Stark v. Olsen

• Decision Date: 05 April 1895
• Citation: 44 Neb. 646,63 N.W. 37
• Parties: STARK v. OLSEN ET AL.
• Court: Nebraska Supreme Court

44 Neb. 646

63 N.W. 37

STARK

v.OLSEN ET AL.

Supreme Court of Nebraska.

April 5, 1895.

Syllabus by the Court.

1. On the 13th day of March, 1886, in Cedar county, this state, O. and wife executed and delivered a mortgage conveying lands in said county to D., a resident of Iowa, to secure a loan made by the latter, a loan broker, in the usual course of business. Held, in the absence of evidence explanatory of the transaction, the presumption is that the payment of the proceeds of the loan and the delivery of the note and mortgage were contemporaneous acts, and that the note is not an Iowa contract, although it appears from its face to have been executed in that state 12 days previous to the execution of the mortgage.

2. In the absence of evidence to the contrary, laws of other states will be presumed to be the same as ours.

3. Such presumption applies not alone to the written, but as well to the unwritten, laws of other states.

4. A note otherwise in form negotiable will not be held nonnegotiable by reason of a provision therein for an attorney's fee in case suit is brought thereon to enforce collection.

5. Nor will a note be held nonnegotiable on account of the following condition: “If default be made in the payment of any interest coupon, said principal sum may, at the option of the holder of this note, become due and payable without further notice.” Heard v. Bank, 8 Neb. 10.

6. In an action of foreclosure it appeared that O., the defendant, borrowed money of D., and executed a note therefor to D.'s wife, secured by an instrument denominated a “mortgage” or “trust deed,” in which D. was named as trustee, with power to reconvey on payment of the note at maturity. On the day of its execution D. indorsed said note in the name of his wife, and forwarded it to his correspondent in Boston, by whom it was, on the day of its receipt, sold and indorsed for value accompanied by the mortgage to C. J. S., through whom, by will duly proved, the plaintiff claims title. It was the custom of D. to take securities payable to his wife's order, and dispose of them through Eastern brokers by indorsement in her name with her knowledge and consent. Held sufficient evidence of title as against the mortgagor.

7. Section 39, c. 73, Comp. St., providing that “the recording of an assignment of a mortgage shall not be deemed notice of such assignment to the mortgagor * * * so as to invalidate payments made by him to the mortgagee,” has no application to the holder of negotiable securities, whose title was acquired before maturity,for value, in the usual course of business. Eggert v. Beyer (Neb.) 62 N. W. 57.

8. Where a trustee is invested with the apparent title to property, persons dealing with him are not chargeable with undisclosed limitations upon his power with respect to the subject of the trust. But where his powers are clearly defined by deed or other instrument creating the trust, duly filed or recorded in conformity with the registration laws, persons dealing with him in respect to the trust property must, at their peril, take notice of the extent of such power.

9. Agency with power to acknowledge satisfaction of a mortgage before maturity will not be presumed as against a bona fide holder from the mere fact that the mortgagee, who had disposed of the security in the usual course of business, forwards to his correspondent, at whose office it is payable, funds for the satisfaction of interest coupons.

Appeal from district court, Cedar county; Norris, Judge.

Action by C. F. M. Stark against Magnus Olsen and others to foreclose a mortgage. Judgment for defendants, and plaintiff appeals. Reversed.

Barnes & Tyler, for appellant.

Gooding & Weed and Carter & Brown, for appellees.

POST, J.

This is a proceeding for the foreclosure of a mortgage or trust deed executed by the appellees Olsen and wife covering certain lands in Cedar county. In addition to the mortgagor and wife, the Lombard Investment Company and Andrew Berggen were named as defendants, but, as their rights are not involved in this appeal, they will not be noticed further in this opinion. The mortgage, which was acknowledged before a notary public of Cedar county on the 13th day of March, 1886, was given to secure payment of the note of Olsen, purporting to have been executed at Le Mars, Iowa, March 1, 1886, for $1,500, payable to the order of P. M. Dunn at Boston, Mass., March 1, 1891, with interest from date at 7 per cent., payable semiannually, as evidenced by coupons attached thereto. Said mortgage or trust deed was executed to J. M. Dunn as trustee for P. M. Dunn, the payee of the note above described, and provides that the said trustee shall have power to reconvey said premises whenever said principal note and interest coupons are fully paid to the said P. M. Dunn or her assigns. In this connection it should be mentioned that J. M. Dunn, who is named as trustee in said mortgage, was, at the time of the execution thereof, engaged in making loans at Le Mars, and negotiating the notes and mortgages taken in the course of his business through brokers in New York, Boston, and elsewhere. It was customary for him to name P. M. Dunn, his wife, as payee of notes so taken, and to indorse them, when disposed of, in her name. She had no knowledge of the note and mortgage in this case, but the practice of her husband in thus dealing in her name is shown to have been with her knowledge and consent, if not, indeed, with her express approval. It should be mentioned, also, that she has so far ratified his action with respect to the transaction here involved as to disclaim any interest in the note or mortgage. On the 16th day of March, 1886, J. M. Dunn forwarded said note and mortgage to the firm of John Jeffries & Sons, brokers doing business in Boston, with directions to sell the same, and remit the proceeds thereof through his correspondent in New York. The note at that time bore the following indorsement, executed by J. M. Dunn: “Without recourse, I hereby sell, transfer, and set over to John Jeffries & Sons the within note and annexed coupons, together with all my rights and interest under the trust deeds securing the same. P. M. Dunn.” On the 11th day of March, 1886, the plaintiff, C. F. M. Stark, then acting as agent for his mother, Mrs. C. J. Stark, applied to Jeffries & Sons for investments, and was furnished with a list of securities held by them for sale, including this mortgage, of which they had been previously advised by Dunn. Said mortgage was selected by Mr. Stark, among others, and the agreed price therefor, $1,502.91, left with the brokers named as a special deposit until the receipt of the note and mortgage, which was on the 20th day of the same month, and on which day they were delivered to the purchaser, said note bearing the indorsement of Jeffries & Sons, identical in form with that above set out, although no written assignment of the mortgage by the said P. M. Dunn, or in her name, was made at that time. Previous to the commencement of this action, Mrs. Stark died, and by her will, which was duly proved, the plaintiff, her only heir and sole devisee, was named as sole executor. The latter, deeming an assignment of the note essential in order to perfect his title, as executor indorsed the same without recourse to George K. Barstow, a clerk in the office of Jeffries & Sons, by whom it was immediately in the same manner indorsed and transferred to him, accompanied by the mortgage. The foregoing history of the transactions upon which the plaintiff's title depends is essential to an understanding of the issues presented, as will hereafter appear. It is deemed necessary to here notice some of the allegations of the answer of Olsen and wife, viz.: (1) That on or about December 8, 1888, they paid to P. M. Dunn, and J. M. Dunn, trustee, the full amount of said note, with interest; and that the said P. M. Dunn and J. M. Dunn, trustee, executed and delivered to them a release in writing, whereby they acknowledged satisfaction in full of the said mortgage. (2) That no assignment of said mortgage had ever been filed for record in Cedar county, and that they had no knowledge or information that it had been assigned to or was owned by any person other than the mortgagee. (3) An express denial of the assignment by P. M. Dunn, and an allegation that the pretended assignment in her name by J. M. Dunn was unauthorized and void. (4) That the said J. M. Dunn was, at the date of the alleged payment by the defendants, the general agent of the plaintiff and John Jeffries & Sons, with power to receive payment and execute a release of said mortgage in the name of the holder thereof. In support of the allegation first above mentioned they introduced in evidence a written instrument, bearing date of December 8, 1888, purporting to have been executed by P. M. Dunn and J. M. Dunn as trustee, whereby, in consideration of $100, and other good and valuable considerations, they “remise, convey, and...