Court Opinion

ID: 6576202
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:34:32.134626+00
Date Added: 2024-06-11T15:57:06.517520
License: Public Domain

ErmsvvoRTH, J.
This case, though extending over a great surface, and involving many and complex transactions, in truth involves only common and well settled principles. The amount of property is large, and it is divisible into parts* each of which is subject to its peculiar considerations; but to none of them have the plaintiffs a title, except the land and factory of the Norwich Woolen Company. This they seek to redeem. They insist, that the defendants, J. A. Rockwell and H. Hall, who are prior mortgagees, have other property which they received from Charles W. Rockwell and the Norwich Woolen Co., and which they ought to apply to reduce their debts, and leave the security held by the plaintiffs so much the more relieved.
The first claim, is, that the defendants shall be charged with 2730 dollars, the value of a lot of wool, contained in one of their mortgages. The defendants admit the fact, but say, they have not received the wool; that the Norwich Woolen Co. had not paid Huntington & Co., the vendors, who, still having the possession, set up a lien for the price, and refused to give up the wool, when demanded, by the defendants. The defendants have never refused the use of their names to obtain possession, but have declined embarking in litigation themselves, in order to try the question of title. We doubt if they had the title, except subject to the lien for the price, and which they were not bound to remove. At all events, in accounting, they could not, under the circumstances, be held liable for this wool to Charles W- Rockwell, *458or the Norwich Woolen Co. ; nor can they be liable to those -who represent them.
The same is true of the lot of coal, worth 1026 dollars, bought of E. Chappell, though the title to this is less doubtful. In relation to both the coal and the wool, we see nothing in the conduct or inactivity of the defendants, as mortgagees, which should make them liable for this property, which they have not received.
It is next claimed, that the defendants are liable for the rent of the mill, at the rate of 5400 dollars a year, (its ascertained value,) from the time they took possession until it was given up, by Almy, Patterson & Co., a period of some twenty months. There is no doubt a mortgagee in possession, by tenant or otherwise, is accountable, and bound to apply the rent to lessen his debt. Here, the defendants were themselves only some fifty days in possession,just to complete the unfinished work, that it might be sold, and the workmen paid; to whom J. A. Rockwell, one of the defendants, was security for their wages, in a bond of 5400 dollars, agreeably to the stipulations in the mortgage deed. Rent for these fifty days, we think, is sufficiently accounted for, in the enhanced value of the goods, which were sold, and the avails duly applied towards the debt of the Norwich Woolen Company.
At the expiration of the fifty days, the defendants gave up possession, and the mortgagors let the mill, and gave possession to Almy, Patterson & Co., who run it about eighteen months, under a contract for a longer period, entered into with the mortgagors, as we think, fairly and properly enough, as the best thing that could be done at the time. The mill was run at a great loss. That loss must be borne, by the persons engaged in that experiment; and we cannot relieve them against the bonds of 15,000 dollars, given to Almy, Patterson & Co.; but there is no reason for holding the defendants, (not in possession,) accountable for rent.
As to the sale of 42,000 dollars of personal property, by the defendants, to Almy, Patterson & Co., and the application of the money, by the defendants, on their liabilities for the Norwich Wooten Company, we see no objection whatever. There is no evidence, that more could have been realized, in any other way. The liabilities of the defendants for the company, were immense. It was a duty they owed *459themselves, and all others concerned in these securities, to convert this large mass of property into cash, at an early-day, and pay the debts, as fast as they fell due. We see nothing censurable or exceptionable in the entire arrangement made with Almy, Patterson & Co. At the best, the defendants will be losers, besides their 5000 dollars, each, which, of course, is no incumbrance upon the property mortgaged, since it was an enterprise of their own, at their own risk. Nor is there any technical rule of evidence, as was contended, on the argument, that renders it improper for us to view the sale to Almy, Patterson & Co., as is claimed by the defendants.
It is again claimed, that Charles W. Rockwell, being president of the Norwich Woolen Co., (a joint stock corporation, under the statute,) failed to conduct the business of the company conformably to the provisions of the law; in which default, it is said, the defendants are implicated ; and therefore, the company becomes an ordinary partnership ; and its members must be postponed to all its creditors. This might be the consequence, if there were facts to sustain the claim; but there are none.
Again, it is said, that a rateable proportion of the 24,000 dollars, received for the dwelling-house of C. W. Rockwell, should be applied to sink the company debts, and not exclusively, as has been done, the private debts of C. W. Rockwell. C. W. Rockwell, being under private liabilities to the defendants, to the amount of 40,000 dollars, and the Norwich Woolen Company, to the amount of 49,200 dollars, making 89,200 dollars, he mortgaged to them his dwelling-house, to indemnify against all these liabilities; and the Norwich Woolen Company mortgaged, to indemnify against the company liabilities. Neither the company, nor private liabilities are extinguished, after all, or nearly all, the property has been applied; nor will the defendants be kept harmless, after the small remainder shall be applied ; and why, then, are they to be postponed, or to come in upon an equality with subsequent mortgagees ? The remaining private property of C. W. Rockwell, the land unsold, being of the value of 2500 dollars, when sold, may be, if it must not be, applied on the private debts of said Rockwell, for which the defendants are liable. And as to the 2155 dollars, in their hands, received *460on the 16th day of February, 1847, for the personal property of the Norwich Woolen Company, sold to Alrny, Patterson & Co., the defendants must apply that amount, with interest, upon the debt due the defendants from the company ; and beyond that, we do not hold them accountable to the plaintiffs, except what has been done.
In this opinion the other Judges concurred.
Decree accordingly.