Court Opinion

ID: 9417264
Source: CourtListenerOpinion
Date Created: 2023-08-02 20:07:14.555531+00
Date Added: 2024-06-11T17:21:38.064482
License: Public Domain

Me. Justice Milleb and Me. Justice Hablan
dissented.
A petition for a rehearing having been filed, Mr. Justice Field, at a subsequent day of the term, delivered the opinion of the court.
By the decision in this case we held that, in the distribution of the surplus moneys in' court, the claim of McCormick should be paid before that of the bank. He took his mortgage without notice of the one to the bank, which had not been registered. The bank now asks a rehearing of the case on this point, contending that, under the decisions of the New York courts, the priority of its mortgage cannot be displaced. It cites the statute of. the State to show that the recording act gives priority only to the mortgage first recorded, when that is executed for a valuable consideration, which, according to those decisions, means some new consideration advanced at the time; and that a mortgage for a pre-existing indebtedness is not protected. by a prior record, against a non-recorded mortgage for value. Here the mortgage to McCormick was given to secure *104— to the extent of $1,500 — a previous liability and indebtedness, and such as might be subsequently incurred. The previous indebtedness at the time equalled thq whole amount of the intended security.
There would be force in the position of the bank if its own mortgage stood in any better condition. When the McCormick mortgage was executed— Sept. 16,1872— the indebtedness of Whitney to the bank was paid, and his mortgage remained in force only for any future indebtedness which he might incur. For such future indebtedness it could riot cut out the mortgage to McCormick, executed for an existing indebtedness, and- of which mortgage the bank had notice. For advances after-wards made, the mortgage to the bank was a subsequent in-cumbrance.
As between, two mortgages, — one for a past indebtedness, and one for an indebtedness to-be subsequently incurred, —the one for the past-indebtedness must have precedence, if first recorded.
The petition for a rehearing by the bank must, therefore, be denied.
The petition of McCormick to be allowed costs out of- the ' fund in court must, according to. the usual practice of the court in such cases, be also denied. His costs are chargeable against the bank which contested his right to be paid out of the proceeds in court. If paid out of the fund, they would reduce by their amount the moneys properly applicable to the. indebtedness of Whitney. ' '

Petition denied.