Levy v. Haake

By the Court, McKinstry, J.: In March, 1868, Haake and wife conveyed certain real estate, called in the record the “•homestead,” to Burr and Dean, trustees, to secure defendant, the Savings and Loan Society, the payment of his promissory note for .two thousand five hundred dollars, and all further indebtedness of said Haake to the Society during the continuance of the trust, not exceeding four thousand dollars. In April, 1870, Haake and wife mortgaged the same premises to plaintiff, to secure the sum of four thous- and dollars then loaned by plaintiff to them. When plaintiff was about to advance his four thousand dollars to Haake, he inquired of Burr and of the Society how much indebtedness of the said Haake to the Society was secured by the deed of trust, but Burr and the Society refused to give any information in that behalf. Haake informed plaintiff that there was no other indebtedness so secured except upon the said promissory note of two thousand five hundred dollars, and that there was then only one thousand four hundred dollars due on said note. Plaintiff had no notice or information to the contrary. On the 10th day of ¡November, A. D. 1871, the plaintiff tendered to Burr and the Society the sum of two thousand dollars in payment of what was then unpaid, secured by the deed of trust; but they refused to accept the same, and alleged that other moneys were due and secured. ¡No other moneys, except the said two thous- and dollars, were in fact due and secured as aforesaid. On the 14th of February, 1871, Haake was adjudged a bankrupt by the District Court of the United States. The Savings and Loan Society proved its claim and also another claim, secured in like manner upon another lot, against the bankrupt’s estate— the two amounting in the aggregate to thirteen thousand six [271]hundred and twenty-eight dollars, of which ten thousand seven hundred and eighty-one dollars were secured on the real estate above mentioned, and the whole sum on another tract known as the Steuart Street lot; and afterwards made application to the said District Court to be allowed to proceed under the deeds of trust to make sale of the two tracts of land. The District Court, upon a hearing of said application, made the following order: “ Ordered and decreed that the said Savings and Loan Society have leave to proceed with a sale in accordance with said deeds of trust; that the said lot of land on Steuart Street be first sold, and the proceeds applied to the payment of the indebtedness aforesaid; and that after such sale and the appropriation of the proceeds, the said homestead lot be then sold, and that the proceeds of the sale of said homestead lot, after payment of the sum of two thousand dollars tendered by Levy [the plaintiff] to said Society, abide the further order of the said District Court, to be made upon hearing between the said Levy [plaintiff] and the said Society.”