought to be protected. A replication was filed, and upon the hearing before the court, the plaintiff called two witnesses, who testified that — 505 — Burnes asked them, respectively, whether taking personal security for the debt would discharge the deed of trust; to which they replied, that it would not; but these gentlemen could not say whether this was before or after the taking of the new bond. This was the whole case on the part of the plaintiff, except the exhibits to his bill. The defendant, on his part, (among other evidence) produced the two bonds, and proved that they were found among the papers of Burnes in Kentucky, after he himself had removed to Oregon. One of his witnesses (Downey) testified that he had a conversation with the plaintiff, when he was on his way to see Burnes in relation to the debt, after the death of the negro girl, embraced in the deed of trust, and enquired whether there were any liens on Burnes’ other slaves, to which witness replied he thought not; and then he enquired'into the pecuniary condition of Light, to which witness replied that he thought it was good. The plaintiff returned the next day and said he had taken Light as security for his debt, and that he preferred personal security to security of slaves, because he thought it less troublesome, and asked witness to keep a look out for him, and let him know if any danger should occur. That about a year afterwards, plaintiff went to see Burnes, after being advised by witness that there was danger, and, upon his return, remarked to witness that he had been put off by good words again, and said he had concluded to wait awhile longer. Proof was also given that judgment had been recovered by the plaintiff on the last bond, and money was collected thereon in July, 1846, to the amount of about $400, and paid to the plaintiff in satisfaction of the trust debt. The court decreed for the plaintiff, in March, 1849, the payment of the balance of the last bond (less the money collected on the judgment, $475) out of the proceeds of a sale of the slave, which was directed to be made, and for costs. A motion for a rehearing was made and overruled, and the defendant, Hulse, appealed to this, court. — 506 — The appellant, Hulse, questions 'the propriety oí the decree of the court below, and contends that the court should hare decreed that the act of complainant, in taking a new note for the original debt, secured by the deed of trust, with personal security, was a payment of the original note; of at least a substitution of a different and new security for the original debt, so as to destroy all lien on the trust property. 1. In looking into the facts of this case, as preserved on the record, it will appear that one of the slaves mentioned in the deed of trust executed by Burnes, the defendant, to Thorn-burg, the defendant, in order to secure the payment of the debt of Burnes to the complainant, had died; that the complainant, after the death of the slave, then sought to have his debt better secured, and took a new note with one Light as security. It appears that Burnes, the defendant, had made en-quiry about the effect of the taking of a new note on the deed of trust, and was informed that it would not destroy the lien created by the deed ; but there is some doubt, as regards the time when this enquiry was made, whether before or after the taking of the new note, with Light as security. The record shows that the original note, payment of which was secured by the deed of trust on the slaves, was to bear six per cent, interest; and that when the new note, with personal security, was taken for the amount then due, it bore interest at ten per cent. On this last note, judgment had been obtained and some four hundred dollars had been made. Hulse, the defendant, who purchased of Burnes the negro boy mentioned in the deed of trust, does not pretend that he was ignorant of the trust; that he was an innocent purchaser, without notice; but he relies, mainly, on the ground that the new note, with Light as security, was a payment of the original debt, and operated so as completely to extinguish the lien originally created by the deed of trust. In the opinion of this court, the lien still remained on the negro boy. It was not the intention of the parties to annul or destroy it. The security of Light was in addition to that al — 507 — ready made by tbe deed, and was owing, no doubt, to tbe death of one of tbe slaves mentioned in tbe deed. If it bad been tbe design or intention of tbe parties to destroy tbe lien on tbe slave that was still living when tbe new note was taken, with Light as security, it could have easily been made manifest, by declaring so, in writing, or by ordering tbe trustee to mark on it that the lien was destroyed by tbe consent and agreement of tbe parties, or by any other of tbe various modes, showing tbe acts and designs of individuals. But, in all probability, this lien remaining on tbe surviving negro, might have been one of tbe means by which tbe defendant, Burnes, was enabled to give personal security and obtain longer indulgence. There is no error, then, in tbe court below, in decreeing that tbe lien was still existing on tbe negro boy, and that tbe complainant bad tbe right to pursue bis lien and enforce it, though tbe boy was in tbe possession of Hulse, under purchase by him from Burnes. But it is tbe opinion of this court, that tbe negro boy is subject only to tbe lien of tbe original debt, with six per cent., instead of tbe amount in tbe new note, with ten per cent. ; that tbe new note neither destroyed nor increased tbe amount of tbe original liability. Therefore, so much of the decree as subjected tbe negro to tbe payment of the debt of tbe last note, with ten per cent., after deducting tbe payment on execution of tbe money already made, was, so far as regards tbe rate of interest, erroneous. Tbe negro should have been considered as liable to tbe lien of tbe original debt, with six per cent, only. Tbe deed of trust on tbe negro was to secure tbe payment of tbe debt, with six per cent., not ten per cent. This lien is not extinguished. Tbe decree should have been for tbe complainant, enforcing tbe lien by sale of tbe negro boy, in order to make payment to tbe complainant of tbe amount of tbe original debt yet remaining unpaid, with six per cent, interest per annum. Tbe decree of tbe Circuit Court is, therefore, reversed, and — 508 — the cause remanded, with directions to enter for the complainant a decree in pursuance of this opinion — the other Judges concurring.