Humphreys v. Morton

Citations

• 100 Ill. 592
• 1881 Ill. LEXIS 150

Syllabus

<p>1. Mortgage—priority of debts first maturing. Where several notes, payable at different dates, are secured by a mortgage, the notes, in the absence of any special provision in the mortgage to the contrary, are entitled to payment from the proceeds of the mortgaged property in the order of their maturity.</p> <p>2. But when a deed of trust is given to secure bonds all maturing at the same time, with semi-annual interest coupons thereto attached, and authorizes no sale for the interest alone, but provides that for a default in the payment of interest for the space of six months all the bonds shall become due, and thereupon the trustees shall take possession and sell, and from the proceeds, etc., pay all such bonds, or so many as may be outstanding, showing an intention that no sale shall be made except for the whole debt, this rule of priority does not apply, and the holders of bonds upon which the interest has not been paid will have no priority as to the payment of such interest ovjr others upon whose bonds the interest has been paid.</p> <p>3. Where the holders of bonds secured by deed of trust upon a railroad and its property, in placing a portion of such bonds upon the market, and their agent in selling the same, have not made any representations, or by their conduct done anything which would be likely to deceive or defraud the persons purchasing bonds of them, they will not be postponed in the payment of the interest on their remaining bonds'until the payment in full of the bonds sold by them; nor will they be so postponed from a neglect to inform such purchasers of the fact that the mortgagor had failed to keep the interest paid on they; bonds.</p> <p>4. Interest—when allowed on interest coupons. Interest is properly allowed upon an interest coupon attached to a bond, from and after its maturity, although no such interest is promised in the same.</p>