60 Kan. 397 | Kan. | 1899
The opinion of the court was delivered by
On March 14, 1887, J. K. Hudson and Mary W. Hudson executed and delivered a promissory note to C. W. Ament for $5500; due in forty-five days after date, with interest from date at ten per cent, per annum, and at the same time, and to secure the payment of this indebtedness, they executed a chattel mortgage on the Daily Capital newspaper plant. This action was brought to recover the indebtedness and to enforce the lien of the chattel mortgage. Shortly after the execution of the note, Ament transferred it and the mortgage to the First National Bank of Topeka, where they were held as collateral security for a debt which he owed the bank. The indebtedness of Ament to the bank was in the form of notes, which J. K. Hudson signed as surety. As the interest accrued on the $5500 note given by Hudson to Ament, Hudson paid the same to the bank, and it applied these payments on the Ament debt to the bank. It was agreed among all the interested
In September, 1892, the First National Bank not desiring to carry the indebtedness longer for Hudson, it was transferred to the Northfield National Bank, of Northfield, Vt., and a note for $5500 was executed by Hudson and Keizer to the bank, and the original $5500 note, as well as the mortgage, was transferred to it and held as additional evidence and security for the indebtedness. At that time all the parties interested treated the original note and mortgage by Hudson to Ament as a valid and subsisting indebtedness and a first lien on the newspaper plant, and it was their intention that it should so continue. Renewals of the Hudson and Keizer note were made,
Prior to the commencement of this action E. B. Merriam bought the claim from the Northfield National Bank, and the note and mortgage were transferred to him. In June, 1890, the Topeka Capital Company was organized, and a bill of sale of the newspaper plant was made by Hudson to that company, which contained a stipulation that the property was free from all incumbrances. A few shares of the stock were sold, but Hudson retained the greater part of the same and a controlling interest in the company, which continued in the possession of the property until it was turned over to John R. Mulvane, mortgagee, in November, 1895. During all this time the principal officers of the company recognized the validity of the mortgage in question. Other mortgages were giv§n, and in this proceeding Mulvane, who had acquired several mortgages on the plant, set up the defense that Merriam’s action was barred by the five years’ statute of limitations. He further answered alleging payment and the cancelation of the mortgage, and claiming that his liens were prior and superior to that of the plaintiff. The Topeka Capital Company answered that it purchased the mortgaged property from Hudson in June, 1890, and had been in the possession of the property since that time, claiming to be its owner. It also set up the five years’ statute of limitations, and averred the payment of the debt and the cancelation of the mortgage.
• There was but little dispute in the testimony, and what there was has been settled by the findings of the trial court, based, as they appear to be, on sufficient evidence. It was found by the court that the debt had never been paid or discharged, that the mortgage
A payment of interest is regarded as an acknowledgment of the debt, which will start the statute of limitations afresh, and a written indorsement of such payment upon the instrument is not required. (Gen. Stat. 1897, ch. 95, § 18; Gen. Stat. 1889, ¶ 4101.) It is not the indorsement of a credit upon the note which revives the liability, but it is rather an actual
Nor are we able to sustain the claim that the debt was paid and satisfied by the execution of other promissory notes.' Of course, if the debt was paid and canceled the mortgage was necessarily extinguished, but “ where a mortgage is given to secure the payment of a particular debt the mortgage is not exhausted until the debt is paid or canceled, although the debt may in the meantime be evidenced by several different promissory notes.” (Cooper v. Condon, 15 Kan. 578.)
Assuming that the mortgage in question was given not to secure a debt apart from the note, but rather the debt as evidenced by the note in suit, we still have the question whether the giving of other notes should be treated as a payment of the original note as between the contesting parties, The common-law rule is that a promissory note made by the debtor does not discharge the 'preexisting debt for -which it is given, unless such be the express agreement of the parties. The intention and agreement of the parties is the controlling consideration. Whether the parties to these transactions intended that the notes should be regarded as absolute payment and extinguishment of the debt, or whether they were intended' as additional evidence of the debt with the purpose that the original debt should still continue in force, is to be determined by the evidence. (Kermeyer v. Newby, 14 Kan. 164;
There is testimony which tends to show that the transaction with the Northfield National Bank was a purchase of the note and mortgage in controversy, and not a payment or satisfaction of the same ; and where there is testimony which tends to sustain a finding of fact made by the court, it is the end of the. controversy as to that fact. The mortgage was recorded' and the Capital company had not only constructive but actual notice of the existence of the mortgage. It was renewed from year to year, and the public records disclosed that the debt which it was given to secure was wholly unpaid, and that the parties to the same treated it as a subsisting debt, and the mortgage as a valid lien. The company therefore took the prop-. erty subject to the mortgage. It had no right superior to those which would have been possessed by Hudson - if there had been no transfer of the property from him, to the company. It follows, too, that the liens held-by Mulvane are subordinate to the mortgage in question.
There is nothing substantial in the claim that tlip action was barred by the two years' statute of limita-; tions.
Finding no error in the proceedings, the judgment of the district court will be affirmed.