195 P. 823 | Or. | 1921
This lawsuit is a result of the perfidy of one Holton and of the negligence of one William Yaetz, the defendant and cross-complainant. Yaetz bargained with Holton for the sale and transfer of the mortgage mentioned in our statement of the case. Holton executed an assignment purporting to transfer the mortgage, describing the same as bearing date June 17, 1911, instead of December 30, 1909, the date of the mortgage. However, the assignment refers to the book of mortgages and the page thereof where the mortgage was recorded. A blank form of assignment was used, and in filling it out the words “interest to date” were inserted where the word “note” should have been written. The assignment was placed on record in accordance with the provisions of Sections 9879 and 9880, Or. L.
“That things in possession of a person are owned by him; that a person is the owner of property from exercising acts of ownership over it or from common reputation of his ownership”: Section 799, Or. L., paragraphs 11 and 12.
Holton, in pledging the securities, committed a wrong that must fall upon one of two persons. The law protects the one who is guilty of the least negligence. The parties here are not equally faultless and do not stand in equal right. Vaetz negligently permitted the mortgagee to retain control and possession of the mortgage and negotiable promissory note secured by it. The presumption of law arising from the fact that the note and mortgage were in Holton’s possession at the time the bank took them again on September 18, 1911, was strengthened by the further fact that he was the payee named in the note. Vaetz’s negligence permitted Holton to deceive the plaintiff.
As appears from our statement, Holton delivered to Vaetz what seems from the record to be a negotiable promissory note for the sum of $2,400, payable to the order of Frank Holton, dated December 30, 1910, and bearing interest at the rate of 7 per cent per annum. This note is not a duplicate of the mort
From Vaetz’s own testimony, though he is a victim he is not faultless. In permitting Holton to retain that negotiable promissory note and the mortgage securing it, he empowered him to obtain money from the bank, while without the custody of the note and mortgage Holton would not have been enabled to defraud the plaintiff.
“It is not often that the question of priority of rights under different assignments of the same mortgage can arise, because an assignment is generally accompanied by a delivery of the note or bond secured by the mortgage, and of the mortgage itself; and except under peculiar circumstances a person acting in good faith would not take a mere written transfer of the mortgage title without delivery of these. The fact that the assignor did not have these papers to deliver would be enough ordinarily to put the purchaser on his guard, even if it would not amount to notice to him of prior assignment. At any rate, the absence of these papers would be enough to put in doubt his good faith in taking the assignment, and would make him chargeable with notice of any defect there may be in the assignor’s title”: Jones on Mortgages (6 ed.), § 483.
Justice Deady said:
“As between different assignees of the same mortgage, the question of priority could not well arise, because an assignment without the delivery of the note and mortgage, except under peculiar circumstances, could hardly be considered as made or accepted in good faith”: Oregon & Wash. Trust Inv. Co. v. Shaw, 5 Sawy. 336 (18 Fed. Cas. 766, No. 10,556).
As stated by Justice McBride in Kaiser v. Idleman, 57 Or. 228 (108 Pac. 193, 195, 28 L. R. A. (N. S.) 169):
“The note being by the law-merchant readily transferable by indorsement and delivery, the courts, to facilitate the transaction of business, have held that, for certain purposes, the mortgage is an incident of the note, and passes with it.”
In Bamberger v. Geiser, 24 Or. 206 (33 Pac. 609, 610), Justice Lord wrote that—
“It is a familiar principle that where a debt is secured by mortgage, the debt is the principal and the mortgage is the incident, and that an assignment of the debt is an assignment of the mortgage. Here there was a written assignment of a negotiable note before maturity, and a delivery of the mortgage.
“The assignment of the note carried the mortgage, as the former is the principal and the latter the incident."
To similar effect are Roberts v. Sutherlin, 4 Or. 219; Barringer v. Loder, 47 Or. 223 (81 Pac. 778); Roth v. Troutdale Land Co., 83 Or. 507 (162 Pac. 1069).
In the case of Reeves v. Hayes, 95 Ind. 524, 525, Chief Justice Elliott said:
“Promissory notes are articles of commerce, and pass from hand to hand by barter and sale. The transfer of a note carries the mortgage, for the former is the principal and the latter the incident. This is in accordance with the universal rule that the grant of the principal thing carries all the incidents.
“The assignment of a note negotiable by the law-merchant carries the mortgage security, and in the hands of a bona fide holder the security is protected to the same extent as the note itself: Gabbert v. Schwartz, 69 Ind. 450; Bayless v. Glenn, 72 Ind. 5; Carpenter v. Longan, 16 Wall. 271 [21 L. Ed. 313; see, also, Rose’s U. S. Notes]; 1 Dan. Neg. Inst. 834; Clemens Corp., § 158."
The case of Barringer v. Loder, 47 Or. 223 (81 Pac. 778), is in point, and construes and applies Section 9884, Or. L.; the same being Laws of 1889, page 38, entitled, “An Act to provide for the discharge of mortgages upon affidavit,” and Sections 9879, 9880, and 9885, Or. L., adopted in 1895, page 55, being “An Act to provide for the transfer and satisfaction of mortgages upon real estate and the recording thereof. ”
The facts in Barringer v. Loder, 47 Or. 223 (81 Pac. 778), are as follows: One Hayden purchased from William Barringer realty situate in Clackamas County, receiving a deed therefor. He paid part of the purchase price in money and in payment of the balance delivered to Barringer a joint and several promissory note executed by himself and wife, payable to the order of Barringer three years after date. They also executed and delivered to Barringer their
“The cardinal question presented here is, who acquired the better title to the note and mortgage in suit, the plaintiff or Loder? * *
“The appellants base the right of Loder to rely upon the record and their right to discharge by payment to him upon Sections 5362 and 5363 of B. & C. Comp. (Sections 9879 and 9880, Or. L.); it being insisted that a mortgage cannot be otherwise assigned or transferred than as by these sections prescribed. The first section provides, in effect, that mortgages may be assigned or transferred by an assignment in writing, executed and acknowledged with the same formalities as deeds and mortgages, etc., and the second that every assignment of a mortgage shall be recorded at full length, and reference shall be made to the book aud page containing such assignment upon the margin of the mortgage record. The
“When these statutes were enacted, an indorsement of a note had been long recognized as carrying with it the mortgage given to secure its payment, as the latter was regarded but an incident to the debt: Roberts v. Sutherlin, 4 Or. 219; Bamberger v. Geiser, 24 Or. 204 (33 Pac. 609). The act of 1889 is in express recognition of this manner of assignment, and it provides an appropriate method of satisfying the mortgage of record by the assignee or indorsee of the note. When the legislature came to the enactment of the subsequent statute, it very properly used the word ‘may’ with reference to an assignment by separate writing, still recognizing the right, as it had formerly done, to assign by indorsement of the note. When it comes to the manner of recording the assignment, the word ‘shall’ is used. Why use the word ‘may’ in one section and ‘shall’ in the succeeding one? The relationship indicates an intendment that there should be a distinction in their application in practice, and this is re-enforced by the legislative declaration that the act of 1895 was adopted because there existed no statute for the recording of assignments of mortgages. Assignments in the method designated then could be made before the statute as well as by assignment of the note, and the act simply prescribes that this may still be done by that method, but that such assignments shall be recorded in the manner pointed out.”
No single fact is decisive of this case. This is a suit in equity. We have considered all the facts relating to the subject matter of the suit, the situation of the parties, their means of knowledge, the circumstances existing, the failure to require delivery of
There was “quite a bit of property; quite a few mortgages signed. I don’t know how many. I could not say. * * The property was his. Whenever he asked me to sign a note on a piece of property of his own I did it for him.”
From her testimony, Mrs. Nickles appears to have been a dummy for Holton. Regardless of the nature of the title Mrs. Nickles had to the real property mortgaged by her, she does not seem to have been divested of that title at the time of the trial.
We have searched the record in vain for the purpose of ascertaining what right or claim Jean C. Holton may have had to the premises. There is' nothing in the record, by way of allegation in the pleadings, or proof by evidence, to show that Ada E. Nickles and H. T.' J. Nickles, her husband, or any other per
A court of equity, like a jury, is confined to the record for evidence upon which to ground the finrHng of a fact. A legitimate conclusion of law must be based upon a fact legally found. A decree based
The defendant and cross-complainant, William Yaetz, is entitled to a judgment decreeing- him to be the owner of that certain note and mortgage held and foreclosed in this, suit, subject to the rights of plaintiff, and that said note and mortgage constitute a lien on said property in his favor, for the difference between the amount adjudged to be due plaintiff, together with its costs and disbursements, including attorney’s fees, and the amount due on the said promissory note and mortgage; and he is further entitled to an order of this court adjudging and decreeing that said mortgage lien be foreclosed and that the real property be sold, subject to the rights aforesaid of plaintiff or its successor in interest, to satisfy the amount of his said lien, together with costs and disbursements, including his attorney’s fees. Further relief cannot be granted to defendant and cross-complainant in this proceeding.
The only judgment for costs on appeal in this case will be entered here in favor of defendant and cross-complainant William Vaetz and against the Pacific Northwest Adjustment Company.
The decree of the lower court will be modified so as to accord with our views herein expressed.
Modified.