Opinion
No. 3862.
Decided December 6, 1949.
A promissory note given as collateral security for a pre-existing debt does not postpone the payee's right to collect the debt until the note's maturity. Where a promissory note and mortgage is given and accepted as a conditional payment of a pre-existing debt already secured by mortgages a subsequent attaching creditor is not entitled to relief because of the foreclosure of the first mortgages prior to the later note's maturity where he had given his consent thereto.
MOTION, for further hearing wherein the plaintiff, a subsequent attaching creditor, seeks to establish that the foreclosure of chattel mortgages by the defendant corporation, a prior mortgagee by assignment, was premature and thereby invalid. Same case reported in 95 N.H. 395, to which reference may be made for a statement of the facts.
Plaintiff's motion is quoted: "The plaintiff respectfully moves for further hearing relative to — (a) The pre-maturity of the commencement of foreclosure which was contrary to the opinion in the case of Hill v. Marcy, 49 N.H. 265, 268, — according to which the mortgage foreclosure could not have been started, at the earliest, in case of default, before March 2, 1948. Also the duty of good faith on the part of a foreclosing mortgagee towards subsequent lien holders indicated in the case of Roberge v. Cyr, 84 N.H. 204 and Dougan v. Bank, 92 N.H. 44." The Presiding Justice denied the motion for further hearing and plaintiff's bill of exceptions was allowed by Goodnow, C.J.
Samuel A. Margolis (by brief and orally), for the plaintiff.
Robert J. Doyle, for the defendants.
If the later consolidated note and mortgage given by Talbot, the defendant mortgagor, to the defendant corporation was in satisfaction of the prior notes and mortgages, there could be no foreclosure of the consolidated note and mortgage until its maturity. In such a case the new note is the measure of the creditor's right and limitation on the time of its enforcement. Samales v. Essie, 94 N.H. 262, 264. In the former transfer (General Mills v. Corporation, 95 N.H. 395) the plaintiff sought an adjudication that the prior notes and mortgages were paid and discharged by the consolidated one but this relief was denied and cannot be reasserted again.
Plaintiff contends, however, that although the later note and mortgage did not operate as payment of the pre-existing debt, it did postpone the defendant corporation's right to foreclose until the maturity of that note. Hill v. Marcy, 49 N.H. 265, 268. The consolidated note was given either as conditional payment or as collateral security or both. If given merely as collateral security, the defendant corporation was not required to await its maturity before collecting the debt represented by the prior mortgages. Whitney v. Goin, 20 N.H. 354, 357, 359. Cf. Moore v. Fitz, 59 N.H. 572. If the consolidated note was also given and accepted by the parties as conditional payment (6 Williston, Contracts, Rev. ed., ss. 1875 F, 1875 H) so as to extend the time of foreclosure, there is no basis in the record for a claim by the plaintiff that he is entitled to relief for breach of the extension agreement. The foreclosure sale was originally enjoined by the plaintiff but thereafter the sale was consented to by all the parties to this proceeding and sanctioned by the court. Plaintiff having consented to the sale cannot now claim damage for its alleged prematurity whatever may have been its rights in the mortgagor's equity. See R. L., c. 388, s. 26. For the same reason the second ground of the plaintiff's motion could not entitle it to relief.
It is unnecessary to consider other reasons advanced by the defendant in support of the Trial Court's ruling and the order is
Exception overruled.
All concurred.