Lawson v. Warren

• Decision Date: 19 March 1912
• Docket Number: Case Number: 1682
• Citation: 1912 OK 261,34 Okla. 94,124 P. 46
• Parties: LAWSON, Receiver, v. WARREN.
• Court: Oklahoma Supreme Court

1912 OK 261
124 P. 46
34 Okla. 94

LAWSON, Receiver,
v.
WARREN.

Case Number: 1682

Supreme Court of Oklahoma

Decided: March 19, 1912

Syllabus

¶0 1. MORTGAGES--Assignment of One Note of Series--Priority of Assignee. Where a person holding all of a series of notes secured by mortgage assigns one of them, the assignee is entitled to be preferred to the assignor and the receiver of the assignor in the distribution of the proceeds of the mortgaged property.

2. RECEIVERS--Title to Property--Interest Acquired. A receiver holds the property coming into his hands by the same right and title as the person for whose property he is receiver, subject to liens, priorities, and equities existing at the time of his appointment.

Error from District Court, Logan County; A. H. Huston, Judge.
Action by Frank L. Warren against Lewis C. Lawson, Receiver, and others. Judgment for plaintiff, and Lawson brings error. Affirmed.

C. Dale Wolfe, for plaintiff in error.

Warren & Miller, for defendant in error.

ROSSER, C.

¶1 This suit was brought by Frank L. Warren against Robt. M. Lee, Guy Gamble, E. E. Nolen, and Lewis C. Lawson, as receiver of certain assets of the Arnold Mercantile Company, to recover on a certain note for the sum of $ 1,500 secured by vendor's lien on certain property in the town of Coyle, Okla. The petition alleges that Robt. M. Lee bought the property in Coyle from Gamble and Nolen, paying therefor $ 2,000 in cash, and giving two notes for the sum of $ 1,500 each, due, respectively, October 1, 1908, and October 1, 1909; that the notes were assigned to the Arnold Mercantile Company of Yeager, Okla., before maturity; and that the Arnold Mercantile Company indorsed the note due October 1, 1908, to Frank L. Warren, the plaintiff. It is further alleged that Lewis C. Lawson, as receiver of certain assets of the Arnold Mercantile Company, holds the other note. A foreclosure of the vendor's lien is prayed for, and also judgment against Robt. M. Lee, the maker of the note for $ 1,500, and that the proceeds of the property upon which the vendor's lien was retained be applied, first, to the note held by plaintiff, and, second, to the second note held by Lewis C. Lawson.

¶2 The evidence shows that the note sued upon was the first of the two notes coming due, and was assigned by the Arnold Mercantile Company to Frank L. Warren, before maturity, as collateral security for claims which he had for collection against that company. Within a few days after the assignment of the note to Warren, Lewis C. Lawson was appointed receiver to collect the second of the two notes. Judgment was rendered for plaintiff against Lee for the amount of the note with interest and attorney fee, and also foreclosing the vendor's lien on the property in Coyle, and ordering it sold, and ordering that the proceeds be applied, first, to the payment of the note held by Warren, upon which judgment had been entered, and the balance upon the note held by the defendant, Lawson.

¶3 The sole question presented in this case is as to whether or not the first of the two notes, which was assigned to Warren, upon which suit was brought, is entitled to priority, or to be first paid out of the proceeds of the property for the price for which it was given.

¶4 The question of priority of a series of notes secured by one mortgage or vendor's lien, when in the hands of different parties, is a question upon which there is great diversity of opinion among the courts, and it would not serve any good purpose to undertake to collect and weigh all the authorities bearing upon this question. The following extract from the case of Penzel v. Brookmire, 51 Ark. 105, 10 S.W. 15, 14 Am. St. Rep. 23, will show the extent of the divergency of views upon this subject, and also the reasons given for the various views maintained by the courts:

"In the absence of such stipulation or agreement, or special equities, the authorities are not agreed as to how the proceeds of the sale of property, mortgaged to secure the payment of several notes and sold under the mortgage, shall be appropriated, when the notes secured mature at different times, have been assigned to different persons, and the proceeds are not sufficient to pay all of them. One class holds that the notes shall be paid in the order of their assignment (McClintic v. Wise, 66 Va. 448 [18 Am. Rep. 694]; Cullum v. Erwin, 4 Ala. 452; Griggsby v. Hair, 25 Ala. 327; Waterman v. Hunt, 2 R.I. 298); another, that the notes should take precedence in the order of their maturity (Mitchell v. Ladew, 36 Mo. 526, 530 [88 Am. Dec. 171]; Sargent v. Howe, 21 Ill. 148; Vansant v. Allmon, 23 Ill. 30; Koester v. Burke, 81 Ill. 436; State Bank v. Tweedy, 8 Blackf. [Ind.] 447 [46 Am. Dec. 486]; Doss v. Ditmars, 70 Ind. 451; Marine Bank v. International Bank, 9 Wis. 57, 64; McVay v. Bloodgood, 9 Port. [Ala.] 547; Richardson v. McKim, 20 Kan. 346, 450; Hinds v. Mooers, 11 Iowa 211; Walker v. Schreiber, 47 Iowa 529; Wilson v. Hayward, 6 Fla. 171, 190; Kyle v. Thompson, 11 Ohio St. 616; Winters v. Franklin Bank, 33 Ohio St. 250); and a third class that the proceeds should be applied pro rata in part payment of the several notes, irrespective of their dates of maturity or assignment (Donley v. Hays, 17 Serg. & R. [Pa.] 400, 404; Cowden's Estate Appeal, 1 Pa. 267; Mohler's Appeal, 5 Pa. 418, 420 [47 Am. Dec. 413]; Perry's Appeal, 22 Pa. 43 [60 Am. Dec. 63]; Grattan v. Wiggins, 23 Cal. 16; Dixon v. Clayville, 44 Md. 573, 578; English v. Carney, 25 Mich. 178, 181; McCurdy v. Clark, 27 Mich. 445, 448; Parker v. Mercer, 7 Miss. 320, 6 How. 320, 324 [38 Am. Dec. 438]; Cage v. Iler, 5 Smedes & M. [Miss.] 410 [43 Am. Dec. 521]; Pugh v. Holt, 27 Miss. 461; Andrews v. Hobgood, 69 Tenn. 693, 1 Lea 693; Exchange Bank v. Beard, 49 Tex. 358; Delespine v. Campbell, 52 Tex. 4; Wilson v. Eigenbrodt, 30 Minn. 4 [13 N.W. 907]).

"The authorities which hold that the notes should be paid in the order in which they were assigned do so upon the ground that the debt secured was the principal and the mortgage an accessory, and that the transfer of a part of the debt carried with it the assignment of so much of the lien created by the mortgage as is necessary to pay the part assigned as effectually as it existed in the mortgage, and that no second assignment can

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