Court Opinion

ID: 7188959
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:55:03.861981+00
Date Added: 2024-06-11T16:16:08.392510
License: Public Domain

IIoweix, J.,
dissenting. On second February, 1867, the firm of Montgomery, Peterkin & Co. owed plaintiffs $11,187 79 on an account, for which they made two notes, with interest after maturities, to the order of plaintiffs and playable in December following. The account between the parties was continued without change. On the thirtieth March, 1807, the proceeds of one of these notes was placed to the credit of the makers, a commercial and planting firm. On the twenty-fourth of the next month (April) it appearing that the debt exceeded the amount of the two notes, the excess was paid by W. R. Ward, a member of the firm of Montgomery, Peterkin & Co., who, at the same time, executed a mortgage on his property to secure the payment of' the notes, for the amount of which he confessed judgment in the act and bound himself to ship to plaintiffs the cotton to be raised on their plantations by his firm. No change was made in the account. On the fifth of June following, the proceeds of the other note was placed to the credit of Montgomery, Peterkin & Co., the makers. On the twenty-eighth December, 1867, the date of tiie maturity of the last of the notes, the amount of both was charged in the account, which being closed, shows a balance something less than the two notes. The question is: Were these notes paid by this course of dealing? I think not. When they were discounted the proceeds were placed to the credit of the makers, but they were still outstanding as a subsisting debt against both the makers and the indorsers and secured by the mortgage executed by Ward, whose succession, as I think, is sued in this action to recover the amount due on them with mortgage. When taken up by the indorsers (the plaintiffs), was it a payment of the *641notes or did they return to plaintiffs with the mortgage accessory 9 I think the latter. They were evidently paid with the funds of the indorsers, who were bound with and for the makers, and the payment was with legal subrogation, even if not specially protected by the terms of the mortgage. But Ward, the mortgageor, executed the mortgage expressly to secure their payment at maturity. The makers, in whose behalf he gave this security, did not pay them. No funds were provided either by Ward or the makers for their payment, and heneo the obligations of the act of mortgage are still in force. It certainly was not contemplated that the payment by plaintiffs as indorsers would extinguish the mortgage, for it was given in their favor, or of any holder, to secure their payment by the makers or the mortgageor. Had the latter or either of them furnished the funds to make the payment, there would have been no occasion for this suit or any other on this debt.
I think the mortgage is in force upon the property which Ward was capable of mortgaging and deem it unnecessary to determine the nature of the debtor firm.