Court Opinion

ID: 7892717
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:50:37.701434+00
Date Added: 2024-06-11T16:31:57.931012
License: Public Domain

Baiítol, C. J.,
delivered the following dissenting opinion:
The decision of this case depends entirely upon the construction of the assignment made by Tyson and wife to Samuel Chew. Unless the intention of the ‘parties to that assignment plainly expressed in the instrument, or clearly indicated by their acts as disclosed in the record, was to confer on the assignee a preferred lien or priority for the payment of the note assigned to him, in preference to the other notes secured by the mortgage, then the rule adopted by the Court below, in directing a pro rata distribution of the fund among the several assignees, was correct.
I hold the principle in such case to be clear, that different parties holding respectively the several notes, or being entitled to the several instalments or portions of the debt secured by one mortgage, stand in equali jure; and if the property conveyed by the mortgage be insufficient to pay the whole debt, they are entitled to participate pari passu in the fund.
On that question I concur wfith the ruling of the Supreme Court of Pennsylvania, in Donly vs. Hays, 17 Berg. & Rawle, 400, which has been followed by subsequent decisions in that State, and in Ohio, Mississippi, Tennessee, California and Missouri, and which appears to have been recognized also in New York, in Van Rensellaer vs. Stafford, 1 Hop. Ch. R. 569.
Such rule seems to me to be consistent with reason and justice. Where several parties are interested as part owners *378of a claim, secured by a mortgage or other pledge, if the security should prove inadequate to pay them in full, it is equitable that it should be divided among them ratably. This principle appears to me to be applicable to the case of a mortgage to secure an entire debt, payable in instalments. The mortgage is as much a security for the last instalment as the first; and as between the several holders of the security, whether as original parties, or by assignment, there is no equitable ground for preference or priority.
The only qualification to this rule is where the assignor, by guarantee or otherwise, becomes liable to the assignee for the payment of the instalment or part of the debt assigned. In such case the assignor, if he continues to hold the other portion of the debt, would not be allowed to participate in the fund, until the instalment due the assignee has been fully paid.
The effect of a contrary rule would be to lead to a mere circuity of action; for the assignor, thus remaining responsible, would be liable to the assignee for any deficiency, and for that reason would not be permitted to claim any part of the fund to the exclusion of the claim of the assignee.
In this case the assignment from Tyson and wife to Chew was made without recourse; they were in no manner liable as guarantors or sureties for its payment. Chew, as purchaser, became entitled to a part of the claim secured by the mortgage, to the extent of the-note for $2,300, and the mortgage was assigned to him pro tanto; leaving Tyson and wife entitled to the other notes, and entitled also to participate with him to that extent, in the common security. That right was transferred by the subsequent assignments to Buchanan and Clark.
It is not denied that it was competent for the mortgagees, by the assignment to Chew, to confer on him a priority or preference, which would entitle him to be first paid out of the fund, and postpone to his claim the other notes secured by the mortgage, either in their hands or in the hands of *379subsequent assignees; and if such were the force and effect of the assignment to Chew, he is entitled to have the benefit of priority in the distribution of the fund. The duty of the Court is to give effect to the intent of the parties. After a careful examination of the terms of the assignment to Chew, I do not find any such intent expressed in the instrument, or implied by the acts of the parties.
By the assignment of the note for $2,300, the mortgage, being merely incidental or appurtenant thereto, yrould have passed to the assignee pro tanto, without any express assignment of the mortgage itself; this instrument conferred upon Chew no better rights, so far as the question of priority is concerned, than he would have held under the assignment of the note, unless by its terms there was secured to him the right to have priority of payment over the other notes secured by the mortgage. The appellant has contended that such is the effect of the words, “ so that the said Samuel Chew shall have priority of lien therefor/’ found in the assignment. If these words stood alone, without any qualification, they might be susceptible of the construction contended for by the appellant; but they are followed immediately in the same sentence by the words, “ as the said Kaehel Tyson might or could have held the same, if this assignment had not been made.” These last must be construed as limiting or qualifying all the preceding words in the same sentence of which they form a part, and it seems to me to negative any intention to give to Chew, the assignee, any other priority of lien than that which was secured by tbe mortgage itself, and was held by Tyson the mortgagee.
Taking the whole instrument together, it seems to have been the intention of the parties, that Chew, who had purchased the note and taken it without recourse, relied upon the security of the mortgage to that extent, and was content to take such priority of lien as was secured by tbe mortgage, and held by the mortgagee. If the intention had been to give to him a prior claim or lien for the note so assigned to *380him, over the other notes secured by the mortgage, I think more plain and appropriate words would have been used.
Being of opinion that the construction given to the assignment by th¿ Court below was correct, I think the decree ought to be affirmed.