Court Opinion

ID: 6235925
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:32:29.718741+00
Date Added: 2024-06-11T08:58:02.992591
License: Public Domain

Mr. Justice Gordon
delivered the opinion of the court, January 6th 1879.
The amendment allowed by the court by which certain alleged equitable plaintiffs were added to the record, was of no moment whatever, since nothing was thereby added to the responsibility of the mortgagor. She was accountable to Baum, the mortgagee, alone, and not to the use plaintiffs. If she owed him nothing, they could get nothing; on the other hand, if he had the right to recover, it was of no consequence to her how matters were arranged between Baum and his assigns. It was, however, a mistake to *117treat the case as though Baum were a trustee for the endorsees of the notes made by O’Hara, or to suppose that the mortgage inured to the benefit of such endorsees. The mortgage of Mrs. O’Hara was, by its terms, intended to indemnify Baum personally against any loss that might happen to him by reason of his endorsement of O’Hara’s paper, and if, by any means, or for any reason, he was released from payment that was the end of her obligation. She was not bound to take care of the paper, that was the maker’s business, she was only bound to see that no damage resulted to Baum by reason of his connection with it. Hence, the mistake in treating the mortgage as a collateral guaranty of the paper, and the holders of it as having an equitable right in that mortgage, whereas in Baum alone was that right, and that only to the extent of such of the O’Hara notes as ho might be obliged to pay. For the undertaking of Mrs. O’Hara being only that of indemnity, she having, herself, no interest in the paper, she must be regarded as standiug in a position not less favorable than that of a prior endorser. But it is held in Byles on Bills, 5th Am. ed. 576, note, that before an endorser can bring suit against prior parties, he must take up the bill. Unless, therefore, it was otherwise intended, and in case of a married woman, there can be no intendment not apparent on the face of her deed, it must be presumed that those who took the O’Hara paper took it on the credit of the maker and endorser, and not on the credit of the mortgage: Peterson v. Willing, 3 Dal. 506.
Again, how could Baum continue to hold the beneficial interest in this mortgage after his assignment to Fulton ? As long as he owned it, it continued to be his personal security, but when he parted with it, it could no longer have that effect, for he had then no more right in it than in the mortgage of a stranger. He assigned to Fulton “the mortgage” and “all the moneys secured thereby.” Fulton was thus invested with all Baum’s right; he could, through the mortgage, charge Mrs. O’Hara’s land with all the moneys Baum had paid on the endorsements for Michael O’Hara, and that was all that could be charged against it. Fulton’s right in this mortgage being thus absolute and unqualified, what was left for Baum ? Had not Fulton the right to exhaust the mortgaged premises in satisfaction of his claim ? Had he not the power to satisfy the mortgage, or to assign it to the mortgagor, or to whomsoever he pleased? Certainly he owned the whole and every part of it, hence wo cannot understand how, after the date of the assignment, it could continue in Baum as security for notes endorsed by him after that time. And when he had thus put an end to the mortgage as a continuing indemnity to himself, and had, by his own act, limited it, as a security, to the moneys which he had then actually paid, we cannot understand how it could afterwards be enlarged by a re-assignment. Would he, by that act, get any thing more than Fulton had? If so, then the re-assignment had the effect to restore to him *118powers which he had voluntarily abandoned; to revoke his own deliberate limitation of the indemnity, and in this manner rebind a released surety. This would, in effect, amount to a re-execution of a mortgage by implication; but this cannot be permitted, and especially as against the rights of a married woman. •
The foregoing reasoning sustains the defendant’s assignments of error from the first to the tenth inclusive; the rest are dismissed as untenable.
The judgment is reversed, and a venire facias de novo ordered.