Bradford Savings Bank & Trust Company v. Crippen
| Decision Date | 04 December 1901 |
| Docket Number | 10,540 |
| Citation | 88 N.W. 166,63 Neb. 210 |
| Parties | BRADFORD SAVINGS BANK & TRUST COMPANY, APPELLANT, v. ADALINE CRIPPEN ET AL. APPELLEES. [*] |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Cass county. Heard below before RAMSEY, J. Reversed.
REVERSED AND REMANDED.
Flansburg & Williams, for appellant.
Frank H. Woods, contra.
AMES C. DUFFIE and ALBERT, CC. concur.
Adaline Crippen, being the owner in fee of a tract of land situate in Cass county, executed a mortgage thereon conditioned to secure the payment to Benjamin A. Gibson or order of a promissory note bearing annual interest and payable, 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, guaranteeing 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 applicant, 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 as respects the lien of the mortgage as would have been a suit or judgment at law on the note upon the title to and right of action upon the latter under like circumstances. This is the sole question in the case. The appellant admits, as under authority of Whipple v. Fowler, 41 Neb. 675, 60 N.W. 15, he is obliged to do, that, the facts being otherwise unchanged, if Gibson had executed and made of record a release of the first mortgage, and had then obtained a conveyance of the title and made the Bangs mortgage, the latter instrument would have been the superior lien; and it...
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