6 S.D. 592 | S.D. | 1895
The frial of this action, which was to foreclose a certain trust deed or mortgage, executed by the defendant Hurley and his wife tq fiecure the paynient of jiheir bond op
No effort has been made to present all the testimony offered at]the trial bearing upon the issues raised by the pleadings, and should a proper determination of this appeal, viewed as we are
In determining whether or not the delivery of the note and trust deed was absolute or in the nature of an escrow, it will be necessary to briefly examine the evidence in relation thereto* The defendant Hurley testified, in effect, that he went to-the principal office of the American Mortgage & Investment Company, the payee named in the note, and applied to S. W.Jacobs, the president of said .company, for a loan of $600; that the papers including the instrument in which the secretary of said company is named as trustee, were all executed by John M. Hurley and Mary Hurley,and left at the office of the loan company; that witness expected to receive the money as soon as papers were signed, and before they were filed for record. There is nothing in the evidence tending to prove an obligation in the nature of an escrow. The trust deed was not delivered to a stranger subject to a contingency, or to be held by a third person until the money evidenced by the bond was paid by the grantee or payee to the defendant Hurley. All that was required in the way of delivery, to give the instrument full force and effect, was fully performed. A corporation can act only through its officers and authorized agents, and it clearly appears that the business under consideration was thus transacted. Section
Counsel for appellant, basing their agument upon the hypothesis that the note in suit is a negotiable instrument, transferred to plaintiff in good faith for value before due, confidently maintain that it is now free from any equities.or defenses, existing between the Hurleys and the American Mortgage & Investment Company, and that the judgment for plaintiff thereon should not have been vacated nor disturbed. The follówing is a copy of the note: “Madison, Dakota, Dec. 24th, 1887. On the first day of Jan’y, eighteen hundred and ninety-one, for value received, we promise to pay to the American Mortgage & Investment Company, or order, .six hundred dollars, with interest thereon at the rate of 7 per centum per annum, payable semiannually, according to the tenor of ten interest coupons hereto attached. * * * If any part of the principal is not paid at maturity, it shall bear interest at the rate of twelve per cent, per annum, payable annually; and, if any interest remains unpaid twenty days after due, the principal shall become due and collectible at once without notice, at the option of the holder.” Upon the authority of Hegeler v. Comstock, 1 S. D. 138, 45 N. W. 331, respondents’ counsel contend that, the foregoing is not a negotiable instrument; and thus a question of importance, if not decisive of the appeal, is presented for our consideration. If the note is subject to all defences existing between the original parties, the order granting a new trial must be in all respects affirmed. Theprovision in the note in the case
It is further maintained by counsel for respondents that the provision authorizing the holder to declare the whole amount matured and payable, if any interest remains unpaid 20 days after due, introduces another element of uncertainty, tending to destroy the negotiability of the instrument, and, while cases may be found going to that extent, we should be reluctant to follow them. It was said in the case of Chicago, etc., Equipment Co. v. Merchants’ Bank, 136 U. S, 268, 10 Sup. Ct. 999, concerning a note containing a similar provision, “that its negotiability was not affected by the fact that it might at the option of the holder, and by reason of the default of the maker, become due at a date earlier than that fixed. ” See, also, Roberts v. Snow (Neb.) 43 N. W. 241; Heard v. Bank, 8 Neb. 10; DeHass v. Roberts, supra; Ernst v. Steckman, 74 Pa. St. 13. In our opinion, there is no provision in the note in suit which, under the statute or mercantile law, destroys its negotiability.
It has been noticed that the interest-bearing bond which we find to be a negotiable instrument upon its face was made payable to the American Mortgage and Investment Company or order, and it is contended that the indorsement, 1 ‘For value received I hereby assign the within bond, together with all our interest in, and all our right under, the mortgage securing the same,” is not, as to form or effect, the indorsement required by the statute or the law merchant, and that the mere signature, “S. W. Jacobs, Prest.” attached thereto, is insufficient in the absence of an indorsement by the American Mortgage and Investment Co., to constitute a valid assignment of the right, title, and interest of the payee named in the instrument. It appears from the uncontroverted evidence that S. W. Jacobs was the president of the corporation named as payee in the note, and it will be presumed, in the absence of anything to the contrary, that he was authorized to act for the corporation, and to transfer its title to the instrument. Lay v. Austin (Fla.) 7 South, 142;
As subdivision 4 sec. 4351, Comp. Laws, provides that a transfer of a debt secured by mortgage carries with it the security the expression, “I hereby assign the within bond,” is the only portion of the writing upon the back of that instrument requiring further consideration; and the phrase, ‘‘together with all our interest in, and all our rights under, the mortgage securing the same,” will be regarded as unimportant. As it is clear from the evidence that the note was .transferred to plaintiff for full value, before maturity, without notice of any defense on the part of the makers, plaintiff’s right to enforce the collection thereof, notwithstanding the existence of a defense valid between the makers and the original payee, depends upon the character and legal effect of the transfer to plaintiff as shown by the writing upon the back of such instrument. Section 4472 of the Compiled Laws is as follows: “One who writes his name upon a negotiable instrument, otherwise than as a maker or acceptor, and delivers it with his name thereon to another person, is called an indorser, and his act is called indorsement.” In order to destroy the negotiability of a promissory note, .the indorsement of which specifies the indorsee, words expressly employed.for that purpose must be used, and in no other manner can the instrument be rendered nonnegotiable. Comp. Laws, sec. 4478. Section 4871 is as follows: “In the case of an assignment of a thing in action, the action by the assignee shall be without prejudice to any set off or any defense existing at the time of, or before notice of, the assignment; but this section shall not apply to a negotiable promis sory note or bill of exchange, transferred in good faith, and upon good consideration, before due.” It is clear from the foregoing provisions that the framers of our statute did not in: tend to establish a more stringent or technical rule concerning the indorsement of negotiable instruments than is justified and
Counsel for respondents confidently maintain that the instrument for the forclosure of which this suit was instituted, if not an absolute nullity, is in no sense a mortgage, and that consequently an action of this kind is unauthorized, and cannot be maintained. Section 4348 of the Compiled Laws, upon which respondents measurably rely, is as follows: “Every transfer of an interest in property, other than in trust, made only as security for the performance of another act, is to be deemed a mortgage. * * From a careful examination of the provisions of our statute relating to powers, user and trusts, we are confident that the writing before us is not of the character specified therein, nor does it evidence the accomplishment of any of the enumerated purposes of a trust deed; and we therefore conclude that the transfer in trust of an interest in real property contemplated in the foregoing section of the statute was not affected by this instrument made only as security for a debt, and which is interchangeably denominated a “mortgage” or “trust deed,” and which contains all the essential requisites of a mortgage. In Koch v. Briggs, 14 Cal. 257, and Grant v. Burr, 54 Cal. 298, it was held, under a statute in some respects similar to ours, that a trust deed which authorized the trustee to sell and convey the land described therein, upon default of the payment of a debt, was not a mortgage requiring a foreclosure, but an absolute conveyance of the legal title from the grantor to the trustee, free from any right or equity of re