Porter v. Ourada

• Decision Date: 05 May 1897
• Citation: 51 Neb. 510,71 N.W. 52
• Parties: PORTER v. OURADA ET AL.
• Court: Nebraska Supreme Court

51 Neb. 510

71 N.W. 52

PORTER

v.OURADA ET AL.

Supreme Court of Nebraska.

May 5, 1897.

Syllabus by the Court.

1. Ourada gave his note to Toncray, due in five years, payable to his order, and secured the same by real-estate mortgage. Toncray sold and delivered the note and mortgage before their maturity to Porter, but he did not record the mortgage assignment. Afterwards a trust company took a mortgage from Ourada on the real estate to secure its loan of $1,700 to him. Instead of paying the money to Ourada, the trust company retained it, and promised therewith to pay off the Toncray mortgage debt, having then two years to run. The trust company paid the Toncray mortgage debt to him, and caused him to release his mortgage of record, without notice that such mortgage debt was then owned by Porter. Toncray was not Porter's agent, and embezzled the money. After the recording of the Toncray release and the trust company's mortgage, Stibal in good faith purchased, subject to the trust company's mortgage, the real estate, and parted with a valuable consideration therefor, without notice, actual or constructive, of Porter's ownership of the Toncray mortgage debt, or that his release of said mortgage was unauthorized. Porter then brought suit to foreclose the Toncray mortgage, making Stibal and the trust company defendants. Held, that Stibal's title was not incumbered with the Porter mortgage. Whipple v. Fowler, 60 N. W. 15, 41 Neb. 675, followed. (2) That the record of the Toncray mortgage was notice to the trust company that it secured a debt evidenced by negotiable paper, and that it paid this debt to Toncray at its peril without receiving from him at the time the surrender of such paper. (3) That the promise made by the trust company to Ourada to pay the Toncray mortgage was a promise made for the benefit of the legal owner and holder of the debt secured by such mortgage. (4) That Porter was entitled to be subrogated to the lien which the trust company had on the land to the extent of the amount due and unpaid on the mortgage purchased by him of Toncray.

2. The mere fact that a mortgagee has been in the habit of collecting interest from the mortgagor, and remitting it to an assignee of the mortgage, is not alone sufficient to authorize the conclusion that the mortgagee's agency was such as to authorize him to collect the entire unmatured mortgage debt. Stark v. Olsen, 63 N. W. 37, 44 Neb. 646.

3. Where one of two innocent parties must suffer a loss, he whose negligence caused the injury should bear it.

Appeal from district court, Colfax county; Sullivan, Judge.

Action by Henry M. Porter against Adam Ourada and others. From a judgment of dismissal, plaintiff appeals. Reversed.Loomis & Abbott, for appellant.

Phelps & Sabin, for appellees.

RAGAN, C.

This is an appeal of Henry M. Porter from a decree of the district court of Colfax county dismissing his suit brought to foreclose a real-estate mortgage.

1. There is little, if any, conflict in the evidence. The material facts are as follows: In January, 1887, Adam Ourada owned certain real estate in Colfax county. On the 31st day of January of said year Ourada became indebted to one C. H. Toncray in the sum of $850. As an evidence of said debt, Ourada and his wife executed and delivered to Toncray a note for said sum of money, payable to the order of said Toncray at a bank in Fremont, Neb., where Toncray resided. This note matured on the 1st day of February, 1892, and drew interest at the rate of 7 per cent. per annum from February 1, 1887, until maturity; such interest payable semiannually, and evidenced by 10 interest notes or coupons of $29.75 attached thereto, each payable to Toncray, and at the same place of payment as the principal note. The principal bond and the coupons were secured by a real-estate mortgage executed by Ourada and wife on the 31st day of January, 1887, and duly recorded in the office of the register of deeds of said Colfax county on the 8th of February, 1887. Soon after the recording of this mortgage, Toncray sold, indorsed, and delivered in the usual course of business the principal note and interest notes to Henry M. Porter, and delivered to him the mortgage securing the same. It does not appear that Toncray ever executed any formal assignment in writing of the mortgage securing these notes. At all events, if such an assignment was executed, it was never filed of record in the office of the register of deeds of Colfax county. Until May, 1890, Ourada appears to have made his interest payments as they matured to Toncray, and he appears to have remitted them to Porter's agent. In May, 1890, Ourada made application to the appellee the Central Loan & Trust Company (hereinafter called the “Trust Company”) for a loan upon this land. The trust company agreed to and did make Ourada a loan of $1,700, and to secure the same took a mortgage...