Greist v. Gowdy , 81 Conn. 351 ( 1908 )

The condition in the mortgage described an indorsed note for $1,500. If the indorsed note of March 13th, 1907, for $500, represented in fact a part of the original indorsed note of $1,500, then this note for $500 is secured by the mortgage. It is familiar law that no change in the form of the indebtedness, or in the mode or time of payment, will discharge the mortgage. Bolles v. Chauncey, 8 Conn. 389, 392; 1 Jones on Mortgages (6th Ed.) § 924. This principle also extends to renewal indorsements. If an indorser, by reason of his indorsement, is compelled to pay the note, and under this necessity indorses a renewal note for the same debt or a part thereof, and is by reason of his renewal indorsement obliged to pay the renewal note, this is a damage necessarily resulting from the first indorsement against which he is entitled to indemnity under the condition of the mortgage. Pond v. Clarke, 14 Conn. 334, overruling, upon this point,Peters v. Goodrich, 3 Conn. 146; Smith v. Prince, 14 id. 472; Boswell v.Goodwin, 31 id. 74; 1 Jones on Mortgages (6th Ed.) § 934. This proposition is not formally disputed by the defendant, though the point is made in his second reason of appeal.

The defendant does, however, insist that the $500 note is not in fact a renewal of any obligation incurred under the first indorsement, because when the renewal of the $1,000 indorsed note became due March 4th, 1907, it was paid by the Laundry Company, and that the $500 note of March 13th was for a new loan and therefore not secured by the mortgage. This question of payment is one of fact, and the finding is conclusive against the defendant's claim.

It appears that when the renewal note for $1,000 came due the plaintiff indorser was absent. The note was payable at a bank and the Laundry Company effected an arrangement with the bank and with the Greist Company, a corporation of which the plaintiff was president and manager, by which this corporation, for the protection of the plaintiff until he should return, temporarily advanced the money necessary to take up the note, upon the agreement that the plaintiff should retain his mortgage security, that the arrangement was temporary and not a payment, and that when the plaintiff returned the bank would discount the Laundry Company's note for $500 of this $1,000, if plaintiff would again indorse, thus continuing the plaintiff's original liability to the extent of $500. The Greist Company took the personal security of the treasurer of the Laundry Company, and later the Laundry Company returned to the Greist Company the money advanced by it. The whole arrangement was for the purpose of tiding over the situation caused by the plaintiff's absence until his return, and upon the specific agreement of all parties that as between the plaintiff and the Laundry Company the transaction was not in any sense to be a payment of the note, a discharge of the plaintiff's liability thereon, or a release of his security. Payment or nonpayment is a question of fact, and the conclusion of the trial court is final, unless in reaching it the court below committed some error of law prejudicial to the plaintiff which entitles him to a new trial. Carroll v. Weaver, 65 Conn. 76, 31 A. 489. We perceive no such error. The transaction in substance was the deposit of the amount of the debt with the agreement that it should not operate as payment, and it finally resulted in the making of a partial payment upon the indorsed note for $1,000, and the indorsing of a new note for the balance of $500, and this $500 was the unpaid balance of the original indorsed note of $1,500. Howe v. Lewis, 14 Pick. (Mass.) 329.

In his brief the defendant claims that even if the note for $500 should be held secured by the mortgage, the judgment is erroneous, because by the terms of the condition the debt was payable in instalments, and only $1,000 was due at the time the foreclosure was brought. This claim was not made before the trial court. The finding shows that no contest was made over the note of $1,000 for borrowed money. The sole question before the court was whether the mortgage secured the note for $500, and the claims of law are to be construed with reference to the matters in fact being litigated. Had this claim been made it would, perhaps, have necessitated a second foreclosure suit, and we may assume that the defendant confined himself before the trial court to the vital question in the case, in order to avoid needless litigation and costs. Had the claim been made, the answer would have been that the mortgagor did not devote the proceeds of the sale of stock to the payment of the note for $1,500 as required by the express terms of the condition.

Another reason of appeal is that the defendant could contest the amount due the plaintiff on the mortgage. The defendant purchased the interest of the Laundry Company at a receiver's sale. He was permitted to show and did show the amount actually due on the mortgage at the date of his purchase, and has no reason to complain on this account.

It is also claimed that the purchaser had the right to rely upon the statements in the mortgage and on the books of the mortgagor as showing the amount due. This claim was properly overruled. It is true that he could rely upon the mortgage as a general description and limitation of the lien, but it is too plain for argument that he could not, as against the mortgagee, rely upon the mortgagor's statements, made without the assent of the mortgagee, as to the amount due, nor could he assume that the contract contained in the condition had been performed by the mortgagor.

The remaining reasons of appeal are based on alleged errors in finding facts. These reasons are not properly before this court under §§ 795 and 796 of the General Statutes, because the record shows that the motion made to the trial judge to correct the finding did not have annexed to it written exceptions to any finding of fact therein, or to any refusal to find a fact as requested, which by the statute could be made the subject of an appeal to the Supreme Court of Errors.

These reasons of appeal may, however, be considered as based on § 797, which provides in substance that in lieu of the motion to correct, to which exceptions are to be annexed, as provided in §§ 795 and 796, the evidence and rulings may, within one week after the filing of the finding, be filed and certified, and the claims for correction therein may be set forth in the assignments of error on appeal. The plaintiff excepts to the consideration of this motion to correct, on the ground that the motion to make the evidence and rulings part of the record came too late. It was in fact made more than two weeks after the finding was filed. But § 797 authorizes the judge to extend the time, and we think his order of certification should be construed as an extension of time under the statute, and we treat the motion to correct the finding as properly before us, no proceedings under §§ 795 and 796 having been commenced.

An examination of the entire evidence has satisfied us that the finding is amply supported by the evidence, and the reasons of appeal relating to the correction of the finding are overruled and the claim for a correction is denied.

There is no error.

In this opinion the other judges concurred.