Kalkaska County State & Savings Bank v. Kalkaska Canning Co.

(after stating the facts). Defendant contends that the $8,000 realized upon the foreclosure sale should be applied in general reduction of the debt decreed in the mortgage decree, and not be applied in full satisfaction of the payment of the two unindorsed notes. He insists that there is no allegation in the petition of any special agreement on the part of defendant Lewis to waive his right to participate in the benefits of the mortgage. Counsel for each party have argued in their briefs very fully the doctrine of the application of payments. In the view we take of the case, that question is not now before us.

Counsel for defendant admits that, if the petition alleges that defendant Lewis participated in such an agreement, “ there would have been no grounds of demurrer to it.” The petition fully and specifically alleges that this note was indorsed by all the directors, with the understanding, intention, and agreement that the proceeds of the foreclosure sale should be applied as they were applied, and *707that the directors should be held upon the note which they indorsed for the deficiency. This allegation includes the defendant. Sis of the directors so construed their understanding and agreement, and have paid.- It would be too technical a rule of pleading to say that the pleading should select the defendant, and allege a specific understanding, intention, and agreement upon his part, when the allegation includes him in the statement as to all. The allegation was sufficient to require an answer and proofs, if the defendant desired. We must not be understood as concurring in the correctness of the order of the court in dismissing the suit at law because leave of the court of chancery had not been obtained. The indorsers were not made parties to the bill of complaint, and it is not claimed that they were necessary parties. They were liable simply as indorsers upon one of the three notes secured by the mortgage. It is not clear that leave of the chancery court was necessary. Complainant, however, rather than appeal from the judgment of the law court, wisely chose to acquiesce in the position taken by defendant Lewis and the finding of the court therein, and filed its petition for leave.

The decree is reversed, with the costs of both courts, and the record remanded for further proceedings.