Hayden v. Speakman, 20 N.M. 513

Hayden v. Speakman

20 N.M. 513 | N.M. | 1914

Lead Opinion

OPINION OF THE COURT.

ABBOTT, District Judge

(after stating the facts as above.)' — The trial court found as a fact, among other findings:

“That John S. Hayden, the mortgagee named •in the $1,500 mortgage, entered into a verbal ■agreement relative to the releasing from the lien of said mortgage certain blocks in said addition to Clovis, covered by said mortgage, in case they were sold and pro rata payments made, as alleged in plaintiff’s complaint.”

There is substantial evidence disclosed in the record to support this finding of fact of the trial court, and this court will therefore not disturb'the same. Rush v. Fletcher, 11 N. M. 555, 70 Pac. 559.

This brings us to the question whether Hayden was acting as the agént of Babler in making the loan to High, and whether Babler is bound by the verbal agreement which the trial court found as a fact that the said Hayden entered into relative to releasing, from the lien of said mortgage, certain blocks in said addition to Clovis, cov: ered by said mortgage, in case they were sold and pro rata payments made, as alleged in plaintiff’s complaint; it having been also found by the trial court as a fact that pay^ ment of a sufficient sum was made on said mortgage um der said agreement with said Hayden to entit’e the plaintiff to the release of said block 22 from the lien uf said mortgage, which finding is also supported by substantial evidence in the record. In our opinion it is immaterial whether the said Hayden was acting as the agent of the said Babler with authority to enter into the verbal agreement aforesaid. It was admitted by the appellants, and found as a fact by the trial court, that the assignment of the said note and mortgage from High and wife to Hayden was not placed of record in the county of Curry, where the land affected thereby is situate.

[1] ' The appéllant Hayden took the mortgage from High and wife in his own name, and the same was recorded, and the appellee purchased block 22 from High and wife,, agreeing to pay $500 for the same, $300 in cash and $200 by deferred payments, with an agreement from High and wife and Hayden to receive, upon making the final payment, a wárranty deed for the same from High and wife and a release from Hayden from the mortgage, in whose- name the mortgage then stood of record. Speak-man had a right to believe that appellant Hayden was the owner of the said' mortgage, and that Hayden had authority-, to release the same upon receiving the amount necessary to release the same from the said mortgage. There was nothing upon record to disclose the fact that the appellant-Babler-was the owner of the note and mortgage given to • secure • the same, and he had a right to believe that Hayden was clothed with authority to receive -the final payment -and to release the said block 22. This question, in our opinion, is settled by the following sections of the 'registration laws of the state of New Mexico:

Section 3943, Compiled Laws:

“Every instrument in writing by which real estate is transferred, or affected, in law or equity, shall be acknowledged and certified to in the manner heréiháftér prescribed.”

Section 3953:

“All deeds, mortgages, United States patents and other writings affecting -the title to real - estate, shall be recorded -in the office of the probate clerk of the county or counties in which the real estate affected thereby is situated.”

.Section 3954:

“Such records shall be notice to all the world of the existence -and contents of the instruments so recorded from the time of recording.”

Section- 3955:

“From' and after, the first day ‘ of January, -1888, no deed, mortgage or other instrument in writing, not recorded in accordance with section 3953, shall affect the title or rights to, in any real estate, or any purchase or mortgage in good faith, without knowledge of the existence of such'unrecorded1 instrument.”

The record fails to show whether the alleged assignment of the said note and mortgage from Hayden- and Babler . was in writing, but this becomes immaterial, because the appellants’ case rests entirely upon a valid assignment of the mortgage from Hayden to Babler. A valid-assignment of the mortgage, so as to affect the rights of the purchaser Speakman, in good faith, could only be in writing. If the assignment was not in writing, and therefore not entitled to be placed of record, the appellee, Speakman, could purchase the said block and deal with the appellant Hayden as the owner of the mortgage. The obligation to record the assignment of the mortgage from Hayden to Babler, under section 3955, C. L. 1897, rested upon Babler in order to protect bis rights under his mortgage as against the purchaser Speakman.

In the case of Connecticut L. I. Co. v. Talbot, 113 Ind. 373, 14 N. E. 586, 3 Am. St. Rep. 655, the court said:

“It is settled everywhere that unrecorded assignments of mortgages are void as against subsequent purchasers, whose interests may be affected thereby, and whose conveyances are duly recorded, provided such assignments are embraced by the recording acts. Bacon v. Van Schoonhoven, 87 N. Y. 446; Decker v. Boice, 83 N. Y. 215; Swartz v. Leist, 13 Ohio St. 419; Yerger v. Bartz, 56 Iowa, 77 [8 N. W. 769]; Henderson v. Pilgrim, 22 Tex. 464; Boone on Mortgages, § 92; 1 Jones on Mortgages, § 472.”

We are therefore of the opinion that the appellee, Speakman, is entitled to a release of block 22 from the mortgage of High and wife to Hayden, on account of the failure of Babler to record 'his assignment of said mortgage as required by the statute cited, and thereby to give notice to purchasers that he was the owner thereof.

The judgment of the trial court will therefore be affirmed; and it is so ordered.

Koberts, O. J., and Hanna, J., concur.

Rehearing

ON REHEARING.

ABBOTT, District Judge

[2] On rehearing our attention has been called to the. fact that section 3943, O. L. 1897, quoted in our former opinion, was repealed by section 32, c. 62, Laws of 1901. This section of the statutelias no material effect upon the question under consideration. Its correct determination depends upon the proper construction of sections 3953, 3954, and 3955, quoted in our original opinion. Appellants, in their brief filed upon rehearing, have referred us to similar statutes in many of the states and the decisions of courts construing such statutes as not applying to the assignment of a mortgage given to secure the payment of a negotiable promissory note. Thus, in Nebraska, sections 10840, 10844, 10845, 10816, and 10818 of Cobby’s Compiled Statute's are admittedly much broader than the sections of our statute, quoted in our former opinion; yet in Snell v. Margritz, 64 Neb. 6, 91 N. W. 274, the Supreme Court of the state held that an assignment of the mortgage securing a negotiable note does not come within the meaning of the statute, and that no record of such assignment is necessary in order to protect the holder of the note against payments made by the purchaser of the property covered by the mortgage. The same rule was announced by the Supreme Court of Florida in the ease of Garrett v. Fernauld, 63 Fla. 434, 57 South. 671, interpreting a similar statute. In the followirg cases similar statutes were construed and a like conclusion reached: Craft v. Webster, 4 Rawles, 242; Assets Realization Co. v. Clark, 205 N. Y. 105, 98 N. E. 457, 41 L. R. A. (N. S.) 462; Joerdens v. Schrimpf, 77 Mo. 383; Burhans v. Hutcheson, 25 Kan. 625, 37 Am. Rep. 274; Adler v. Sargent, 109 Cal. 42, 41 Pac. 799; Howard v. Shaw et al., 10 Wash. 151, 38 Pac. 746; Hull v. Diehl et al., 21 Mont. 71, 52 Pac. 782. Many other cases to the same effect have also been cited by appellants and read by the court. Such being the practically unanimous holding of the courts, we are convinced that our former opinion was erroneous, and now hold that the bona fide holder of negotiable1 paper, transferred to him by indorsement thereon before maturity, and secured by a real estate mortgage, need not record the as«Hnmeut of the mortgage, or bring home to the mortgagor actual notice of such assignment, in order to protect himself against payments made after the assignment without his knowledge'or consent by a subsequent purchaser of the land, to the. mortgagee.

[3]- A party making payment upon a negotiable promissory' note should insist upon the presentation of the paper by' the party to whom the payment is- made, in order to make sure that it is at the time in his possession, and not outstanding in another, and, if he fails to do so, the payment is wholly at the risk of the payor. Daniels on Negotiable* Instruments (Gth Ed.] § 1227. -Appellee in this case was guilty of gross negligence in making .payment to Hayden, without demanding the production of the note and securing proper credit thereon.

Some question was raised upon the trial -as to whether Hayden-was acting as agent for Babler, at the-timé'he made-, the agreement to release, and received the partial payment. rThere is no proof of agency in-the record, and the trial court could not have based the judgment -upon this theory. .

' Eor1 the reasons stated, the judgment of the tri-al" court will be'reversed, and the cause remanded, with directions to dismiss the complaint; and it is so ordered. ’ ■ ' ’

Roberts, C.'J., and Hanna, J., concur. Parker, J.j did not participate.