A mortgage conditioned to secure two notes of $1000 each, a part of the consideration of which is a credit of an agreed sum by the mortgagee, on his books, to the mortgagor, is not prohibited by Gen. St., c. 122, s. 3.
BINGHAM, J.
A mortgage of real estate made to secure an existing debt is valid, pro tanto, although it was also made to secure future advances, as to which it is void, under Gen. St., c. 122, s. 3; Johnson v. Richardson, 38 N.H. 353, 355.
The debt or obligation must be in existence at the time the mortgage takes effect, as a conveyance and security, to avoid the statute. Richards v. Railroad, 44 N.H. 127; Weed v. Barker, 35 N.H. 386.
A large part of the debt secured by the defendant's mortgage existed at its date, beyond doubt; and the only question is, whether it is a valid security for the $506.71 that the credit given the defendant on Morton's book exceeded the sum then due Morton on the same. We think that the effect of the transaction was, that Morton became liable to account to the defendant for the excess of the credit. Morton had entered it on his book, and given a statement to the defendant that showed that he had paid Morton for doing so by including it in the mortgage notes. It was a promise for a promise. When the mortgage was executed, the defendant had the legal right to have the credit stand on Morton's book till he had duly cancelled it. It was for this undertaking of his for the defendant that he, in part, gave Morton the notes and mortgage. They were valid securities Stearns v. Bennett, 48 N.H. 400; Story on Prom. Notes, s. 186.
Judgment on the verdict
CLARK, J., did not sit.