Herndon v. Hurter and Conant-Argument of Counsel. Paran Moody, the original mortgagee. The mortgage was dated October 6, A. D. 1876, was upon mill property, machinery and tools and some land of the Michigan Lumber Company. The bill was filed on the 18th of May, A. D. 1877. On the 14th of July, 1877, plaintiffs obtained final decree pro confesso of foreclosure for the sum of $2,332.29, and for costs of suit to be taxed. The decree directed sale of the land, and in case of sale that the costs of the officers be first paid out of the proceeds of sale; that an attorney's fee of $150 be paid, and that the balance, so far as necessary, be applied to the mortgage debt. On the 8th of February, A. D. 1878, upon the application of Hurter & Co., W. C. Herndon, the master in chancery in the cause, was directed to take charge of the saw-mill and the machinery and tools thereto belonging, and to keep and preserve the same until the decree was carried out, or until the further order of the court. The petition upon which the court made this order was filed February 8, 1878. Complainant therein alleged abandonment of the property by D. S. Colby, the agent of the Michigan Lumber Company, theft of a portion of the property, and other circumstances showing the necessity for the court to take possession thereof. The complainant admitted in the petition payment of $886.13 by D. S. Colby, agent, and alleged neglect and refusal upon the part of the agent to pay the balance due alleged to be about $1.700, and the costs and expenses. The next order we find in this case is made on the first of July, A. D. 1878. It is "that the sale in this cause be stayed until the further order of this court upon condition that P. B. Canova file a good and sufficient bond in the clerk's office of Baker county in the sum of $600, conditioned to indemnify William Hurter & Co., for all costs and damages which may be done said Hurter & Co., should this order have been improperly asked by said Canova.” Herndon v. Hurter and Conant-Argument of Counsel. These are all of the papers contained in this record entitled in the case of Hurter & Co. vs. The Michigan Lumber Company. On the 30th of March, 1878, which date it is perceived is before the order of the 1st of July, 1878, in the Hurter & Co. case, staying the sale in that case and subsequent to the order of February 8, 1878, in the Hurter & Co. case, directing W. C. Herndon, the appellant here to take possession of the property, Paul B. Canova filed an original bill against the Michigan Lumber Company, and against D. S. Colby, its President and Secretary, and against William Hurter and Sherman Conant, partners under the name of Hurter & Co., and against W. C. Herndon, the master in possession of the property under the order in the Hurter & Co. case. The bill was to foreclose a mortgage of the Michigan Lumber Company to Paul B. Canova, dated the 1st day of May, A. D. 1877, to secure the sum of $1,098.85. This mortgage was upon the mill and machinery covered by the prior mortgage of the Michigan Lumber Company to Hurter & Co. In addition to the usual allegations in a foreclosure suit against the mortgagor, and as against Hurter & Co., the plaintiff alleged that Hurter & Co. claimed to have some interest in the mortgaged premises, the precise nature: and amount of which was to plaintiff unknown; that the: Michigan Lumber Company had nearly discharged and paid the indebtedness secured by the mortgage which they had held against the Michigan Lumber Company, referring to the affidavits of Paran Moody and Paul B. Canova exhibits to the bill as proof of this fact. Plaintiff alleged further that notwithstanding said indebtedness to Hurter& Co. had been nearly paid, the said Hurter & Co. had proceeded to foreclose their mortgage against the said Michigan Lumber Company, and had obtained a decree for the full amount of their indebtedness, and had caused W. C. Herndon v. Hurter and Conant-Argument of Counsel. Herndon to advertise the mortgaged premises to be sold for the full sum of their indebtedness on the first Monday in April, A. D. 1878, which sale was and is restrained by an order of your honorable court. Plaintiff alleges that the President and Secretary of the Michigan Lumber Company, D. S. Colby, has "absconded from the State," and that he knows of no authorized agent of the company in the State; that his security is diminishing, and other allegations, asking that a receiver be appointed to take charge of the property. Plaintiff prays that an account may be taken of the mortgage debt; that the defendants, Hurter & Co., be required to disclose all payments made to them on account of their mortgage debt and sale of the mortgaged premises, the proceeds to be applied, first, to what may be found due William Hurter & Co., next, the costs of suit, including counsel fees of plaintiff, the balance to be paid to plaintiff to the extent of his mortgage debt. Plaintiff prays also for an injunction restraining sale of the mortgaged premises until the further order of the court. Paran Moody, whose affidavit is an exhibit to the bill, swears that he knows of his own knowledge the fact that D. S. Colby, the President and Secretary of the Michigan Lumber Company, did, prior to the 13th day of October, A. D. 1877, pay to Hurter & Co. the full amount of the decree of H. & Co. against the Michigan Lumber Company of July, 1877, excepting the sum of $500; that he (Moody) learned from Hurter himself and from Colby that Colby came to the said Hurter to pay him the balance of five hundred dollars, but that Colby owed said Hurter & Co. $400 for a bill of goods, which said Colby wished to pay and leave the balance of $500 due on the decree, but that Hurter was not willing to do this; that Hurter at that time said to him (Moody) that $500 was all that was then Herndon v. Hurter and Conant-Argument of Counsel. due on the final decree of Hurter & Co., and that he (Moody) knew this to be the fact at that time; that Colby wished him (Moody) to see if he could not persuade Hurter & Co. to let the $500 which he had then ready to pay go towards the said account for goods instead of the final payment of the mortgage decree; that he (Moody) did call on the said Hurter & Co. and prevailed upon them to do this; that afterwards, about the first of February, A. D. 1878, the said Colby informed the said Moody that he (Colby) was going to pay up the balance due under the said decree of foreclosure; that he (Colby) had received a check for that purpose, payable to the of William Hurter; that the said check was from the east; that the said Colby told him (the said Moody) that he was going to see if Hurter & Co. would permit him to have back the said check, or the amount thereof, so that he could pay off a balance he then owed to Eppinger & Russell, and that he (Moody) afterwards learned from Hurter that he had done so; that Hurter told him that Hurter and Company had got back fromColby the receipts which Hurter & Co. had given to Colby for the payments which had been made upon the decree: that Hurter said that he had offered Colby if he would give back these receipts for payments made on the mortgage Hurter and Company would give him the check that had been received from the east for the purpose of paying the balance of the mortgage, and would give him $500. which the said Colby also required to pay up Eppinger & Russell that afterwards Colby told him that Hurter had consented to let him have the $500, and that Hurter was going to let him have the said $500 in addition, and that for this $500 in cash and the $500 check, Colby gave up all the receipts which Hurter had personally given to Colby for the payments the said Michigan Lumber Company had made on the said mortgage decree. Herndon v. Hurter and Conant-Argument of Counsel. On the 20th of May, 1878, plaintiff, Paul B. Canova. amended his bill alleging that a few days after the property described in complainant's bill was advertised for sale he, through J. W. Howell, tendered to William Hurter, of the firm of Hurter & Co., the full amount due them upon their decree against the Michigan Lumber Company, and that he subsequently, in person, made a tender of the full amount claimed as due by William Hurter & Co. to William Hurter, and that William Hurter said he would not accept the money, and would not surrender to him the mortgage or the decree which William Hurter & Co. had against the Michigan Lumber Company; that he demanded at the time of the tender that he (Canova) should be subrogated to all the rights of William Hurter and Company in their decree. Plaintiff alleged further that William Hurter had told him more than once that D. S. Colby had fully liquidated all the indebtedness due said Hurter & Co. upon the mortgage held by Hurter and Company against the Michigan Lumber Company. Plaintiff prays that the said Hurter & Co. "be barred and estopped from receiving any interest or any remuneration whatever as far as the rights and equities of complainant is concerned after said tender was made." On the 20th day of May, 1879, counsel for complainant and defendants appearing, the court made an order "that the complainant have a decree in accordance with the prayer of his bill; that the expenses attending the appointment of a receiver be taxed against William Hurter and Company," and that the papers be referred to the special master to ascertain and report to the court the amount due complainant. This order contained a recital of a hearing upon the bill of complaint and the evidence submitted in the master's report. The order recited further that it appeared that the Michigan Lumber Company was justly |