56 Neb. 565 | Neb. | 1898
This was an action by Gadsden to foreclose a mortgage made to him by George Thrush and wife. No controversy exists between the parties named. Certain other parties claimed liens on the mortgaged premises. The decree established a first lien in favor of the First National Bank of Schuyler, .a second in favor of the Sc'huyler National Bank, a third in favor of the Nebraska State Bank, and-a fourth in favor of the plaintiff. The plaintiff and Thrush appeal; the plaintiff because the court awarded the First National Bank priority over him, and Thrush complaining against the allowance of any lien to the First National Bank, and also because, on a plea of usury by him interposed against the claim of the Schuyler National Bank, the court declined to permit the remedy afforded by the state law, but allowed the principal of the debt with a forfeiture only of unpaid interest.
We shall first consider the case as regards the First National Bank. The lien awarded that bank as a senior lien arose out of a mortgage executed to J. C. Noyes. Noyes does not seem to have been originally a party, but filed- an answer and a cross-petition, or such were filed on his behalf. Thereafter an order was made substituting the First National Bank for Noyes as a defendant, and no exception was taken to that order. The bank alleged the making and delivery to Noyes of the mortgage and notes secured thereby, and then pleaded an assignment of the notes and mortgage to the bank. To its cross-petition alleging such facts Thrush made no answer, and so confessed the same. His appeal on this branch is disposed of by that fact. After, by suffering default, confessing the facts pleaded, he cannot take advantage of the proof made by other parties in support of issues by them joined.
The plaintiff answered the cross-petition, among other things denying the averments of an assignment to the
We now come to the lien of the Schuyler National Bank. Thrush was largely- indebted to that bank. He obtained a further loan and executed to the bank a note for $5,000 to represent the consolidated indebtedness. At the same time there was made a note for a like amount to William H. Sumner and a mortgage to Sumner to secure the latter note. Sumner was an officer of the bank. He had no individual dealings with “Thrush and the sole purpose of the note and mortgage to him was to secure the debt to the bank. Certain payments were made on
The inference from the direct testimony and from the circumstances is that if the -object of procuring the note and mortgage to be executed to, Sumner was not to evade the penalties of the act of congress with respect to usury, it was to evade the inhibition against the taking by a national bank of real estate security for loans made at the time. Whether that inhibition applies to .a case where a portion -of the debt was pre-existent we need not inquire, because it is now settled that a violation of that enactment does not afford the debtor any ground of relief; the government alone may complain. Still, whichever motive influenced the bank, the object was to evade
The decree of the district court is reversed and the cause remanded with directions to ascertain the amount of money advanced to Thrush by the Schuyler National Bank, deduct therefrom all payments, whether of principal or interest, and award foreclosure for the remainder, if any; to postpone the lien of the First National Bank to that of the plaintiff, and for such further proceedings as may be necessary and not inconsistent with this opinion.
Reversed and remanded.