Athol Savings Bank v. Pomroy

115 Mass. 573, 1874 Mass. LEXIS 257

Opinion

Devens, J.

It is agreed that there was no other consideration for the mortgage and mortgage note than a note of even date signed by Daniel Pomroy and indorsed by Cheney, which Cheney paid. The transaction cannot be treated as a loan of $2500 to the defendant and Daniel Pomroy, nor can the mortgage note be regarded, as contended by the plaintiff, as the principal debt secured by the mortgage, especially when it is observed that while the mortgage and mortgage note are signed by the defendant and Daniel Pomroy, the note to secure which they were given is made to and indorsed by Daniel Pomroy alone. The object of the transaction was simply to indemnify the mortgagee for the liability which he might incur by reason of signing certain accommodation notes, and the amount due is to be ascertained by determining how much he has been compelled to pay upon such notes, with legal interest from the date of such payment. It would hardly have been argued if the only note signed and paid by the mortgagee had been one of $1000 in amount, that judgment should have been rendered for the full amount of the mortgage note of $2500: the amount due would then have been $1000, with legal interest from the date of payment, and the same principle must be applied although the note signed by Cheney and the mortgage note were the same in amount. This was the rule adopted by the Superior Court.

Judgment affirmed.