Meeker Cnty. Bank v. Young
| Citation | 51 Minn. 254,53 N.W. 630 |
| Parties | MEEKER COUNTY BANK v YOUNG ET AL. |
| Decision Date | 11 November 1892 |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
(Syllabus by the Court.)
When a party indorses and transfers to another a negotiable promissory note secured by mortgage upon real property, he, as between the parties, transfers the debt, and equitably assigns the security, although both debt and security exist in a different form from what the parties to the transaction supposed.
Appeal from district court, Meeker county; POWERS, Judge.
Action by the Meeker County Bank to establish a trust in its favor of certain real estate held by Austin H. Young, as receiver of the firm of Stevens & Co., and to determine the adverse claims of Young and another to the real estate. The material facts alleged in the complaint are stated in the opinion. Defendants demurred to the complaint on the ground that the same did not state facts constituting a cause of action. From an order overruling the demurrer, defendants appeal. Affirmed.
A. H. Young and Frank M. Nye, for appellant.s
U. L. Lamprey and H. C. James, for respondent.
From the allegations of the complaint herein it appears that defendant Young is the receiver of the insolvent firm of Stevens & Co., of which one Branham was a member. Plaintiff bank loaned money to Branham, really for the use and benefit of said firm; and as security he indorsed and placed in plaintiff's hands three negotiable promissory notes, made by one Chevre, payable to Branham's order, secured by a real-estate mortgage, which fact appeared on the face of the notes. It was represented by Branham, and understood by both parties at the time, that the indorsement and transfer of the notes would carry and convey the mortgage security to the indorsee; but it was agreed that thereafter the mortgagee, Branham, should execute and deliver such legal transfer or assignment of the mortgage as plaintiff might require. A formal assignment was afterwards demanded, but was not obtained. The fact was-the plaintiff being ignorant of it- that the mortgage had been foreclosed some six months prior to the hypothecation of the notes, and the mortgaged premises had been bid in at the foreclosure sale by Branham for the full amount of the debt thereby secured. The latter died soon afterwards. There was no redemption from the sale, and the legal title to the premises then vested in his heirs at law, against whom this defendant, as receiver, brought an action, in which it was duly determined and adjudged that the Chevre notes and mortgage were the property and assets of the firm of which Branham had been a member; that they had been obtained and held by him for the use and benefit of the firm, and, as between the parties to that action, the property acquired by means of the foreclosure had passed to this defendant Young, as receiver. The present action was brought against him and the surviving member of the insolvent firm...
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