Mundy v. Whitmore

• Decision Date: 29 May 1884
• Citation: 19 N.W. 694,15 Neb. 647
• Parties: BEN MUNDY, APPELLEE, v. CHRISTIANA E. WHITTMORE, APPELLANT
• Court: Nebraska Supreme Court

19 N.W. 694

15 Neb. 647

BEN MUNDY, APPELLEE, v. CHRISTIANA E. WHITTMORE, APPELLANT

Supreme Court of Nebraska

May 29, 1884

APPEAL by defendants from a decree of the district court of Lancaster county, POUND, J., presiding.

AFFIRMED.

Samuel J. Tuttle, for appellant, on allegations in petition cited § 850, Code. Gregory v. Hartley, 6 Neb. 356. He also contended that the liability of the appellant in this controversy arises solely from the mortgage, and not at all from the note; for in this mortgage (granting for the present that it is valid) she has charged her separate estate with the payment of a certain debt, and the signing of the note does not enlarge the liability; that the appellee in this suit stands therefore at the best, as the assignee of a chose in action only, open to every defense available as against his assignor. 1 Jones on Mortg., 683. Edwards on Bills and Notes, page 286. McCrum v. Corby, 11 Kan. 464. Hadden v. Rodkey, 17 Kan. 429. And that the burden of proof of showing that appellee was a bona fide purchaser without notice devolved on him. Rock Island Bank v Nelson, 41 Iowa 563. On duress cited: Tapley v Tapley, 10 Minn. 360. Hackley v. Headley, 45 Mich. 569. Central Bank v. Copeland, 18 Md. 305. Anderson v. Anderson, 9 Kan. 112.

M. L. Easterday and A. S. Tibbets, for appellee, on bona fide purchase by appellee, cited: Comp. Stat., 393. Porter v. Green, 4 Iowa 571. Hewitt v. Rankin, 41 Iowa 35. Conrad v. Atlantic Ins. Co., 1 Peters, 441. Purchaser without knowledge of duress holds the property. Frey v. Clifford, 44 Cal. 335. Deputy v. Stapleford, 19 Cal. 302. White v. Graves, 107 Mass. 325. Hall v. Patterson, 51 Pa. 289. Marston v. Brittenham, 76 Ill. 611. Somes v. Brewer, 2 Pick. 184. Hewitt v. Rankin, 41 Iowa 35.

OPINION

MAXWELL, J.

This is an action to foreclose a mortgage executed by Whittemore and wife to F. W. Daubney and by him transferred before due to the plaintiff. The mortgage was executed upon the separate property of the wife, which was occupied as the family homestead. The principal defense relied upon is that the mortgage was executed by the wife while under duress by her husband. It was claimed on the trial of the cause that inasmuch as it is alleged in the petition that the note and mortgage were assigned to the plaintiff, that therefore he is not a bona fide holder thereof. The allegation is as follows: "On the 14th day of April, 1881, said F. W. Daubney for a valuable consideration assigned said note and mortgage and the money due thereon to this plaintiff." The question here involved was before this court in the case of State National Bank v. Haylen, 14 Neb. 480, 16 N.W. 754, and it was held that the allegation was sufficient. The word assign means to transfer, or make over. In its broad sense it includes all transfers of whatever nature.

In Jones on Mortgages, Vol. 1, § 834, it is said, "An assignee for value of a negotiable note before due takes it free from equities. At common law, so far as a mortgage is merely a debt or security for a debt, it is a chose in action, not negotiable, and therefore not assignable. * * But the debt, being the principal thing, imparts its character to the mortgage, and although the mortgage itself in the beginning is only assignable in equity, the legal rights and remedies upon the debt have become fixed upon this incident of the debt, and the equitable principles in regard to the mortgage have become naturalized in the common law system. When, therefore, the debt secured is in the form of a negotiable note, a legal transfer thus carries with it the mortgage security; and inasmuch as a negotiable promissory note, by the commercial law, when assigned for value before maturity, passes to the assignee free from all equitable defenses to which it was subject in the hands of the payee, it does not lose this character which it has under the commercial law when it is secured by mortgage. The mortgage rather is regarded as following the note, and as taking the same character; and it is the generally received doctrine that the assignee of a mortgage securing a negotiable note, taking it in good faith before maturity, takes it free from any equities between the original parties."

Under an allegation that an instrument has been assigned to the plaintiff he may introduce proof of any fact tending to show an assignment. The mode in most cases is not material, so that there was an intention to pass the entire title to the thing assigned. A transfer of negotiable paper by indorsement is but one of the modes by which it may be assigned or transferred. The allegation therefore was sufficient to authorize the introduction of testimony tending to show a transfer of the note and mortgage in question to the plaintiff.

It is alleged in the petition that no proceedings at law have been had for the recovery of the debt secured thereby, nor has any part thereof been collected and paid, and there is now due upon said note and mortgage the sum of $ 295.87. At common law a mortgagee could pursue all his remedies at one and the same time. Booth v. Booth, 2 Atk. 343. Burnell v. Martin, Doug. 417. Schoole v. Sall, 1 Sch. & Lefr. 186. Dunkley v. Van Buren, 3 Johns. Ch. 330, 4 Kent Com. 184. Under that practice a plaintiff could bring his action at law for the recovery of the debt, and having obtained a judgment, cause an execution to be levied upon the mortgaged premises and a sale thereof had. This in many cases led to the sacrifice of the debtor's property, and in Tice v. Annin, 2 Johns. Ch. 125, it is suggested in case a mortgagee should elect to proceed in this manner, and having sold the equity of redemption under a fi fa should afterwards attempt to collect his debt out of other property of the mortgagor, equity would either stay the proceeding or compel him upon payment of the debt to assign the same and the security to the mortgagor to enable him to indemnify himself out of the mortgaged premises. Afterwards the statute of that state was amended so as to prohibit a sale of the mortgaged premises upon an execution issued on a judgment on the mortgage debt, and also prohibiting an action at law while the action to foreclose was pending. Our st...