Opinion
No. 4137.
Decided December 2, 1952.
Where the defendant defaulted upon his chattel mortgage note to the payee bank and the plaintiff as endorser paid the balance due thereon he was entitled to reimbursement from the defendant and as equitable mortgagee had the right to replevy and sell the property to receive full payment. Although the chattel mortgage was signed as discharged by the bank upon receiving the balance due on the note from the endorser there was no intent to separate the security from the debt so far as the rights between the endorser and maker were concerned and in the absence of innocent third party intervention the endorser was entitled to the security. The fact that the mortgaged property was sold by the equitable mortgagee without notice as required by statute (R.L., c. 262, ss. 25-28) did not render the sale invalid as against the mortgagor nor was such mortgagee thereby barred from recovering all that was due him on the note less any damage to the mortgagor on account of the loss of his right of redemption.
ACTION, of assumpsit on a promissory note of $100 tried by the Court with an action of replevin. Verdict for the plaintiff for $73.50 in the action on the note and verdict for the plaintiff also in the replevin action. The defendant's motion to dismiss made in advance of trial was denied subject to exception as was his motion for a nonsuit at the close of the plaintiff's evidence. At the conclusion of the case, the defendant moved again for a dismissal which was denied subject to exception.
It appeared that the defendant, Agapit Jean, bought a television set from the plaintiff, Lawrence Caraway. The Exeter Banking Company took a chattel mortgage from the defendant on the set as security for two notes, one for $100 and the other for $150, given to secure the payment of the purchase price. Both notes were signed by the defendant as maker while the plaintiff wrote his signature on the back of the instruments just above the word "Endorsements." The defendant made two payments of $13.25 each and then stopped, so that the plaintiff paid the balance due of $234 including $10.50 interest to the bank which signed the mortgage as "discharged" and turned over the notes and mortgage to the plaintiff who replevied the set and sued on the $100 note. Other facts appear in the opinion. Transferred by Wheeler, J.
John A. Edgerly, Jr., for the plaintiff, filed no brief.
Russell H. McGuirk (by brief and orally), for the defendant.
It appears clear that the plaintiff, who testified without objection that "I guarantee the note," was an endorser on the two notes signed by the defendant and payable to the bank. R.L., c. 366, s. 17 VI. See also, id., s. 63; Trafton v. Garnsey, 78 N.H. 256, 260. It is too well established to require extended citation that having paid them, he is entitled to reimbursement from the defendant maker. 10 C.J.S., Bills and Notes, s. 221. He is also the possessor of the title to the notes formerly held by the bank through the transfer to him by it for value (R.L., c. 366, s. 49) and has all the rights against the defendant which the bank possessed (id., s. 58), including the right to sue in his own name. Clark v. Wheeler, 81 N.H. 34, 40, 41. In addition to this, the transfer of the debt to the plaintiff carried with it as an incident the bank's interest in the mortgaged television set. Cutting v. Whittemore, 72 N.H. 107, 110, 111. Although the mortgage had been signed as discharged by the bank, it seems to us the circumstances negative any intent of the parties to so separate the security from the debt so far as the rights between the plaintiff and defendant are concerned. No innocent third parties have intervened and, as between the plaintiff and defendant, unquestionably the former is entitled equitably to this security. International Trust Co. v. Company, 70 N.H. 118. We believe the transfer from the bank to the plaintiff of the debt must be deemed equitably to have carried with it the security of the mortgage. Esty Green v. Graham, 46 N.H. 169, 170. Under the circumstances the equitable mortgagee had a right to replevy and sell the property and pay himself in full. Leach v. Kimball, 34 N.H. 568; Mercier v. Company, 84 N.H. 59. The fact that the sale was not pursuant to notice as required (R.L., c. 262, ss. 25-28) does not make it invalid as against the defendant nor deprive the plaintiff of his right to recover all that was due him less any damage done to the defendant on account of the loss of his right of redemption. Leach v. Kimball, supra. "Resort to repossession and suit for the price should not bar each other, and the remedies may well and properly be concurrent to the point of satisfaction." Mercier v. Company, supra, 62. The record shows that the plaintiff as an endorser paid to the bank $234, including $10.50 interest. He has received a verdict for $73.50 on the $100 note and has sold the television set for "roughly over two hundred dollars" including a new aerial which furnished and installed was worth about $65. He therefore stands to receive from the sale and verdict something over $200 as against the debt due him of $234. There is no evidence to show that any damage allowed the defendant because of the loss of his right of redemption due to the lack of a statutory sale exceeded the difference between these figures. It follows there must be
Judgment on the verdicts.
All concurred.