Garnett v. Meyers
| Decision Date | 22 April 1903 |
| Parties | JEREMIAH GARNETT, APPELLANT, v. JAMES A. MEYERS ET AL. APPELLEES |
| Court | Nebraska Supreme Court |
AFFIRMED.
In the former opinion in this case (ante, page 280) it was held that the provisions there quoted from the note and mortgage did not destroy the negotiability of the note. A rehearing was allowed mainly for the consideration of that question. The oral arguments on this hearing were largely devoted to two propositions:
1. Should the conditions of the mortgage as distinguished from those in the note itself be held to affect the negotiability of the note? Upon this question we are entirely satisfied with the views expressed in the former opinion. If the terms and conditions of the mortgage are limited to the proper province of the mortgage--that is, to provide security for the indebtedness--its provisions relating solely to the security will not affect the negotiability of the note. If the holder of the note is compelled to pay the taxes or insurance on the mortgaged property to protect the security, and is afterwards allowed to recover the amount so paid in addition to the principal indebtedness this does not affect the amount of the indebtedness itself. The mortgagee has no interest in the mortgaged property except a collateral and contingent one. The liability for these expenses is upon the mortgagor. If he shirks this responsibility and compels the mortgagee to assume it, equity allows the mortgagee to add the payment so made to his mortgage. This right has long been established as an essential element of the mortgage itself. It can not be held to destroy the negotiability of the note, unless the fact that the execution of the note is accompanied by the execution of a mortgage securing it is to have that effect. This principle applies to all agreements of the mortgagor to preserve the collateral security. It does not affect the rule that the two instruments when executed at the same time must be construed together. The provisions contained in the mortgage to protect the securities, which would be implied and enforced upon settled principles of equity whether expressed in the mortgage or not, can not be held to render the note non-negotiable. As shown in the former opinion, provisions as to the indebtedness itself should properly be, and generally are, expressed in the note. If agreements in regard to the indebtedness are inserted in the accompanying paper executed at the same time with the note, and as a part of the same transaction, they must be construed with the note. If such agreements render the amount that the holder of the note can demand on the indebtedness itself uncertain, the note is non-negotiable in the hands of one who takes it with notice. The reasonableness of this rule would probably not be doubted in case the accompanying paper was not a mortgage, but was executed for the sole purpose of modifying the terms of the note, or to make its payment depend upon conditions expressed in the accompanying paper. The reason seems to be equally apparent when modifications of the terms of the note or limitations imposed upon the collection of the indebtedness itself are inserted in the accompanying mortgage. Such provisions...
To continue reading
Request your trial
-
Farmers' Nat. Bank of Tecumseh v. Mccall
...Co., 93 Mo. App. 123; Railway v. Bank, 136 U.S. 268; Carpenter v. Longan, 16 Wall. 271; Owings v. MacKenzie, 133 Mo. 323; Garnet v. Myers, 65 Neb. 280, 94 N.W. 803; Consterdine v. Moore, 65 Neb. 291, 96 N.W. 102; Allen v. Dunn, 71 Neb. 831; Pomroy v. Rice, 16 Pick. 22; Watkins v. Hill, 8 Pi......
-
Todd v. State Bank of Edgewood
...Pac. 883;Consterdine v. Moore, 65 Neb. 291, 91 N. W. 399, 96 N. W. 1021, 101 Am. St. Rep. 620;Garnett v. Myers, 65 Neb. 280, 91 N. W. 400, 94 N. W. 803;Zebley v. Sears, 38 Iowa, 507. There is still another angle from which this feature of the case may be considered. Defendant, as assignee o......
-
Farmers' Nat. Bank of Tecumseh v. McCall
...also seem to be in accordance with the rule announced above as appearing to be supported by the weight of authority. Garnett v. Meyers, 65 Neb. 280, 94 N.W. 803; Consterdine v. Moore, 65 Neb. 291, 91 N.W. 399, Am. St. Rep. 620; Allen et al. v. Dunn et al., 71 Neb. 831, 99 N.W. 680. See, als......
-
War Finance Corporation v. Thornton
...did make his payments patent where, before, the fact was in a measure concealed. However, when this court, in the cases of Garnett v. Myers, 65 Neb. 287, 94 N.W. 803, Consterdine v. Moore, 65 Neb. 296, 96 N.W. 1021, Allen v. Dunn, 71 Neb. 831, 99 N.W. 680, announced and established the rule......