Court Opinion

ID: 7101095
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:15:50.466531+00
Date Added: 2024-06-11T16:13:24.698423
License: Public Domain

Adams, J.,
dissenting. Where a debtor undertakes to cover his property by a mortgage, executed without consideration, such mortgage will be set aside or postponed at the instance of a creditor having a lien upon the property mortgaged. So far there is no controversy; we differ when we come to the question of consideration.
The mortgage was executed in October, 1882, a month and ten days after the original transaction. Duncan parted with *228nothing at that time, and Miller received nothing, either then or at any other time.
I concede that a mortgage given for an antecedent debt is not without consideration, if the debt is the debt of the mortgagor. But, in the case at bar, not only was no debt duo to Duncan from the mortgagor, but no debt was due him from any one. If we sustain this mortgage as against a lien creditor, we shall go much further than any case that I have been able to discover.
What are the exact facts of this case? When Duncan gave his accommodation note, there arose an implied promise on the part of the bank to keep him unharmed. Afterwards, when Duncan paid the note, the bank for the first time became indebted to him. Miller, at the outset, and also when he made the mortgage in question, was at most a mere guarantor of a party who was a mere indemnifier. That there was no debt at the time for which Miller could be liable, see Thomas v. Cook, 8 B. & C., 728; Tones v. Shorter, 1 Ga., 294; Chapin v. Merrill, 4 Wend., 657; Holmes v. Knights, 10 N. H., 175; Dunn v. West, 5 B. Mon., 376; Lucas v. Chamberlain, 8 Id., 276.
We should hear in mind another thing, and that is, that Miller did not promise to give this mortgage when Duncan gave his note. His promise was merely to protect. That, if anything, was a promise to pay if the bank did not; if it could be enforced at all, it could be enforced only by compelling payment, and not by compelling the execution of a mortgage. There was, then, no antecedent obligation to give the mortgage, and, there being no indebtedness to Duncan, at that time as a consideration, I do not see how the mortgage can be sustained as against a lien creditor.
But the plaintiff hasj if possible, even a deeper trouble than that. He did not even have a mortgage upon the property at the time the attachment was levied. It is said, to be sure, that he had an equitable right to a mortgage. But I do not understand that he had, under the authorities. If he had *229parted with something at the time he took his mistaken mortgage, and on the strength of a promise of a mortgage upon the property in question, the fact that he parted with something would have given him an equitable right to a mortgage upon the property agreed upon.- But he not only did not become a creditor at that time, but he was not even an antecedent creditor.
I do not think, indeed, that the case would be different if he had been an antecedent creditor. An abortive attempt by one antecedent creditor to secure a lien by mortgage could not give him a superior equity over another antecedent creditor who has made a successful attempt to secure a lien hy attachment. In my opinion the right to foreclose as against these attaching creditors should have been denied, or the lien by attachment held paramount.
Mr. Justice Reed concurs in this dissent.