Kerby v. Wade

Wood, J., (after stating the facts). The mortgage recites, among other things, as follows: “The sale is on the condition that, whereas, I am justly indebted unto the said G.. Henry Green and W. A. Parker in the sum of one hundred dollars, evidenced by a note of even date herewith, due after date with interest. “Now, if I shall pay said moneys, at the times and in the manner aforesaid, then the above conveyance shall be null and void, ” etc. The mortgage was dated November 11, 1908. The alleged assignment was January 9, 1909. It will be observed that the mortgage recites that the note which it was executed to secure was “due after date.” According to the mortgage, therefore, there was no date fixed for the maturity of the note which it was given to secure. It was not even due on demand; at least, it could not be considered as anything more than demand paper, if that. It is true, appellee Wade, in one part of his deposition, stated that “the mortgage was to come due the 1st of November, ” in 1909, but other parts of his testimony show that the note was to be paid when the loan was procured for him by Green and Parker, and there was no time fixed when that loan should be procured. It was to be procured for him as soon as possible. Now, the mortgage was incident to the debt, and could not have been dúe after the debt which it was given to secure was due. The mortgage was subject to foreclosure at and after the time when the note became due, whenever that was. Inasmuch as the mortgage did not name ány date for the maturity of the debt which it was given to secure, it was so peculiar and out of the ordinary course in this respect as to put appellant upon inquiry, which, if pursued, would have disclosed circumstances to prove that the note was past due. The mortgage itself and the testimony of appellee Wade with reference thereto were sufficient to warrant the court in finding that appellant purchased the mortgage (if he did purchase it) after the debt which it was given to secure was past due, and that therefore appellant was not an innocent purchaser for value. Appellant was notified by the mortgage itself that at most he could only be purchasing a security for demand paper. “It now seems to be definitely settled, at least in this country,” says Mr. Tiedeman, “that demand paper is overdue if it remains unpaid for an unreasonable time after its date or the date of delivery. ” Tiedeman on Bills and Notes, § 108. See also, Daniel & Douglass’ Elements of the Law of Negotiable Instruments, § 240, citing 1 Parsons on Notes and Bills, § § 263, 264. The circumstances under which this note was executed show that it was past due when appellant purchased the mortgage, and he therefore took it subject to any defects that might have been set up by the maker as against the payee. It could serve no useful purpose to set out and discuss in detail the evidence concerning the fraudulent execution of the mortgage. It sufficeth to say that we have examined it carefully and are of the opinion that the court was fully warranted in holding the same to be fraudulent and void. The judgment is affirmed.