Garnett v. Myers

• Decision Date: 01 July 1902
• Citation: 65 Neb. 280,91 N.W. 400
• Parties: GARNETT v. MYERS ET AL.
• Court: Nebraska Supreme Court

65 Neb. 280

91 N.W. 400

GARNETT

v.MYERS ET AL.

Supreme Court of Nebraska.

July 1, 1902.

Syllabus by the Court.

1. A note, and mortgage securing it, made contemporaneously, are to be construed together as to all persons chargeable with notice of their contents and their relation to each other.

2. If the maker of a negotiable note pays the same to one who does not and cannot produce the paper, he thereby assumes the burden of proving that the party to whom he pays the money is the owner of the paper, or the agent of the owner authorized to receive the money for him.

3. The agreement, in a mortgage, to pay “all the taxes and assessments levied upon said premises and all taxes and assessments levied upon the holder of the mortgage for and on account of the same,” will not render the note which it is given to secure nonnegotiable.

Appeal from district court, Antelope county; Robinson, Judge.

Action by Jeremiah Garnett against James A. Myers and others. Judgment for defendants, and plaintiff appeals. Reversed.

C. C. Flansburg and Chas. Riley, for appellant.

N. D. Jackson, for appellees.

SEDGWICK, J.

This action was brought to foreclose a real estate mortgage. The trial court found for the defendants, and entered a decree accordingly. The plaintiff brings the record here on appeal. It is conclusively established by the evidence that on the 31st day of July, 1889, the defendants Myers and wife executed, and delivered to the Globe Investment Company, their note for $550, and the mortgage sought to be foreclosed to secure the payment of said note; that on the 19th day of September, 1889, the Globe Investment Company indorsed the note in blank, executed an assignment in blank of the mortgage, and for a valuable consideration, and in the usual course of business, sold said note and mortgage, and delivered the same, with said assignment, to John Stuart & Co., Limited, who afterwards, in the same year, without further indorsement or assignment in writing, in the same manner, and for a valuable consideration, sold the note and mortgage, and delivered the same, with the said assignments, to the plaintiff. The assignment of the mortgage was never filed for record, nor recorded, in the county where the land lies. Afterwards, and before the payment hereinafter mentioned, the mortgagors conveyed the mortgage premises to the defendant Henry Woerdhoff, subject to the mortgage, who, in August, 1894, without any notice or knowledge that the Globe Investment Company had transferred the note and mortgage, paid the mortgage debt to said company.

It is insisted that the contract upon which this action was brought is not negotiable, and that, as the mortgagor had no notice of the assignment, payment to the original mortgagee is a satisfaction of the claim. The note, otherwise in the usual form of a promissory note, has the following memorandum upon its face: “This note is secured by a first mortgage on the N. W. 1/4 sec. 7, Tp. 23, R. 6 west, 6th P. M., Antelope county, Nebraska.” And the mortgage contains, among other things, the following provisions: “The said parties of the first part hereby agree to pay all the taxes and assessments levied upon the said premises, and all taxes and assessments levied upon the holder of this mortgage for and on account of the same, when the same are respectively due; and, if not so paid, the said party of the second part, or the legal holder or holders of said note, may, without further notice, declare the whole debt hereby secured due and payable at once, or may elect to pay such taxes or assessments; and the amount so paid shall be secured by this mortgage, and may be collected in the same manner as the principal debt hereby secured, with interest at the rate of ten per cent. per annum. But whether the legal holder or holders of said note elect to pay such taxes, assessments, or not, it is distinctly agreed that the legal holder or holders of said note may declare the debt hereby secured due, and immediately cause this mortgage to be foreclosed.”

These two instruments, having been executed at the same time and transferred together, must be construed together. See Consterdine v. Moore (decided herewith) 91 N. W. 399;Association v. Moore, 40 Neb. 686, 59 N. W. 115;Seieroe v. Bank, 50 Neb. 612, 70 N. W. 220. The long-established and general rule is that,...