133 Ga. 755 | Ga. | 1910
On May 2, 1904, B. F. Manning, trustee, borrowed from tbe Third National Bank of Albany $500, for which he gave his note due November 1, 1904, with two indorsers, secured by a mortgage upon his crops of cotton. This mortgage was duly recorded. On June 15, 1904, B. F. Manning, trustee, executed a mortgage upon the same property to Sam Farkas to secure a note of $528, which was duly recorded. On November 1, 1904, Manning gave to the bank his note for $397.25, due four months after date, and deposited, as collateral security therefor, warehouseman’s certificates for nine bales of cotton, which were embraced in the lien of the mortgage, and paid in money the difference between the amount named in the new note and the note secured by mortgage; whereupon the officer of the bank indorsed upon the mortgage the words: "Satisfied. Third National Bank of Albany. November 1st, 1904. N. R. Dehon, Teller,” and delivered to Manning the mortgage and note. Manning then caused the entry of satisfaction to be made upon the records of the court. Afterwards Sam Farkas
If the new security which the bank accepted had been a mortgage instead of a pledge of the warehouse receipts, the case would be free from difficulty. The rule in such case has been well put by McClellan, J., in New England Mortgage Security Company v. Hirsch, 96 Ala. 232 (11 So. 63). Said he: “While it is the law that the mere taking of a new note and mortgage, the debt evidenced by the former and the property embraced in the latter being the same, will not discharge or displace the lien of an existing mortgage, it is equally well-settled law that where the new transaction involves the payment and satisfaction of the first mortgage, the mortgagee’s rights are dominated by the intervening liens of third persons, liens acquired subsequently to the execution of the first, and prior to the execution of the second, mortgage.” Jones on Chattel Mortgages, §§644, 645; Walters v. Walters, 73 Ind. 425. The authorities uniformly hold that whether the taking of the second mortgage amounts to an extinguishment of the first mortgage is one of intention between the parties. It appears from the record in the present case that the cashier of the bank demanded of the mortgagor that he pay the difference between the estimated value of the 9 bales of cotton and the amount of the mortgage, before the bank would cancel and surrender its mortgage. The mort
It is further contended, notwithstanding the parties canceled the mortgage, that still, under the facts of the case, the bank was equitably entitled to so much of the proceeds of the cotton as might be sufficient to pay the amount of the new note. It is argued, that
Judgment reversed.