55 Neb. 243 | Neb. | 1898
D. C. Main beld a contract with the state for the purchase of the northwest quarter of section 32, township 32 north, of range 3 west, in Knox county, said land being state educational land. He also held a number of leases of other educational land in the vicinity. In 1892 he entered into contracts with H. N. Miller, which had for their effect the transfer to Miller of Main’s rights to the land, payment of the consideration or a part thereof being deferred. The contract first referred to, and out of which this action arises, was assigned to Miller by a separate instrument. January 20, 1893, Miller made his note to the Bloomfield State Bank for $500, representing in part an overdraft and in part a loan made at that time by the bank to Miller. At the same time Miller wrote his name on the back of the assignment from Main to himself, and delivered the assignment in that condition to the bank, intending thereby to have it operate as security for the note. Prior thereto he had, by formal written assignments, transferred his rights to the other lands to French, to secure a debt he owed the latter. In April or May, 1893, finding that he would be unable to meet the payments to Main, Miller negotiated for the sale of his rights to Sexton, Comstock & Co. Sexton, Comstock & Co. not being prepared or not desiring to make immediate payment to Main, an arrangement was made among Miller, Main, French, and Sexton, Comstock & Co., evidenced by a preliminary memorandum agree
By comparing the statement of facts with the issues it will be seen that neither of the contesting parties succeeded in establishing the facts precisely as he pleaded them. The bant wholly failed to show that it had any authority to write the assignment over Miller’s signature, or that the signature was placed there for such a purpose. Even if there had been such authority, the assignment-was not written until after French’s rights had accrued in his ignorance of the bank’s. The bank therefore can claim nothing under the written assignment. On the other hand, French pleaded only an assignment from Main. Main had already assigned to Miller, so that under that pleading French could claim only a subrogation to Main’s right to the unpaid purchase-money, provided the bank had any right derived from Miller, although under the evidence French, or Sexton, Comstock & Co., whom he represented, was shown to have acquired Miller’s rights also. If the bank obtained no right, then it cannot complain of the decree between the other parties. If it did obtain any right from Miller, then the decree must at least be modified. The proof showing that the written assignment to the bank was unavailing, but also showing that the contract between Main and Miller was by the latter deposited with the bank with the clear intention on the part of both that it should stand as security for a debt in part then contracted, we have thus distinctly presented for the first time in this state the question whether the doctrine of an equitable mortgage by a deposit of title deeds is sound.
It is unnecessary to review the English cases. When the doctrine was there first announced it provoked much opposition, being justly considered a further invasion of the statute of frauds. Lord Eldon expressed his emphatic disapproval of it, but considered the rule too well fixed in his time to justify its overthrow. It must there
Again, in this state we have created by statute a system whereby conveyances, including mortgages, must be registered in a public office. The purpose of this system is to afford security to titles by a public record which parties dealing with land may, and for their own protection must, examine, and on which they may rely. Secret transfers and liens are sought thereby to be prevented. A mortgage by deposit of title deeds tends to defeat this purpose. The recording acts have another bearing on the question. In England title deeds followed the land. The evidence of title lay not only in the delivery of a deed, but in its continued possession by the grantee. When, therefore, the owner parted with his muniments of title he parted with the means of disposing of the land. When the deposit was by way of pledge, the pledgee, by his manual possession of the deeds, had the effective power to prevent an untoward disposition of the land, either such as would defraud him or such as would de
For the reasons above stated this court has held that the vendor of land, who delivers to his vendee a deed absolute, does not retain a lien thereon for the unpaid purchase-money. (Edminster v. Higgins, 6 Neb. 265; Ansley v. Pasahro, 22 Neb. 662.) In Folsom v. McCague, 29 Neb. 124, Judge Nokval, speaking of an assignment of a land contract where the place for the vendee’s name was left blank, said: “To make a valid assignment of these contracts, it was as necessary to have an assignee as it was the signature of the assignor. Until some one’s name was filled in these blanks as assignee the appellees appeared to be and were the real owners. * * * These assignments of the contracts in blank were in violation of the statute of frauds and void.” While none of these cases is decisive of that before us, they all recognize the principles already stated. We would, in the absence of authority elsewhere, say without hesitation that the doctrine of equitable mortgages by the deposit of title deeds, although a part of the law of England, is not here applicable, is contrary to our statutes, and was therefore not adopted by the legislature of the territory. This conclusion is reinforced by an examination of the decisions in other states, where by custom or by statute the common law has been acquired. For some or all of the reasons suggested the doctrine has been repudiated in the following cases: Probasco v. Johnson, 2 Disn. [O.] 96; Lehman v. Collins, 69 Ala. 127; Bowers v. Oyster, 3 P. & W. [Pa.] 239; Vanmeter v. McFaddin, 8 B. Mon. [Ky.] 435; Bicknell v. Bicknell, 31 Vt. 498; Meador v. Meador, 3 Heisk. [Tenn.) 562; Gothard v. Flynn, 25 Miss. 58.
In New Jersey a very peculiar thing has occurred. Griffin v. Griffin, 3 C. E. Green [N. J. Eq.] 104, was a bill to compel the defendant to surrender to plaintiff deeds to plaintiff’s ancestor of land in New York. It appeared that they had been deposited as security. The court, citing the New York cases we have mentioned, took them as indicating that such a deposit operated in New York, as a mortgage, and therefore very properly refused to de
Hackett v. Reynolds, 4 R. I. 512, enforces such a mortgage in a hard case, with the preliminary observation that the fraudulent design of the debtors was so transparent “that a court of equity would be disposed to find or to make a way to thwart them.” Prom a peculiarly apologetic tone in the opinion it is evident that the court realized that it was making a way.
Hutzler v. Phillips, 26 S. Car. 136, often cited as sustaining the rule, holds distinctly that the case was not within it. There was a dissent to the intimation that the rule might be in force.
The following eases, frequently cited, will be found on investigation to involve no such question, and the remarks of the judges on the subject either to be obiter or made for the purpose of excluding the question from the case: Mowry v. Wood, 12 Wis. 460; Jarvis v. Dutcher, 16 Wis. 326; Abbott v. Godfrey, 1 Mich. 179; Peckham v. Haddock, 36 Ill. 38; Roberts v. Richards, 36 Ill. 339; Carpenter v. Black Hawk Gold Mining Co., 65 N. Y. 43; Hall v. McDuff,. 24 Me. 311; Wright v. Troutman, 81 Ill. 374.
Williams v. Stratton, 10 S. & M. [Miss.] 418, says: “Such a mortgage is in direct opposition to the statute of frauds, in regard to which we have said that we will' create no exceptions not found in the statute.”
The case of First Nat. Bank v. Caldwell, 4 Dill. [U. S. C. C.] 314, is entitled to more than passing consideration, not only from the eminent ability of the judge who decided it, but as being a case from this federal district and to which the law of Nebraska was applicable. There certain railroad coupons were held as a pledge. They were exchangeable for land, and by arrangement of the debtor and creditor they were exchanged, land contracts being issued in the name of the debtor but delivered to the creditor. The court held that the pledgee had a lien superior to that of a judgment creditor. Judge Dillon, however, declined to pass on the question whether a lien could be created by the mere deposit of title deeds. The fact that there they stood in lieu of coupons held in perfect pledge was the controlling fact in his mind. Giving, however, due weight to his apparent opinion in favor of the English rule, we do not feel that we can adopt it in the face of what seems to us the overwhelming reason and weight of authority against it.
The plaintiff argues that so far as the reasons urged for denying the lien are founded on the statute of frauds they are of no force because our statute excepts from its operation estates arising by act or operation of law. This phrase occurs twice in the statute — once in section 3, already quoted, and again in section 4, with reference to trusts. (Compiled Statutes, ch. 32.) The phrase is
Finally, it is insisted that a court of equity will enforce the lien as the result of an imperfect attempt to
AFFIRMED.