Court Opinion

ID: 3423487
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:51:10.631954+00
Date Added: 2024-06-11T13:54:15.574770
License: Public Domain

ON PETITION FOR REHEARING.
On petition for rehearing, appellee relies chiefly upon the case of Vermillion v. First Nat. Bank (1914),  59 Ind. App. 35, 105 N.E. 530, 108 N.E. 350. But the controlling facts 5.  involved in that case are so different from the facts here that it has but little force in determining the issues herein. The mortgage there involved provided that the mortgagor might sell the goods in the usual course of trade or business, upon the express condition that he should account to the mortgagee for said sales, deducting from the gross amount thereof the expenses of making such sales, the residue thereof to be applied to the debt secured. In the instant case, however, the mortgagor was required to deposit but one-half of his daily receipts to be credited on the notes secured by the mortgage, such money to be derived from the business where the property mortgaged was located. There was no provision whatever as to what should become of the other half of the daily receipts, and the mortgagor was left free to use the same as he pleased. He was not required in any way to account therefor. In the Vermillion case, the court says: "If it should appear that . . . the mortgagor was to be permitted to use the proceeds of the sale of the goods, or any substantial part thereof, for his own use and benefit, and as he might choose, and that he was not to be required to account for such proceeds, or apply them on the debts described in the mortgages, such facts would *Page 189 
require an inference of an existence of such a trust." In this case, the mortgagor was permitted to use proceeds of the sale of half of the goods as he chose, which was certainly a substantial part thereof. The Vermillion case also states as a rule of law that, "until the contrary appears, it will be presumed that a mortgagor who is permitted to retain possession of and sell mortgaged chattels does so under an agreement to account as the agent of the mortgagee, and the proceeds will be regarded as applied to the liquidation of the mortgaged debt, whether they have been actually paid over or not," citing New v. Sailors
(1888), 114 Ind. 407, 16 N.E. 609. In the instant case, there was an express provision in the mortgage that one-half of the daily receipts should be deposited in the bank to be applied upon the mortgage debt, and, as stated in the original opinion, had such application been made, even after deducting $200 per month for living expenses, $60 per week for salaries, and C.O.D. express shipments $500, the debt would have been fully paid. As stated in the Vermillion case, the proceeds will be regarded as applied to the liquidation of the mortgage debt, and, so applied, the debt was fully discharged.
Petition for rehearing denied.
Dausman, J., absent.