Cheney v. Campbell

• Citation: 44 N.W. 451,28 Neb. 376
• Parties: CHENEY v. CAMPBELL.
• Decision Date: 31 December 1889
• Court: Supreme Court of Nebraska

28 Neb. 376

44 N.W. 451

CHENEY

v.CAMPBELL.

Supreme Court of Nebraska.

Dec. 31, 1889.

Syllabus by the Court.

1. In an action to foreclose a mortgage on real estate, there were five notes given for $60, due and payable in one, two, three, four, and five years. The notes were dated February 29, 1876, and the summons in the action served on the defendant was dated February 9, 1888. Held that, in an action to foreclose the mortgage, the notes continued as evidence of the debt for 10 years from the time they each became due, and that only the first of the above notes was barred.

2. Certain notes, given for grossly usurious interest, and secured by a second mortgage on real estate, were transferred to a bona fide holder for one-half of their face value, the claim of the purchaser being that the security might be inadequate. In an action by his executor to foreclose the mortgage, held, that the same rule would be applied as where the original consideration was wholly fraudulent, and the recovery would be restricted to the amount paid by the purchaser, with legal interest thereon.

Appeal from district court, Johnson county; BROADY, Judge.L. C. Chapman, for appellant.

S. P. Davidson, for appellee.

MAXWELL, J.

In the year 1876 the defendant Campbell borrowed $600 from the plaintiff at 20 per cent. interest, and, in addition to notes and a mortgage for the sum borrowed, gave five notes, of $60 each, secured by mortgage on real estate in Johnson county. Said notes are alike, except as to the time of payment, and are in the following form: “$60. Tecumseh, Neb., Feb'y 29th, 1876. Two years after date, for value received, I promise to pay to the order of P. D. Cheney sixty dollars, payable at the office of Russell & Holmes, without interest before maturity, with 12% per annum after maturity. JAMES A. CAMPBELL.” These notes were properly indorsed by Cheney; and he claims to have sold and delivered them, before due, to one Davis, for a valuable consider ation. The subsequent death of Davis is also alleged, and the appointment of Cheney as executor under his will. The allegations of the petition on that point are as follows: “Plaintiff avers that before the said notes, or either of them, became due, the same were, by indorsement of said P. D. Cheney, for a valuable consideration, indorsed, assigned, transferred, and delivered to the said Wm. G. Davis, in the life-time of the said Wm. G. Davis, who was the lawful holder and owner of said notes during his life-time; and that said Wm. G. Davis departed this life on or about December 25, A. D. 1879, leaving said notes among the assets and effects of the estate of the said Wm. G. Davis, deceased, and that afterwards, to-wit, January, 1880, this plaintiff was duly and lawfully appointed executor of the said estate of Wm. G. Davis, as will more fully appear by reference to the certified copy of the letters testamentary herewith annexed.” To this petition Campbell filed an answer, in which he pleaded-- First, usury, and want of consideration; and, second, the statute of limitations. On the trial of the cause the court found the issues in favor of the defendant, and dismissed the action.

The summons served on the defendant was issued on the 9th day of February, 1888, so that, under the provisions of sections 6 and 19 of the Code of Civil Procedure, but one of said notes was barred by the statute when the action was brought, viz., the first. The limitation in an action to foreclose a mortgage on real estate is 10 years. This question has been so often decided by this court that it is unnecessary again to review it. For the purpose of foreclosure, the notes continued as evidence of the debt for 10 years from the time they became due....