65 Neb. 280 | Neb. | 1902
Lead Opinion
This action was brought to foreclose a real estate mortgage. The trial court found for the defendants, and entered a decree accordingly. The plaintiff brings the record here on appeal.
It is conclusively established by the evidence that on the 31st day of July, 1889, the defendants Meyers and wife executed and delivered to the Globe Investment Company their note for $550 and the mortgage sought to be foreclosed to secure the payment of said note; that on the 19th day of September, 1889, the Globe Investment Company indorsed the note in blank, executed an assignment in blank of the mortgage, and for a valuable consideration, and in the usual course of business, sold said note and mortgage, and delivered the same, with said assignment, to John Stuart & Co., who afterwards, in the same year, without further indorsement or assignment in writing, in
It is insisted that the contract upon which this action was brought is not negotiable, and that, as the mortgagor had no notice of the assignment, payment to the original mortgagee is a satisfaction of the claim. The note, otherwise in the usual form of a promissory note, has the following memorandum upon its face: “This note is.secured by a first mortgage on the N. W. I sec. 7, tp. 23, R. 6 west, 6th P. M., Antelope county, Nebraska.” And the mortgage contains, among other things, the following provision: “The said parties of the first part hereby agree to pay all the taxes and assessments levied upon the said premises and all taxes and assessments levied upon the holder of this mortgage for and on account of the same * * * when the same are respectively due; and if not so paid, the said party of the second part, or the legal holder or holders of said note may, without further notice declare the whole debt hereby secured due and payable at once, or may elect to pay such taxes, assessments * * * and the amount so paid shall be secured by this mortgage and may be collected in the same manner as the principal debt hereby secured, with interest at the rate of ten per cent per annum. But whether the legal holder or holders of said note elect to pay such taxes, assessments * * * or not, it is distinctly agreed that the legal holder or holders of said note may declare the debt thereby secured due and immediately cause this mortgage to be foreclosed.” These two instruments, having been executed at the same time
One of the essential elements of negotiable paper is certainty as to the amount to be paid. Daniel, Negotiable Instruments, sec. 53; Edwards, Bills & Notes, sec. 153; Story, Promissory Notes, sec. 20; Randolph, Commercial Paper, sec. 104. So strictly have the courts adhered to this rule that it has been held that a bill of exchange for the payment of a certain sum with exchange is not negotiable. Culbertson v. Nelson,
It. is insisted that the clause in question requires the maker of the note to pay all taxes that may be levied against the holder of the note on the credit represented by the note and mortgage. This indebtedness was to exist for five years from the date of the note. At the time it was made, no one could say with any degree of certainty how-much taxes would be assessed upon the credit represented thereby. Such uncertainty destroys the negotiability of the instrument. Walker v. Thompson, 66 N. W. Rep. [Mich,], 584; Brooke v. Struthers,
But the provision does not relate to the indebtedness. It is the agreement of the makers of the mortgage, and not of the maker of the note alone; and it is to pay “all taxes and assessments levied upon the holder of the mortgage for and on account of the same,” and not- upon the credit represented by the note. The evidence shows that the mortgagee was a Massachusetts corporation, and Avas
This, then, was a negotiable note, and payment to one who did not and could not produce the note, without proof that the party to whom payment was made was the owner of the paper, or the agent of the owner authorized to receive the money for him, is no defense against the note in the hands of an innocent purchaser.
The decree of the district court is reversed and the cause remanded, with directions to enter a decree of foreclosure as prayed.
Reversed and remanded.
27 L. R. A., 222, 57 Am. St. Rep., 266.
46 L. R. A., 702, 76 Am. St. Rep., 594.
35 L. K. A., 536.
Rehearing
In the former opinion in this case {ante, page 280) it was held that the provisions there quoted from the note and mortgage did not destroy the negotiability of the note. A rehearing was allowed mainly for the consideration of that question. The oral arguments on this hearing were largely devoted to two propositions:
1. Should the conditions of the mortgage as distinguished from those in the note itself be held to affect the negotiability of the note? Upon this question we are entirely satisfied with the views expressed in the former opinion. If the terms and conditions of the mortgage are limited to the proper province of the mortgage — that is, to provide security for the indebtedness — its provisions relating solely to the security will not affect the negotiability of the note. If the holder of the note is compelled to pay the taxes or insurance on the mortgaged property to protect the security, and is afterwards allowed to recover the amount so paid in addition to the principal indebtedness, this does not affect the amount of the indebtedness itself. The mortgagee has no interest in the mortgaged property except a collateral and contingent one. The liability for these expenses is upon the mortgagor. If he shirks this responsibility and comiséis the mortgagee to assume it, equity allows the mortgagee to add the payment so made to his mortgage. This right has long been established as an essential element of the mortgage itself. It can not he held to destroy the negotiability of the note, unless the fact that the execution of the note is accompanied by the execution of a.mortgage securing it is to have that effect. This principle applies to all agreements of the mortgagor to preserve the collateral security. It does not affect the rule that the two instruments when executed at the same time must he construed together. The provisions contained in the mortgage to protect the’ securities, which would be implied and enforced upon settled principles of equity whether expressed in the mortgage or not, can not
It is said by the plaintiff that there are two causes of action — “one at law upon the bond, seeking personal liability regardless of the lien; the other a proceeding to enforce the security regardless of the personal liability.” This is true, but in an action at lasv upon the note, and Avitbout seeking to enforce the security, the plaintiff no doubt might allege that in a writing executed with' the note, and as a part of the same transaction, it was agreed that the maker'of the note should pay taxes that might be assessed against the holder of the note by reason thereof, and that such taxes Avere assessed and had been paid by the note-holder; and there is no doubt that such taxes so paid might, in such an action, be included in the recovery. If such recoArery could be had Mhen the agreements to pav
2. Do the provisions of this mortgage relating' to the indebtedness itself render the amount that may be demanded thereon by the holder uncertain? Upon this hearing we have been assisted by a strong brief and able argument upon this question. We quote from the brief:
“It is said in the body of the opinion that tire provision was ‘plainly intended to meet the conditions which obtain in some jurisdictions, where the taxes chargeable against lands are assessed against both mortgagor and mortgagee in proportion to their several estates in the land.’ By what process of reasoning is this made so plainly to appear? The mortgagoi’s had already positively agreed in the following language: ‘The said parties of the first part hereby agree to pay all taxes and assessments levied upon said premises’ — meaning the real estate covered by the mortgage. Whis provision seems to be as broad as language can make it, and certainly would be construed to cover any part of the taxes against the real estate that the mortgagee might become liable for. All can not be construed to mean less than the vitóle. It ivould seem, then, to be the duty of the court to give some meaning and force to the further agreement to pay all taxes and assessments levied upon the holder of the mortgage for and on account of the same. It serms perfectly plain to the writer that the latter provision was intended to cover the tax for which the holder of the mortgage would thereafter become liable on account of the ownership of the credit represented by the mortgage and note.”
This reasoning seems to us to be sound. To construe the " provisions in question to mean that the mortgagor should pay all taxes levied on the premises including taxes charged against the holder of the mortgage on account of the mortgaged property, is not so obvious and natural as.
The former judgment of this court is vacated and the judgment of the district court
Affirmed.