The Hawaiian gazette., 1885-04-08
The mortgage to Messrs. Grinbaum s Go. the


Sugar Company, By which Maciarlane releases
the company as grantee Of the mOrtgago-
Nc Keague from certain obligations IN the
mortgage as 10 cOnsigning the sugars TO him
and valves the breaches OF condition thereby;
extends the time Of payment Of the mortgage
to goth August 1854, and covenants that no
demand shall be made until that day; that
previous breaches Of covenant and condition
are waived; that the company agreed TO pay
the amount Of the mortgage debt liked at
$40, 900 in one year from date. This instru-
ment is signed and acknowledged by Henry
Macfarlane Of II. Macfarlane & Co., and indi-
Gates that at that late date II, Maefarlane and
not 6. w Macfarlaue Il Co. exercised owner
ship Of this mortgage.
As regards advances made under it to Nc
Keague after Kennedy sold out TO the Heeia
Sugar Plantation Company l think that ad
vances made to the original mortgagor and TO
bis successors in the title are properly COW
cred by the mortgage. The MORTGAGE might
raise the question whether the mortgage not
so slipulaiing, he was compelled TO ad-
vance money 20 carry on plantation after 1t
was sold to parties in whom he had no conf
dence. But the money having been advanced
TO the grantee by the mortgagor and expended
in carrying on the plantation, l think equity
would not allow a subsequent mortgage tax
ing his mortgage from the grantee of the orisi-
nal mUrtsagor to question this and in the face
Of the agreement Of the 10th August 1883,
made, as ! understand it, at the instance of
Grinbaum & Co., who then assumed the
agency Of the plantation and paid Macfariane
the excess Of the debt over $40, 00O-amounting
to Si5,sGsij.
The validity under the statute OF frauds of
&c
properly in question in this case. But
a case decided in this Court some years ago
Oh. Hackfeld & Co. VS.. J. X Akina) holds that
the parole assignment of a mortgage Of real es-
tate accompanied by endorsement Of mortgage
note and delivery Of mortgage deed is not in
valid by our statute Of frauds which omits an
important section Of the original &C. of
Charles H.
The question is not whether W. MacGarlane
& Co. can forecose the mortgage for money
advanced by II. Macfarlane, the subsequent
assignment dated July 2lst 1888 would make
the right clear. The real question is whether
tie mortgage is security for such advances as
another firm, of which II. Macfarlane is also a
member succeeding to the agency should
make, aud whether 1t cali be questioned By
subsequent MORTGAGE with notice. The law
cited by counsel for plaintiffs with respect TO
suretieS does not in my opinion apply.
The strict rule which release a surety upon
a deviation from the contract do not apply
here.
The money paid out by g. W. Macfarlauo &
Co., was paid out in pursuance Of the mort
gage for future advances, 50 | think that plain
tiifs cannot now question it.
In VOL, Jones on Mortgages Sec. 373, the
author says 'If the mortgage contains enough
to show contract between the parties, that it
is to stand as a security to the mortgage for
such Indebtedness as may arise from tile future
dealings between the parties, it is sufficient to
put purchaser or incumbrancer upon inquiry,
and if he fails t0 make it he is not entitled TO
protection as bona tide purchaser" It can
not be said that Grinbaum g. Co. did not know
that G.. W. Macarlane q Co. had advanced
the money. They paid this firm through the
Heeia Company for the advances made over
and above the sum secured by the mortgage
and as junior incumbrancers took their mort.
gage subject to the Macfarlane mortgage.
Jones Sec. 376 says that "the agreement
under which advances to a certain amount are
to be made need not be in writing to be binding
and eifectual against subsequent liens" Sus-
tainedby New Jersey and Penn. cases, not &C
cessible. But the agreement must be made
COntempOraneous and no subsequent oral agree
ment can make a mortgage to secure future
advances effectual in preference to junior in
cumbrance. TruscOtt VS.. King, n. Y. l49 and
Hall VS.. Grouse 10 Hun. 557 This last case
is authority that "parOle evidence is admis-
sible 10 show that the mortgage was given to
secure future advances to be made 10y party
not named in the mortgage"
To apply these principles to the case at bar.
The mortgage in question is certainly definite
as 10 the amounts to be advanced, and the
time within which they are to be made, and
the purpose is stated to be the furnishing aud
carrying on of the plantation, and it is unes
sential TO a subsequent MORTGAGE whether
the money be advanced by the original mort
gagee or by firm succeeding to the agency
Of which the original mortgage is a member.
Certainly neither the mortgagor nor his as
signs could question it and fail to see how
the subsequent mortgage could have any
greater equity. He took his mortgage with
knowledge Of the amount for which the prior
mortgage was given and it is no injury to him
that the money was advanced by persons not
parties to the original mortgage.
know Of no principle of law or equity
upon which lie can be allowed to take adYan-
tage of such a fact. He who seeks equity
must do equity. In Joslyn Va. Wyman 5 AL
len %, il was not held that although mort
gage cannot, by oral agreement, be continued
in force as security for a new Indebtedness not
embraced within the terms of its condition,
yet, if such an agreement has been made, and
money has been advanced in consequence
thereof by the mortgage to the mortgagor,
Court of Equity will not aid the latter, or one
who has taken a conveyance from him in a
knowledge Of the facts, in obtaining a release
or discharge the mortgage for the mOrtgagee."
The Court say ii would be contrary to equity
TO allow this as it is in direct violation of his
oral agreement. See also a similar case, Stone
vs.. Lane 10 ! lien ~ and the Court here say
that Court Of Equity will not assist any per-
son to deprive the mortgage Of any security
he would have against the mortgnpor unless
the equitable right Of such person is distinct
from aud superior to that of the mortgagor;
citing Story Eq. Jur. Sec. 1858 N.3 Sec
also Crafts vs.. CrIfts, 10 Gray $50.
The case Of Taylor VS.. Post, 81 Hun. iI9 is
apparently opposed to this view. It decides
that mortgage to secure future advances is
valid for that purpose only to the original
firm which was Mortgage and it could not
by parOl be made to cover or stand security
for new Indebtedness to a successor to the
firm. But this was bill Of foreclosure by
the mortgagee's administrator and does not ef-
feet the question whether junior MORTGAGE
can take this position.
think that plaintiffs having full knowledge
that large proportion Of the sums advanced
under the II. Macfarlane & Co. mortgage, was
advanced by G. W. Macfarlane g. Co., equity
will not permit them to dispute the same.
As regards the Kennedy mortgage, it will
he governed by the findings of fact and of law
as made by me in the case of John McKeague
by his guardian I. A. Lloyd VS.. Kennedy
filed this day.
A decree Of foreclosure in accordance with
law and the principles here enunciated will
be signed on presentation, and reference is
hereby ordered TO Master to ascertain the
amounts due on the several mortgages.
A. S Hartwel and W. r. Austin for plain
titfs; +. NJ. Hatch for defendants, Kennedy
and Macfarlane; W, r. Castle for Cooke.
Honolulu, March IL, 1855.
Supreme Court of the Hawaiian Islands,
In Equity.
JOIN McKEAGuE, BY HIS GUARDIAN, 4. A.
LLOYD, vs.. ALEXANDER KENNEDY.
Before tie Chancellor. Opinion
This is a bill in equity to cancel the mort
gage made TO defendant by John McKeaGue.