Bradford Sav. Bank & Trust Co. v. Crippen
| Decision Date | 04 December 1901 |
| Citation | 63 Neb. 210,88 N.W. 166 |
| Court | Nebraska Supreme Court |
| Parties | BRADFORD SAV. BANK & TRUST CO. v. CRIPPEN ET AL. |
A simulated decree of foreclosure and sale upon a mortgage upon real property, without the consent or knowledge of the owner of the debt and instrument which the mortgage was given to secure, and in a name, as plaintiff, that does not appear in the mortgage or upon the records of the register of deeds, and a sale and conveyance pursuant to such simulated decree, are ineffectual upon the rights of the true owner of the debt and mortgage.
Commissioners' opinion. Department No. 3. Appeal from district court, Cass county; Ramsey, Judge.
Action by the Bradford Savings Bank & Trust Company against Adaline Crippen and others. Judgment for defendants, and plaintiff appeals. Reversed.Flansburg & Williams, for appellant.
F. H. Woods, for appellees.
Adaline Crippen, being the owner in fee of a tract of land situated in Cass county, executed a mortgage thereon conditioned to secure the payment to Benjamin A. Gibson or order of a promissory note bearing semiannual interest and pay able, as to principal, five years after date. The mortgage contained a covenant to the effect that, upon default of payment of any installment of interest, the note should become immediately due and payable. Gibson sold and indorsed the note to one Leslie, guarantying payment; and Leslie sold and delivered it to the appellant, the Bradford Savings Bank & Trust Company. Gibson was an attorney at law, and, by connivance with or imposition upon his law partner,procured the latter, after the sale of the note to the appellant, to begin and prosecute an action for the foreclosure of the mortgage in the name of Leslie as plaintiff; alleging ownership of the note in him, and a default in payment of interest. There had been no default of an interest payment, and the action and its consequences, hereinafter recited, do not appear to have been with the knowledge of Leslie, and were certainly without the knowledge of the appellant. No assignment of the mortgage was ever put upon the records of the county, or presumably was ever made. Service was made upon all the apparent parties to the title, and the action proceeded regularly to decree, sale, and confirmation, Gibson becoming the purchaser; and a certificate to that effect was executed by the clerk of the court, and filed with the register of deeds. By this proceeding the lien of the mortgage was apparently merged in the fee, and the latter transferred from Crippen to Gibson. Afterwards, and after recording the sheriff's deed to himself, Gibson obtained a loan of a sum of money, and, to secure the payment of the same, executed and delivered his negotiable note and a mortgage on the premises to one Munson, who still subsequently sold, indorsed, and delivered the note and assigned the mortgage for value, before maturity, to the appellee Edward A. Bangs. Bangs purchased his note and mortgage in reliance, in good faith, upon the state of the title as disclosed by the records of Cass county, of which, before purchasing, he caused a search and examination to be made. Five months later the appellant, the Bradford Savings Bank & Trust Company, began this action to foreclose the first mortgage, making Crippen, Gibson, and Bangs, and intermediate assignees of the second mortgage, parties. Issues were made up between the appellant and Bangs, the other parties making default; and the case was tried and submitted to the court upon the foregoing state of facts, about which there was and is no dispute. The court adjudged the title to be in Gibson, subject to a first lien thereon in favor of the defendant Bangs for the amount of his mortgage, and to a second lien thereon in favor of the appellant for the amount of its mortgage, and entered a decree of foreclosure and sale for the satisfaction of the liens in the order named.
Counsel for appellant contends that this decree is erroneous, because the first action was begun and prosecuted to decree and sale without the authority or knowledge of the then owner of the first mortgage, and in fraud of its rights; that the mortgage, having been given to secure the payment of a negotiable note, partook of the negotiable character of the latter instrument, and that therefore the action in foreclosure by the indorser after he had parted with the title and possession of the instrument conferred no jurisdiction of the person of the appellant, or the subject of the action upon the court, and was as ineffectual...
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