Thompson v. Field

Holmes, Judge, delivered the opinion of the court. The material question submitted for decision in this case is whether the proceeds of the sale, under the decree of foreclosure of the mortgage, are to be applied to the payment of the several notes in the order in which they became due, or are to be distributed pro rata. This question was decided in the case of Mitchell v. Ladew, 36 Mo. 526, upon a full consideration of the authorities. We have been asked to review that decision, and the matter has been re-argued with much learning and ability; but we see no good ground, on principle or authority, for departing from the conclusion then arrived at. In this case, indeed, we may take the question to have been settled by the express agreement of the parties as contained in the terms of the mortgage itself. It reads thus : “ It is expressly understood, also, that said notes are to be a lien upon and satisfied out of the proceeds of said land and property in the order in which they are or may become due, those becoming due first to be paid in preference and before the others.” It is true that the other provisions of the mortgage, as well as of the previous contracts of the parties, speak of the profits or proceeds of the farming operations, and provide that, if such profits shall be paid every year upon the notes, to be applied in the order in which they became due, the time of the payment of the notes shall be extended. The parties evidently contemplated that the notes would be [326] thus finally paid off out of the profits to be made on the farming operations; and it is altogether probable, as insisted on by the defendants, that the word “ proceeds ” in the above cited clause referred to such profits. But it was also contemplated that in case the notes should not be paid in that manner, they were to be satisfied by a sale of the mortgaged property. The language used in this clause is broad enough to include both the profits of the farm and the proceeds of such sale, and it must have been intended that the notes should be paid in the one way or the other; and in either case they were to be paid in the order in which they became due. The main purpose of this clause would seem to have been to make an express agreement that the notes first becoming due should be paid in preference and before the others, without regard to the mode in which they should be paid. This was the important thing for both parties in reference to the interest. Such seems to have been the construction given to the mortgage in the court below, and in this view we entirely concur. It follows that there was no error in the decree that was rendered. With regard to the deposition of John H. Chiles, the as-signee of the notes which were the subject of the suit, we find no substantial error in the ruling of the court below. The material parts of the testimony which was admitted related to facts occurring at the time of the assignment, or afterwards. There was nothing in it which concerned the execution or validity of the instruments. The parts excluded may be regarded as wholly immaterial to the decision of the case. Judgment affirmed. Judge Wagner concurs; Judge Lovelace absent.