Smith v. Commercial Nat. Bank

• Decision Date: 01 October 1895
• Citation: 7 S.D. 465,64 N.W. 529
• Parties: SMITH et al. v. COMMERCIAL NAT. BANK et al.
• Court: South Dakota Supreme Court

7 S.D. 465

64 N.W. 529

SMITH et al.

v.COMMERCIAL NAT. BANK et al.

Supreme Court of South Dakota.

Oct. 1, 1895.

Syllabus by the Court.

1. S., one of the plaintiffs and husband of his coplaintiff, executed a promissory note to one A., and both the plaintiffs executed a mortgage to said A. on real property situated in the city of Huron to secure said note. A. transferred said note and mortgage to one M. The plaintiffs not being able to pay M. the money due on said note and mortgage, S. arranged with a bank in Huron to advance the money to M., and the said S., and one C. as surety, executed a note to said bank for the same, and M. transferred the A. note and mortgage, leaving the name of the assignee in the assignment of said mortgage blank, and the A. note and mortgage were deposited in said bank as security for C., as surety upon said note, with the knowledge and consent of S., and in pursuance of said arrangement with said bank. This note not being paid, S. arranged with the defendant bank to advance the money to take up said note, and agreed that said defendant should take his own note and a transfer of the A. note and mortgage as security for such advance, and further agreed that the name of some officer of the bank should be inserted as assignee in the assignment of the mortgage for the benefit of the defendant bank. Thereupon the defendant remitted to the Huron bank the amount required to take up the S. and C. note and received from the latter the A. note and mortgage, in the assignment of which mortgage the name of a bank officer of the defendant was inserted, and the assignment was thereupon duly recorded. The S. note to the defendant, renewed from time to time, not being paid, the defendant proceeded to foreclose the A. mortgage in its own name by advertisement. Of this last transaction the wife had no knowledge. Held, that these transactions did not operate as a payment or extinguishment of the A. note and mortgage, and that it was competent for S. to so arrange with the defendant bank to take and hold the same as security for his note to such bank. Held, further, that the defendant bank acquired such title to the A. note and mortgage as fully authorized it to foreclose the same in its own name, and sell the mortgaged property to satisfy said S. note, given by him to the defendant bank for the advances made by it to take up the note given by S. and C. to the Huron bank.

2. A notice of foreclosure published in a newspaper having a general circulation in the county in which the mortgaged property was situated, sufficiently complies with the law of this state which provides that “notice *** must be given by publishing the same *** in a newspaper of a county where the premises intended to be sold, or some of them, are situated.”

Appeal from circuit court, Beadle county; A. W. Campbell, Judge.

Action by Lelia L. Smith and another against the Commercial National Bank of St. Paul and another. Defendants had judgment, and plaintiffs appeal. Affirmed.

T. H. Null, for appellants. F. Vollrath, for respondents.

CORSON, P. J.

This was an action to set aside a foreclosure sale of real property by advertisement, and cancel the certificate of sale. Judgment was rendered for the defendants, and the plaintiffs appeal from the judgment, taking their appeal from the judgment roll only. The case was tried by the court, and the facts as found will be briefly stated. In July, 1883, the plaintiff Smith executed a promissory note to one Avery, and to secure the same Smith and wife, coplaintiffs, executed to said Avery a mortgage on certain real estate in the city of Huron, Beadle county. In the spring of 1886 Avery transferred said note and mortgage to H. Ray Meyers. The court finds: “That in the fall of the year 1886, said H. Ray Meyers wanting his money, said Nathan T. Smith arranged with the First National Bank of Huron, in said Beadle county, as follows: Said Smith and one L. K. Church, as principal and surety, executed a promissory note to said bank for the sum of $1,380, and, to indemnify said Church in case he should have to pay the note as such surety, said Nathan T. Smith procured said Meyers to execute an assignment of said mortgage (except that the name of the assignee was left blank), and said Meyers left the said assignment, with the said Avery note and mortgage, with the First National Bank of Huron, and upon receipt of said notes and mortgage said bank paid to Meyers the full amount due him, as shown by the face of said $1,200 note with the accrued interest, being the sum of $1,380.” In the fall of 1887, the Huron bank requiring payment of the Church note, Smith proceeded to St. Paul and induced the defendant bank to advance sufficient money to take up the Church note, and he agreed with the said St. Paul bank to give his own note, and that the Avery note and mortgage should be transferred to it. The defendant bank thereupon remitted to the Huron bank the money necessary to take up the Church note, and the Huron bank forwarded to it the Avery note and mortgage. Smith caused the blank for the name of the assignee in the assignment to be filled up with the name of an officer of the defendant bank. Smith failing to pay his note to the defendant bank, that bank in 1889 proceeded to foreclose the Avery mortgage by a notice in a newspaper published at Hitchcock, about 12 miles from the city of Huron, in Beadle county. In 1890 Smith conveyed said mortgaged property to his wife, the coplaintiff, and since 1888 the plaintiffs have occupied said premises as a homestead. The court further finds that the said Avery note and mortgage have never been paid, except by the foreclosure proceedings, and that the wife had no knowledge of the transaction between Smith and the defendant bank. Upon the facts above stated, and other findings not...