7 Wash. 261 | Wash. | 1893
The opinion of the court was delivered by
On December 31, 1891, Andrews made his two promissory notes payable to E. C. Finch, numbered 1 and 2. No. 1 was payable six months from date, and No. 2 was payable nine months from date. At the time of the execution of the notes, Andrews made and delivered to Finch a mortgage on real estate, to secure the payment of both of said notes. On said day- Finch sold note No. 1 to the First National Bank of Aberdeen, and guaranteed the payment thereof. No assignment of any part of the mortgage was made to the bank, nor was the mortgage delivered to it. The mortgage was recorded by Finch on March 28, 1892, in the proper office of record. On April 9, 1892, Finch sold note No. 2 to Alexander Young, and endorsed it without recourse on him, but at the same time he made and delivered a written assignment to so much of said mortgage as secured the payment of note
There are two questions of law involved in this case: First, The question of authority on the part of the national bank to take a mortgage on real estate to secure payment of a loan where a debt had not been previously contracted. Second, The question of priority, where the holder of two promissory notes, coming due at different times, secured by mortgage, parts with their ownership to different persons at different times; and the sum realized from the sale of the mortgaged premises proves insufficient to pay the notes in full.
The first question involves the determination of the scope and extent of the prohibition imposed upon national banks by §§ 5136-37 of the Revised Statutes of the United States, which provides, in substance, that a national bank may loan money on personal security, and that it may purchase, hold and convey real estate for the following purposes, and no other:
‘•'■First: Such as shall be necessary for its immediate accommodation in the transaction of its business.
'■'■Second: Such as shall be mortgaged to it in good faith by way of security for debts previously contracted.
'■'■■Third: Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings.
Fourth: Such as it shall purchase at sales under judgments, decrees or mortgages held by the association, or shall purchase to secure debts due to it. ’ ’
Upon the construction of this statute the courts of the different states are divided; but the supreme court of the United States has uniformly held that a distinction can be
On the question of priority of the assignees, an investigation of the authorities in this opinion would be profitless, for the rules announced by the courts are absolutely at variance and cannot be reconciled. There are, however, two general rules promulgated by the courts. The one established in a large number of states is, that where the notes are made payable at different dates and are assigned by the mortgagee, either with or without an accompanying assignment of the mortgage, the holder of the first note coming due has a prior right to the proceeds of the mort
Miller v. Washington Savings Bank, decided by this court and reported in 5 Wash. 200 (31 Pac. Rep. 712), is cited by the respondent in favor of his contention; but an examination of this case shows that the court did not attempt to announce any general rule on the • question involved in this case. That decision, in fact, goes further against the position of respondent in this case than we find it necessary to go, as it was there decided that the priority was in favor of the note last maturing. However, nó rule was established, as it was decided squarely upon the particular circumstances of the case.
With this view of the law, the judgment will be reversed, and the cause remanded with instructions to ascertain the amounts due on the respective notes, and order a pro rata
Anders, Hoyt, Scott and Stiles, JJ., concur.