45 Neb. 659 | Neb. | 1895
One Donald McLean made and delivered to W. D. Mathews four promissory notes, each dated December 31, 1890, one for $2,000, payable ninety days after date, one for $1,500, payable five months after date, one for $1,500, payable six months after date, and one for $5,000, payable eight months after date. To secure these notes he conveyed by deed absolute in form, certain real estate to Mathews. The pleadings on both sides admit that this conveyance was made as security, and it was, therefore, a mortgage in spite of its form. A few days thereafter Mathews sold the three notes first to mature to the State Bank of O’Neill, of which Mathews was president, and at the same time executed to that bank an instrument in the form of a mortgage. on the land conveyed to him by McLean. This mortgage was conditioned to secure all four notes. The three notes sold were indorsed by McLean generally. Still later McLean, in part payment of a debt to the Thomson-Houston Company, indorsed the remaining note without recourse to that company. After the maturity of the notes the bank instituted foreclosure proceedings, making the Thomson-Houston Company a party defendant. A decree of foreclosure was rendered, and the land sold, not realizing enough to pay all the notes. The decree had not fixed the order of payment, but directed the purchase money to
As we have said, the conveyance from McLean to Mathews must be treated as a mortgage, and this notwithstanding the fact that McLean testifies that the agreement was that if the first note was not paid the deed should become absolute. This was the understanding and is the legal effect of all mortgage*, and the wliole doctrine of foreclosure and redemption arose from courts of equity relieving against this understanding and its legal effect. This deed being a mortgage, the mortgage made by Mathews to the bank must be considered merely as an assignment of the mortgage from McLean to Mathews. It therefore cuts very little figure. The mortgage is but an incident to the debt, and by an assignment of the debt the mortgage passes to the assignee. (Webb v. Hoselton, 4 Neb., 308.) It has also been held that where a mortgage secures several notes the assignment of one of the notes is an assignment pro tanto of the mortgage, and that, in the absence of any stipulation to the contrary, notes so secured share pro rata in the distribution of the fund. (Studebaker v. McCargur, 20 Neb., 500; Harman v. Barhydt, 20 Neb., 625; Todd v. Cremer, 36 Neb., 430; Whipple v. Fowler, 41 Neb., 675.) Without considering the correctness of this rule, it is sufficient to say that it has been for many years established in this state. It has become a rule of property, and it will, not now be disturbed. Is there anything in this case to take it out of the rule?
There is some argument on either side addressed to the position of the parties as being purchasers without notice. All these considerations may be dismissed. It is true that Mathews, dealing with the bank in his individual in
Judgment affirmed.