Bamberger v. Geiser

• Decision Date: 28 June 1893
• Citation: 33 P. 609,24 Or. 203
• Parties: BAMBERGER et al. v. GEISER et al.
• Court: Oregon Supreme Court

33 P. 609

24 Or. 203

BAMBERGER et al. v. GEISER et al.

Supreme Court of Oregon

June 28, 1893

Appeal from circuit court, Baker county; M.D. Clifford, Judge.

Action by H. Bamberger, M.L. Tichner, and Sol Tichner, copartners doing business under the firm name and style of Bamberger Tichner & Co., against Daniel Entermille, Emma Geiser, Edward Geiser, and Frank Geiser, and also Albert Geiser and Louise Geiser, both individually and as administrators of the estate of John Geiser, deceased, to foreclose a mortgage. Judgment for plaintiffs, and defendants appeal. Affirmed.

The other facts fully appear in the following statement by LORD C.J.:

This is a suit to foreclose a mortgage. The facts are that on the 15th day of July, 1889, the defendant Entermille made and delivered his negotiable promissory note to A.J. Lawrence C.W. Mandeville, and R.S. Anderson for the sum of $500 payable 60 days after date, and that to secure the payment of the same he made and delivered to them his mortgage upon certain real estate, which mortgage was duly acknowledged and recorded. That thereafter the said promissory note was indorsed on the back "Without recourse," and signed by each of the payees named therein, when it was delivered into the possession of A.J. Lawrence, one of such payees with the consent of the other two payees, to hypothecate or sell it. That on the 22d day of July, 1889, the said A.J. Lawrence sold and delivered said note to the plaintiffs, and at the same time delivered to them the mortgage securing its payment, which said note and mortgage the plaintiffs still own and hold, and no part of which has ever been paid. That subsequently, but before the maturity of the note, the defendant Entermille paid to Anderson and Mandeville, two of the payees named therein, the sum of $50, for the purpose of liquidating in full the note and discharging the mortgage, whereupon Mandeville, one of the payees, wrote upon the margin of the mortgage record as follows: "State of Oregon, county of Baker. Full and complete satisfaction of the within mortgage this 12th day of August, 1889, acknowledged. Lawrence, Anderson, and Mandeville. Per C.W. Mandeville. Attest: W.H. Packwood, Deputy County Clerk,"--all of which was without the knowledge or consent of the plaintiffs, and whose first knowledge of the same was acquired when the suit was commenced. That John Geiser, now deceased, took a mortgage on the same premises from the defendant Entermille to secure the payment of a sum specified therein, but that at the time of taking the same he knew of the payment of the $50 by the defendant Entermille to said Anderson and Mandeville, and that the note secured by the mortgage was not taken up nor delivered when the record was so indorsed. That on the 20th day of January, 1891, after the death of John Geiser, the defendants named as administrators of his estate, in payment of such mortgage, took a deed from the defendant Entermille, wherein and whereby he conveyed to the estate of John Geiser, deceased, all his right, title, and interest in and to the property described in said mortgage, and at the time of taking such deed the defendant Entermille represented to the defendant administrators aforesaid that the note was paid, and the mortgage canceled, and that said administrators examined the records of Baker county and found the mortgage canceled in the words as already set out. That neither the defendant Entermille nor the defendants Geiser, administrators as aforesaid, knew that the plaintiffs owned the note until the commencement of this suit. The trial resulted in a decree in favor of the plaintiffs, foreclosing their mortgage, and ordering the property sold to satisfy the note, etc., from which decree the defendants have brought this appeal.

L.M. Robinson and T.C. Hyde, for appellants.

Olmsted & Courtney, for respondents.

LORD, C.J., (after stating the facts.)

The question to be determined is whether the discharge upon the record of a mortgage by a mortgagee, after he has assigned it, operates to cancel such mortgage as against subsequent purchasers in good faith and for value. If this question is to receive an answer in the affirmative, it must be owing to some legal obligation which our registry laws impose upon an assignee to record his mortgage if he would protect himself against such subsequent purchasers and incumbrancers. It is well settled that a mortgagee and his assignee are regarded as purchasers under the registry laws. 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. The assignee stands in the place of the payee. As the assignment of the note carried the mortgage, upon recognized legal principles the security is protected in the hands of a bona fide holder to the same extent as the note itself, unless there is some requirement of the law for the registry of such assignments. In Carpenter v. Longan, 16 Wall. 273 it was held that the assignment of a negotiable note before its maturity raises the presumption of a want of notice of any defense to it, and that this presumption stands until overcome by proof; Mr. Justice Swayne saying: "The case is a different one from what it would be if the mortgage stood alone, or the note was nonnegotiable, or had been assigned after maturity. The question presented for our determination is whether an assignee, under the circumstances of this case, takes the mortgage as he takes the note, free from the objections to which it was liable in the hands of the mortgagee. We hold the affirmative. The contract, as regards the note, was that the maker should pay it at maturity to any bona fide indorsee, without reference to any defenses to which it might have been liable in the hands of the payee. The mortgage was conditioned to secure the fulfillment of that contract. To let in such a defense against such a holder would be a clear departure from the agreement of the mortgagor and mortgagee, to which the assignee subsequently, in good faith, became a party. If the mortgagor desired to reserve such an advantage, he should have given a nonnegotiable instrument. If one of two innocent persons must suffer by a deceit, it is more consonant to reason that he who 'puts trust and confidence in the deceiver should be a loser, rather than a stranger.' " We must turn, then, to our registry laws, and ascertain whether they impose any legal obligation upon the assignee of a note secured by a mortgage to take the assignment in the form of a conveyance, and have it recorded as a means of affording notice to subsequent purchasers and incumbrancers, if he would avoid the postponement of his lien as to them. Section 3031, Hill's Code, provides that a mortgage may be discharged upon the record thereof "by the mortgagee or his personal representative or assignee" acknowledging satisfaction of the mortgage before the clerk, or executing a certificate to that effect with the formalities of a deed, and presenting the same to the clerk. This section recognizes the assignee as the proper party to discharge the record after the assignment of the note and mortgage. He is the bona fide owner and holder of the note and its security, which entitles him to discharge the mortgage. The mortgagee, after he has assigned his interest, has no power to extinguish the mortgage by acknowledgment of its satisfaction, release, or otherwise. Being without the power, his fraudulent acknowledgment of satisfaction cannot affect the rights of the assignee. As Mr. Justice Deady said: "Such an acknowledgment is simply a fraud, and, if any person must suffer by it, it ought to be the person who, by...