Carr v. Hodge

Exdicott, J.

In this case, no exceptions were taken to the master’s report; and the only question before us is whether, upon the findings of the master, the presiding judge was justified in entering a decree that the plaintiff should pay the defendant the sum of $550.90, in order to obtain the discharge of the mort gage. This amount includes the balance due on the notes secured by the defendant’s mortgage, and also the sum paid by the defendant for insurance on the steamboat. The plaintiff now makes no question as to the balance due upon the notes; but contends that he is not bound to account to the defendant for the money paid by him in effecting insurance upon the vessel.

It appears by the master’s report that Bachelder, the owner of the steamboat, was indebted to the defendant in the sum of $2747.25, for a boiler built by him and put into the steamboat; and, on July 18, 1875, Bachelder gave to the defendant two notes, one for $1370.25 and the other for $1377, and Bachelder gave as security therefor, on the same day, a mortgage on his interest in the steamboat, which was duly recorded.

The mortgage does not refer to the notes, but secures the payment of the amount of the notes, viz. $2747.25. It contains an express provision that insurance shall be obtained on Bach-elder’s interest in the steamboat to an amount not less than the loan of the defendant to him; and the defendant is authorized, if such insurance is not seasonably obtained by Bachelder, to procure it at his expense. The master has found that the insurance was effected by the defendant, and a policy was issued to Bachelder, payable to the defendant in case of loss. The premium note signed by Bachelder and indorsed by the defendant was not paid at maturity, and, having been duly protested, was paid by the defendant. It sufficiently appears from the master’s report that this insurance was obtained in conformity with the agreement of the parties recited in the mortgage. It therefore becomes immaterial that the policy was dated the day before the mortgage.

The defendant is clearly entitled, as against Bachelder, to be reimbursed the sum so paid by him before he can be required to dischai’ge the mortgage. If there had been a loss, the money received on the policy by the defendant would have enured to the benefit of Bachelder, and would have reduced his debt to the defendant pro tanto. Fowley v. Palmer, 5 Gray, 549. The defendant is equally entitled in equity to be reimbursed, as against the plaintiff, who, as holder of subsequent mortgages on the steamboat, seeks by this bill to redeem the defendant’s mortgage.

The writing given by the defendant to Bachelder with the mortgage, certifying that the mortgage was given as collateral security for the two notes, and that the mortgage would be null and void when the notes were paid, does not necessarily change the express provisions of the mortgage in regard to insurance. The mortgage made no mention of the notes, and the master has found that “ the paper was given for the purpose of identifying the notes secured by the mortgage; ” and to that finding no exception is taken.

Decree affirmed.