New-Hampshire Bank v. Willard

Parker, C. J. The deed in this case purports to contain a condition for the payment of the sum of $5-000; and is, according to the literal terms of the condition, a mortgage to secure that sum. But the condition provides that on the payment of said sum of $5'000, the deed, and also a bond of the same date, in the penal sum of $5-000, shall both be void. The natural inference is, that the mortgage was taken as a security for the penal sum of the bond, and intended to ensure the fulfilment of the stipulations contained in the condition of the bond; and it is conceded that such is the case. The sum of $5-000, mentioned in the condition of [213] the deed, was not intended as a sum absolutely due, and to be paid ; and in ascertaining, therefore, what is due in equity, we must enquire what is due upon, or secured by, the bond. The bond being made at the same time and referred to in this manner, may be considered, as between the parties, as if it was part of the condition. Bassett vs. Bassett, Cheshire, July, 1839, ante 64. But the bond is not a single obligation for the payment of this sum of $ 5'000. That is referred to, in the condition of the deed, as a penal sum. It has been argued that the condition secures future liabilities alone ; but we think this not its true construction. It provides for the payment of all sums of money which maybe discounted on notes, drafts, &c. drawn or accepted by the defendant, or which, being now so made, indorsed, &c. may, or shall hereafter, before the 16th of August, 1838, be discounted by the bank ; and also provides that the defendant shall save harmless and indemnify the bank from all damages, &c. “ by reason of said notes, drafts or acceptances so discounted, or which may be so discounted by said bank.” There seems, in the construction of this condition, to have been an attempt at precision, which came very near defeating its own purpose; but we are of opinion that the bond was intended to cover the debts of the defendant existing at the time, and that it is sufficient for that purpose, to the extent of the penal sum. The language of the latter part of the condition, which speaks of the notes, &c. “ so discounted, or which may be so discounted,” shows that the prior provisions were understood to embrace what was already due. The whole language of the condition is to be considered in ascertaining the true construction of different parts of it. There was, at the time, a note due to the bank, on which the defendant was a joint and several promiser, with another person. There can be no question but what this was within the condition, upon the construction above stated. This note has been given up, and the several note of the defend [214] ant has been taken for half the amount. This must be regarded in equity as a part of the same debt, and is secured by this mortgage. 2 N. H. Rep. 525, Elliot vs. Sleeper; 16 Pick. R. 22, Pomeroy vs. Rice. The case Elliot vs. Sleeper would be precisely in point, were it not that in this case there were two promisors, and the several note of each was taken for a moiety of the debt, instead of a new note of both. But we think this can make no difference. The presumption is, that the two signers of the note were, as between themselves, liable each for the payment of one half; and in that case the new note given by Willard was given for what was his debt, and the debt may well be considered as subsisting. It has certainly not been paid. If the taking of the separate securities may operate as a discharge of the former note, so that no action could be sustained on that, the debt itself has not been extinguished. No money has been paid, nor any release given. Nothing has been accepted in satisfaction of the debt. It is a mere change of the security, and of the evidence of the debt, from a joint and several note, to two,several ones, so that the debtors no longer stand as sureties to each other, for the proportion of each. Another part of the condition of the bond covers debts and liabilities which should afterwards be contracted by the obligor, to the bank ; and the question is, whether certain notes, endorsed by the defendant and his partner, since the mortgage was executed, can be allowed. We are clearly of opinion that they cannot be taken into consideration. The statute of July 3, 1829, provides that no title, or estate in fee simple, &c. which shall hereafter be conveyed in mortgage, shall be held by the mortgagee for the payment of any sum or sums of money, or the performance of any other thing,, the obligation or liability to the payment or performance of which shall arise, be made, or contracted after the execution and delivery of such mortgage.” The terms are express, that the title shall not be held by the mortgagee, for the payment of any such sums; and the provision applies as [215] well to a ease where the objection is taken by the mortgagee himself, as where it is made by third persons. It was doubtless intended to prevent the execution of mortgages founded upon such conditions. But this does not affect the other part of the condition, and the plaintiffs are entitled to a conditional judgment, for the amount due on the note of $s3T00.