Bull v. Mitchell

• Decision Date: 18 March 1896
• Citation: 66 N.W. 632,47 Neb. 647
• Parties: BULL v. MITCHELL ET AL.
• Court: Nebraska Supreme Court

47 Neb. 647

66 N.W. 632

BULL

v.MITCHELL ET AL.

Supreme Court of Nebraska.

March 18, 1896.

Syllabus by the Court.

1. Where a mortgage was made to secure payment of a negotiable promissory note, the parties making such note and mortgage are not necessarily entitled to protection as to payments to the mortgagee, made solely on the assumption that the original payee of the note still remained the holder thereof. Eggert v. Beyer, 62 N. W. 57, 43 Neb. 711;Stark v. Olsen, 63 N. W. 37, 44 Neb. 646, followed.

2. Where payment of a negotiable note secured by mortgage was made to an investment company of which the mortgagee was manager, and such payment was never forwarded to the party to whom such note had been transferred, held, that the mere fact that antecedent payments, made in like manner, had been made to be forwarded to the transferee of such note, and had been so forwarded, did not bind the holder of the note as to the final payment not forwarded, it being shown by the evidence that such holder had never in any way held out or recognized the mortgagee as his agent.

Appeal from district court, Colfax county; Marshall, Judge.

Action by George Bull against Rudolph Mitchell and others. Judgment for plaintiff. Defendants appeal. Affirmed.Grimison & Thomas, for appellants.

Phelps & Sabin and C. C. Flansburg, for appellee.

RYAN, C.

There was a decree in favor of George A. Bull, in the district court of Colfax county, whereby was foreclosed a mortgagesecuring payment of a promissory note for the sum of $1,000. Both the note and the mortgage bore date December 31, 1885. The maturity of the note was January 1, 1891, the makers were Anna Schuldt and John Schuldt, and the note, negotiable by its terms, was payable to the order of C. H. Toncray, and Toncray was likewise the mortgagee. Before this loan matured, the mortgaged premises were conveyed to Rudolph Mitchell, who, with his wife, was therefore made a defendant. The interest was evidenced by 10 coupons, each of which was for the sum of $37.50. On the original note and each coupon was indorsed these words: “Pay to order of _____, without recourse. C. H. Toncray.” The Nebraska Mortgage & Investment Company was organized at Fremont in the early part of the year 1888. Of this company C. H. Toncray was the vice president and manager until January 14, 1891, and its office was in the building in which the Farmers' & Merchants' National Bank transacted its business. Of this bank C. H. Toncray was cashier until January 1, 1889, and G. W. E. Dorsey was its president until October, 1891. Previous to the organization of the Nebraska Mortgage & Investment Company, Mr. Dorsey and Mr. Toncray were making farm loans in Nebraska, and selling in the eastern states the notes in this manner obtained. When Mr. Toncray had received the note which gave rise to this suit, with its coupons and mortgage, he sent them to Alfred Walker to be sold. Alfred Walker, at this time, was engaged in selling farm loans. Afterwards, in October, 1888, he caused to be organized, to carry on the same business, the partnership firm of Alfred Walker & Co., which, on February 1, 1890, was succeeded by a corporation under the name of the Alfred Walker Company. While there were the changes indicated, the line of business remained the same, and it was transacted at New Haven, Conn. There seems to have been no special arrangement between the brokerage concerns, of which Alfred Walker constituted the whole or only a part, on the one hand, and the party or parties who sent notes for sale on the other, further than that sales of the same nature as that above indicated were made. In respect to the subsequent transactions in relation to the note and its security under consideration, further statements will be given hereafter. The confidential clerk, who testified as to the transactions of the above-mentioned brokerage with reference to the particular loan with which we are now concerned, said that this note, coupons, and accompanying security were sent to Alfred Walker by the Farmers' & Merchants' National Bank of Fremont, Neb., to be sold in Connecticut, and on this point there was no other direct evidence. It is very difficult to ascertain the facts with relation to the Nebraska part of the history of this entire transaction. It seems, however, that Anna Schuldt and John Schuldt lived in Colfax county, and that it was customary with them to send to C. H. Toncray, at Fremont, in Dodge county, the amount of each coupon as it matured. This was done by sending by some person, or, perhaps, by the use of a draft of a bank near them. Within about a month after each amount had been sent, their coupon would be returned to them from Fremont, marked “Paid.” This notation of payment was always made at Fremont. After Mr. Mitchell became the owner of the mortgaged property, he, on December 30, 1890, purchased from Mr. Folda, a banker, a draft for $1,000, drawn on the First National Bank of Omaha, in favor of the Nebraska Mortgage & Investment Company. This draft, in compliance with the request of Mr. Mitchell, was sent,...