65 Neb. 291 | Neb. | 1902
Lead Opinion
This action was begun in the district court of Dawson county to foreclose a real estate mortgage. There was a decree foreclosing the mortgage, and the defendant has appealed.
The note and mortgage were executed by the defendant Thomas E. Moore and wife to the Globe Investment Company. The defendant Bank of Miller afterwards bought the mortgaged property subject to the mortgage, and now defends in this case. Soon after the note and mortgage were executed and delivered the payee, the Globe Investment Company, sold the papers to parties who afterwards, and before the note became due, sold and assigned them to the plaintiff. Afterwards the defendant bank paid the mortgage note in full to the original payee, the Globe
The first contention is that the plaintiff is not entitled to protection as an innocent bona-fide indorsee under this indorsement. This contention can not be sustained. A blank indorsement, until it is filled up and made special, is equivalent to a bill of exchange payable to' bearer. Everett v. Tidball, 34 Nebr., 803, 806; 2 Randolph, Commercial Paper [2d ed.], 705, and cases cited. The holder may, at his option, complete the indorsement by inserting the name of the indorsee; and this he can do either before or after he begins suit thereon. Evans v Gee, 11 Pet. [U. S.], 80, 9 Law. Ed., 639; Maxwell v. Vansant, 46 Ill., 58; 1 Randolph, Commercial Paper, 181. The holder, in filling the indorsement, may write any words over the name of the indorser which do not enlarge his liability as indorser. To fill the blank with the name of the indorsee would restrict the present indorsement, and is not necessary to the negotiability of the note.
The case of Gaylord v. Nebraska Savings & Exchange Bank,
2. It is also contended that the evidence establishes that the Globe Investment Company, at the time the defendant bank paid the money, “was agent for the plaintiff to collect and receive the money.” The defendant, having paid the money to one who did not and could not produce the note, he has thereby assumed the burden of showing that the party to whom he paid the money was the OAvner of the paper, or the authorized agent of the owner to receive the money for him. The payee, the Globe Investment Company, sold the paper to John Stuart & Company, Limited, of England, avIio in turn sold it to this plaintiff. There is considerable evidence in the record in regard to the business relations of the Globe Investment Company and John Stuart & Company, Limited, and of the course of business between them, and it is earnestly insisted that the Globe Investment Company Avas the agent of John Stuart & Company in the collection of its loans in general, and particularly in relation to the loan in question; and it is shoAvn that John Stuart & Company, several months before this paper became due, instructed the Globe Investment Company to make collection of the paper; but it is not necessary to determine the legal effect of the relations existing betAA'een these two companies, Avhich was the controlling consideration in Stuart v. Stonebraker, 63 Nebr., 554. The evidence is not contra-
8. The appellant in his brief urges that the note was not negotiable because of agreements contained in the mortgage that the maker should pay insurance premiums and taxes on the mortgaged premises, and that if the -maker failed to pay in accordance with the terms of the paper, the mortgagee or its assigns might declare the whole debt due and payable at once, or might elect to pay the taxes and insurance, and even, in such case, might declare the whole debt due.
The note and mortgage, having been executed at the same time, and having been transferred together, they must be construed together, and the provisions of the mortgage relating to the indebtedness itself would have the same effect as though they were incorporated in the note; but the provisions referred to relate only to the security, which is collateral to the indebtedness, and such provisions do not affect the negotiability of the note. There is no agreement to pay the taxes that might be assessed upon the indebtedness itself, nor any other provision which would render the amount of the indebtedness or the time of payment uncertain within the rule adopted by this court. In Stark v. Olsen, 44 Nebr., 646, it was held that neither the provision to pay attorney’s fee, nor that
The decree of the district court is
Affirmed.
69 Am. St. Hep., 705.
Rehearing
After the decision of Garnett v. Meyers, ante, page 287, a rehearing was granted in this case, and in others involving the same questions. Upon this hearing the plaintiff’s attorney has furnished us an able and exhaustive argument upon the questions involved, which has been of great assistance to us. Questions involving the negotiability of notes secured by mortgages and other collaterals have frequently been considered by this court As early as 1876 it was determined in Webb v. Hoselton, 4 Nebr., 308, that “A bona-fide purchaser, for value, of a negotiable promissory note, secured by mortgage, before maturity and
2. That the note and mortgage, when executed and delivered together as one transaction, will be construed together, is not a new doctrine in this state. Grand Island Savings & Loan Ass’n v. Moore, 40 Nebr., 686, and Seieroe v. First Nat. Bank of Kearney,50 Nebr., 612, were cited as establishing the proposition as the doctrine of this court. In the former case there is a somewhat extensive discussion of the question, and the conclusion is that the provision in the mortgage that “if the mortgagors should fail to pay the money when due * * * the plaintiff might elect to pay the same and declare the whole amount due and payable at once” gave the holder of the papers the right upon such failure “to elect to declare the whole debt due, not only for the purpose of foreclosing, but also for the purpose of enforcing the personal liability.” The conclusion is fortified by the consideration and discussion of authorities from this and other courts, and is considered as settling the law of this state upon that question. In the course of the opinion it is said: “The writer was at first of the impression that where the note is absolute and the mortgage contains such a provision, the provision should be restricted to the remedy by foreclosure, rendering the debt due for the purpose of foreclosure only, but leaving the maturity of the debt for the purpose of enforcing the
3. The note and mortgage, together with an assignment pf the mortgage, were sold and delivered to the plaintiff. It is idle to argue that under such circumstances the plaintiff was not bound to take notice of the provisions of the papers which he purchased.
1. The provision of the mortgage which was held to affect the negotiability o>f the note is copied in full in the first opinion in Garnett v. Meyers, ante, page 280. The note and mortgage in this case were identical in their provisions with the papers involved in Garnett v. Meyers. Upon this hearing it was strenuously contended, and is ably and exhaustively argued in the brief, that these provisions were not intended to and did not affect the indebtedness itself, but relate only to the security, and ought not, therefore, to render the note non-negotiable.
The question thus presented is not free from difficulty, but we are inclined to adhere to the construction placed upon these provisions upon the second hearing of Garnett v. Meyers. After fully providing for the protection of the securities, other conditions are inserted which seem to have no meaning, unless they are construed to protect the holder of the securities against taxes that may be imposed upon these securities. If this is their meaning and intention, there can be no doubt that such conditions render the amount that the mortgagor may be compelled to pay upon the indebtedness, as a part thereof, uncertain; which would clearly render the paper non-negotiable. Tbe papers being non-negotiable, payment to the original payee without notice to the payor of any transfer of the papers; will discharge the paper.
The brief, and argument of appellant are. fflostly em
The judgment heretofore rendered is vacated, the judgment of the district court is reversed, and the cause remanded with instructions to dismiss, the case.
Reversed and remanded.