First Nat. Bank v. Vagg

• Citation: 212 P. 509,65 Mont. 34
• Decision Date: 13 November 1922
• Docket Number: 4890.
• Parties: FIRST NAT. BANK OF SACO v. VAGG ET AL.
• Court: United States State Supreme Court of Montana

212 P. 509

65 Mont. 34

FIRST NAT. BANK OF SACO v. VAGG ET AL.

No. 4890.

Supreme Court of Montana

November 13, 1922

Commissioners' Opinion.

Appeal from District Court, Valley County; H. C. Hall, Judge.

Action by the First National Bank of Saco against Frank J. Vagg and others. From judgment for plaintiff and from order denying motion for new trial, defendants appeal. Affirmed.

Dignan & Shea, of Glasgow, for appellants.

Hurly. Kline & Slattery, of Glasgow, for respondent.

FORD C.

This is an action to foreclose a mortgage. The plaintiff in his complaint alleges that a note for $700 and interest was made executed, and delivered by the defendants Vagg to the Saco Mercantile Company on October 16, 1916, indorsed by one R. P Holcomb, and on October 28, 1916, sold, assigned transferred, and delivered by the mercantile company to plaintiff, who ever since has been and is now the owner thereof; that the note has not been paid; that it is secured by a real estate mortgage, executed and delivered by the Vaggs to the mercantile company on the 28th day of October, 1916; that plaintiff is the owner of said mortgage. The defendant Federal Land Bank is joined as the claimant of some interest in, or lien upon, the mortgaged premises alleged to be subsequent to plaintiff's mortgage. Foreclosure of the mortgage is asked, as well as judgment on the note.

Defendants filed separate amended answers, each admitting the making, execution, and delivery of the note and mortgage; that the mortgage is security for the note, the indorsement of the note by Holcomb, and that the Federal Land Bank claims an interest in the mortgaged premises; denying that this interest is inferior to plaintiff's mortgage, and each denying the assignment of the note to plaintiff; that the mortgage is owned by plaintiff; and that the note has not been paid. Each defendant pleads affirmatively payment of the note; and the defendant Federal Land Bank, sets forth a note in the sum of $2,250, given to it by the defendants Vagg on the 4th day of September, 1917, secured by a mortgage of same date, upon the premises covered by the plaintiff's mortgage. The prayer of each answer is that the defendants be dismissed with their costs.

The plaintiff in its reply denies the payment of the note, admits the bank's note and mortgage, but alleges that it was taken with knowledge of plaintiff's prior mortgage, and subject thereto, and that the defendant bank had agreed to pay plaintiff's mortgage. Findings of fact and conclusions of law were made and filed by the trial court in favor of the plaintiff and judgment entered thereon, from which judgment and order denying defendant's motion for a new trial these appeals are prosecuted.

Counsel for defendants, in his brief, asserts that there are but three questions involved in this appeal: (1) Was the note mentioned in plaintiff's complaint paid? (2) under the evidence submitted, and according to the facts apparent from the various offers of proof, was the plaintiff the owner of the mortgage? or (3) was R. P. Holcomb the owner of the mortgage, and as such did he have the right to release it at any time he saw fit to do so?

The undisputed evidence in this case shows that the note for which the mortgage in question was given as security was indorsed, without recourse, to the plaintiff in this case, by the Saco Mercantile Company, on the 28th day of October, 1916, for the sum of $700, and that the plaintiff has owned and held the note ever since; that Holcomb never did own said note, or claim to own the same.

The defendant sought to prove in effect that at the same time the note was assigned to plaintiff, at plaintiff's request, an assignment of the mortgage was drawn up to the indorser, Holcomb, and delivered to the plaintiff by the mercantile company; that an officer of plaintiff told Holcomb plaintiff did not want the mortgage, and that Holcomb has satisfied the mortgage, which offer of proof was rejected and the evidence excluded by the trial court; and such ruling is assigned as error by the defendants.

The court found, among other facts, that the plaintiff is the owner and holder of said mortgage, and we think said finding is amply supported by the evidence in this case. The assignment of a debt secured by mortgage carries with it the security. Section 8261, R. C. M. 1921.

A mortgage is a conveyance within the meaning of the record laws of this state, though it is a conveyance of a chattel interest only. Title to it passes to an assignee by assignment of the debt or obligation secured by it; for the mortgage is but an incident--a security--and, independent of the debt, has no assignable quality. Such assignment is a mere nullity. Where there is no written evidence of the debt or obligation, the mortgage is evidence both of the debt and security for its payment. Nevertheless the debt is the principal thing, and the title to the mortgage must follow an assignment of it. Cornish v. Woolverton et al., 32 Mont. 456, 81 P. 4, 108 Am. St. Rep. 598. The mortgage, being a mere incident of the debt, cannot be assigned separately from it, so as to give any beneficial interest. The incident may pass by a grant of the principal, but not the principal by a grant of the incident. Jones on Mortgages (7th Ed.) § 805, p. 274. A mortgage, as distinct from the debt it secures, is not a thing of value nor a fit subject of transfer; hence an assignment of the mortgage alone, without the...