Hutchins v. King

THIS was a writ of error to the Circuit Court for New Hampshire; the case being thus:

In September, 1853, Dunn and his partner having bought timber land in New Hampshire, of Goodall, mortgaged it back to him, as security for the payment of the purchasemoney; the purchasers having given their notes for the money; and the mortgage being intended to secure their payment. One of the notes was payable September 1st, 1854; another, September 1st, 1855; and a third, September 1st, 1856: all of them with interest from an anterior date, to wit, from June, 1853. The first note was paid at maturity, but the second was not paid until five months after maturity; while neither on it nor on the third note, was any interest paid until two years after it became due. It was then collected by process of law.

The mortgage contained a stipulation that the mortgagors might enter and cut timber to the value of ten hundred dollars, and afterwards as fast as they made the several payments designated in the mortgage, but if they failed to make any one of the payments designated, they were 'to cease cutting, and to yield possession' until the amount was paid; we to cut timber-was the language of one part of the mortgage-'as fast as we pay the notes, and no faster.' During the time that the mortgagors were thus in default by non-payment of the second note, and of interest on both it and the third, they entered and cut timber, and in June, 1856, sold it to one King. In September, 1856, two persons, named Hutchins and Woods, who had succeeded by assignment to the rights of Goodall, the mortgagee, took possession of the timber thus cut, sold it, and appropriated to themselves the proceeds; the sale of the timber by them being, as it appeared, after the unpaid interest had been collected.

In 1859, King, who had purchased from the mortgagors, brought an action on the case against Hutchins and Woods, to recover the value of the timber which they had thus taken possession of and sold. And among several questions raised on the trial was this-the only one considered by this court-whether the assignees of the mortgage, Hutchins and Woods, were liable to King, the vendee of the mortgagors, for the value of the timber which they had sold after they had received the principal and interest due to them.

The court below ruled that they were not; and the correctness of this ruling was the chief point now in issue here.

The record had no proper bill of exceptions. The bill, so called, gave the rulings of the court, but did not show that exceptions to these rulings were taken by either party. No objection was, however, made to the record on this ground by counsel on the argument; and the associate justice of this court who presided at the circuit where the cause was tried, informed the court that an exception to the ruling on the material point considered, had been in truth taken, and that the omission of the bill to state the fact was a clerical error.

Messrs. Hutchins and Carpenter for the plaintiff in error:

1. It will be admitted that a mortgagor has no right in general to cut timber from mortgaged premises; and if he does so he is liable to the mortgagee in trespass or trover. If he sells the timber so cut, his vendee is liable to the mortgagee in like manner. The mortgagee's rights in this respect are not affected by the fact that there has been no breach of the condition of the mortgage; for the mortgagee, as against the mortgagor, is the owner of the land, and indeed if there is no stipulation, either express or implied, to the contrary, he is entitled to the possession, and may sue for and recover it immediately upon the execution of the mortgage.

2. But this case has special strength. The stipulation contained in the mortgage gave the mortgagors a right to cut timber from the premises only as they paid the mortgage debt 'and no faster;' that is to say, until such time as they might fail to pay an instalment of principal or interest when due and payable, and no longer. Upon the happening of that event, i.e., a failure to pay, they were, by the terms of the deed, to 'cease cutting, and yield possession,' &c., until payment of another note.

The conclusion is unavoidable that the mortgagors had no right to cut timber from the mortgaged premises while in default either for principal or interest.

Moreover, when the timber was severed it became the personal property of the assignees of the mortgagee, as it was before their real property. It could no longer pass with the land, and was no longer covered by the mortgage. By a recovery of the land in a suit on the mortgage, the assignees would not have recovered the severed timber, nor could the mortgagors recover it or gain title to it by redemption of the mortgage and recovery of the land.

3. The reception by the mortgagees of the money due on the mortgage debt could not operate as a waiver of any right which had accrued to them through the default of the mortgagors. They were bound by law to receive, or suffer the loss of interest. Their right to collect and receive payment of the debt secured, was independent of their rights to the timber under the mortgage and had no connection with them.

Mr. Wells for the defendant in error.

Mr. Justice FIELD delivered the opinion of the court: