concurrence">Spring, J. (concurring):

The trust mortgage was given to secure two classes of creditors. The first, those who furnished money to carry on the business, the limit "of which indebtedness was $4,000 annually, and which must be incurred with the consent of the trustee; the second, the claims existing at the time of the giving of the mortgage.

The sons of the original debtor were willing to step into the breach of the waning business and add their personal liability to *590that, of their father; but only Upon, the condition of obtaining time and getting an opportunity to work off the debts by successful management of the business. In order to accomplish this purpose' they gave their notes to the original creditors, due some time aheadj insisting on the further' provision that ho sale of the premises should be had by the trustee except upon the'written request of a majority "of the indebtedness represented by these creditors ■ of the same class.

A reading of the trust mortgage denotes very clearly that these two classes ofdehts were distinct and Were to be treated differently. The aim was to make .the premises pay the large outstanding indebtedness, and in order to accomplish this object and to induce the sons to carry on the farm they must have time on the old debts , and the power, .within- the limit of $4,000, to procure .money to carry on the business. This fresh indebtedness was intended to be only temporary, and must have the preference.

' - The trust mortgage very plainly shows-the-preference of this new indebtedness, for incase of a sale of the premises pursuant -to the trust mortgage, the avails were first to be applied in its liquidation.

When- permission is given tp foreclose, these two classes, of debts are-again recognized and the. distinction -maintained. In the case of advances the preference is manifest.' ■ No one would loan with this large outstanding debt, unless the right .to collect when due existed. Then the úsims, hereto cmnexed were provided for, but a majority was to determine when a foreclosure should be had. These debts are- referred to indiscriminately as claims,, notes, "etc. For instance, the -mortgage recites that the mortgagors have given " .their “promissory notes therefor/’ and a little lower-down, notwithstanding notes have been given, they are referred to as" claims. Again, the fresh indebtedness is termed “ advances,” and the old outstanding indebtedness “ claims,” although all are represented by promiss.ory notes. ■ ~' . " -

There is no confusion about" them for a note was given for each , . one. They were still claims against the original debtor. " The scheme of the trust mortgage could not be carried out if any one of these claimants, whenever his note matured, of his own. motion, "■ could require: the trustee to foreclose the mortgage. - .' The argument made in- the dissenting opinion that in equity, irrespective of the 'agreement, any one with a due claim can foreclose,. *591has no application. The parties here bound themselves by' an agreement and they must conform to its terms. It may be, that if a request had been made to the creditors upon facts presented to them showing that the property was going to waste and a foreclosure of the mortgage was neeessaiy to preserve the property, equity inight interfere, even though a majority of the creditors" did not join in the request to the trustee. But there is no allegation cf that kind in the complaint. " It is merely the attempt of a holder of a note representing one of these claims to ignore his agreement and to foreclose of his own accord without consulting any of his coclaimants.

Uor is there any-warrant for the statement that the plaintiff was not a party to the trust mortgage. She accepted a note for her claim. She is foreclosing the mortgage, recognizing it as an existing contract, although it has no vitality, except to secure claims, one of which she holds. If she accepts the benefits of ' the trust agreement, she must also be governed by its provisions.

I think, construing the mortgage as a whole, a cause of action is not stated in the complaint.

Citation profile

How this case has been treated — in progress