Potter v. Stransky

Lyon, J. I. The first question to be determined is, Can the plaintiff, if otherwise entitled to recover, maintain this action as surviving partner of the late firm of Williams & Potter; or should it have been brought in the name of the plaintiff and the heirs or personal representatives of the deceased members of that firm? The circuit court held that the plaintiff cannot maintain the action as such surviving partner. The ruling was doubtless based upon the language of — 241 — the assignment by Moses Miller of the note and mortgage in suit, through which the plaintiff claims. That assignment is as follows: “ In consideration of $500 to me in hand paid by Richard S. Williams, Ellis S. Potter and George 1ST. Williams, of the city and county and state of Hew York, I do hereby sell, assign, transfer and set over unto the said Williams & Potter the within indenture of mortgage, together with the note accompanying the same, for their use and benefit, hereby authorizing them to collect and, enforce payment thereof in my name or otherwise; but this assignment is made upon this express condition, that if the said undersigned shall pay to the said Williams & Potter the sum of $525 on or before the first day of [February, 1859, with interest at the rate of ten per cent., this assignment to be void, it being made for the purpose of securing the payment of the said sum of $525, with interest as aforesaid, and for no other purpose whatever.” The note given by Moses Miller to Williams & Potter, to secure which the note and mortgage in suit were assigned as collateral, was given for a debt which Miller owed that firm, and was the property of the firm. Had. the collaterals been transferred by delivery merely, there is no room to doubt that the legal title thereto would have passed to the firm, and the firm could have maintained an action upon them. Curtis v. Mohr, 18 Wis., 615, and cases cited in Vilas and Bryant’s notes. We see nothing on the face of the assignment to indicate an intention to assign them to the members of the firm as individuals, and not as copartners. Wé think that if a right of action to foreclose the mortgage under Miller’s assignment has not been defeated by the subsequent assignment to Strcmshy, that right is in the plaintiff as the surviving partner of the firm to which Miller assigned the securities. 2. The circuit court found that “ it does not appear by the proofs, that the indebtedness for which the mortgage and note were assigned as collateral security remains unpaid.” This is clearly an error. The plaintiff’ produced the note of Miller to — 242 — Williams & Potter, and testified that it had not been paid. •This testimony was not contradicted. 3. The circuit court also found that the statute of limitations had run against Miller’s note, but it does not very clearly appear what influence that finding had upon the judgment. The fact is as found, but it seems to us that it is not an obstacle to a recovery by the plaintiff. Miller’s assignment transferred to Williams & Potter all his interest in the note and mortgage assigned; and it is manifest that until he paid his note the firm could enforce any right in respect to the col-laterals which Miller could have enforced had he not assigned them. One of these rights was to foreclose the mortgage and make all he could of the mortgage debt by a sale of the mortgaged premises pursuant to the foreclosure judgment. This he might have done after the statute of limitations had run against the note, but before it had run against the mortgage. Wiswell v. Baxter, 20 Wis., 680; Kennedy v. Knight, 21 Wis., 340; Knox v. Galligan, id., 470; Edgerton v. Schneider, 26 Wis., 385. When Miller’s note became due, Williams & Potter had three causes of action to enforce its payment: first, they might have sued Miller upon the note; or, second, they might have brought an action at law upon the collateral note of Youngs & Fellows; or, third, they might h-ave proceeded to foreclose the mortgage. They have or may have lost their remedies by actions at law upon the notes; but the remedy in equity to foreclose the mortgage remains to them, or to the survivor of them. They have done no act which deprives them of that remedy. Miller, in his life-time, after the statute had run against his indebtedness to Williams & Potter, could not have maintained an action against that firm to recover those collaterals, or their value, without showing that he had paid such, indebtedness. And if he could not, the defendant Stransky cannot; for it is certain that, independent of tlie registry laws, which will be — 243 — hereafter noticed, the latter takes, by his assignment, no greater rights in respect thereto than Miller had. 4. The circuit court found that Stranslcy purchased the note and mortgage in suit in good faith and for a valuable consideration, by an instrument in writing 'entitled to record and duly recorded; and held that the assignment by Miller to Williams & Potter was therefore void as to Stranshy. This was an application to the two assignments of the registry law, as the learned circuit judge understood and construed it, giving priority to the recorded assignment to StrcmsTcy over the older unrecorded assignment to Williams & Potter. The provisions of the recording act, which are relied upon to sustain the priority of Stranshy’s assignment, are contained in sections 25, 34 and 35, ch. 86, R. S. 1858, which aré reenacted as sections 2241 and 2242 of the late revision. Section 25 provides that “ every conveyance of real estate . . . which shall not be recorded as provided by law, shall be void as against any subsequent purchaser, in good faith and for a valuable consideration, of the same real estate or any portion thereof, whose conveyance shall first be duly recorded.” Sections 34 and 35 provide that the term “ purchaser ” shall be construed' to embrace the assignee of" a mortgage, and the term “ conveyance ” shall be construed to embrace “ every instrument in writing by which any estate or interest in real estate is created, aliened, mortgaged or assigned, or by which the title to any real estate may be affected in law or equity, except wills, certain leases, and executory contracts for the sale or purchase of lands.” Had the mortgage in suit been conditioned for the payment of money, with or without covenant for payment, and unaccompanied by a note, and were Stranslcy, the assignee thereof by duly recorded assignments from Miller’s administrators to Clancy and from Clancy to him, without notice of the assignment to Williams & Potter, it is probable that, under the above provisions of the statute, the unrecorded assignment under which the plaintiff claims, would be void as to Stranslcy. — 244 — Rut the assignment to Clancy, although actually recorded, was attested by hut one subscribing witness, and was not entitled to record. It is not available, therefore, as a recorded instrument; and Stransky, who is 'compelled to make title through it, is not protected by the recording acts. To be thus protected, he must show a valid recorded chain of title from Miller. Fallass v. Pierce, 30 Wis., 443. Hence the question of priority must be determined as though none of the assignments were recorded; and in that case there can be no doubt that the first assignment is valid as against Stransky. and that the plaintiff is the owner of the note and mortgage. Moreover, the mortgage was given to secure the payment of a note. 'It is a mere incident of the note, and the transfer of the note carries the mortgage with it without formal assignment. Unless Stranshy purchased the note in good faith and for a valuable consideration, he is nota bona fide purchaser of the mortgage. When the administrator of Miller’s estate executed the assignment of the securities to Clancy, he had not possession of the securities, did not claim them as assets of the estate, and in fact did not know of their existence until Clancy gave him the information- recently before the assignment was made. The consideration of that assignment was ten dollars, and the same was expressed in the instrument. Stranshy is chargeable with notice (when he took his assignment from Clancy) that Clancy paid a nominal consideration only for the securities (which showed that they were considered valueless), and that the same were not in the possession either of the administrator or Clancy. Besides, Stranshy paid but $225 for the securities. It does not appear what the mortgaged premises are worth, but the mortgage debt at the time apparently amounted to over $1,600, and at his sale of the premises Stranslcy bid them o.ff at $1,695. If the mortgaged premises were worth that sum, $225 was a .very inadequate consideration for the mort — 245 — gage. But, however that may he, in view of the other facts above mentioned, and the further fact that Stransky took his assignment more than seventeen years after the mortgage debt became due, we are clearly of the opinion that he is not an assignee of the mortgage in good faith. If authority is necessary to sustain what seems to us so plain a proposition, the cases cited in the brief of counsel for the plaintiff abundantly sustain it. Because Stransky is not a liona fide assignee of the mortgage, as well as because of the defective execution of the assignment thereof to Clancy, it must be held that Stransky’s assignment is not protected by the registry laws. The above views are decisive of the case. It follows therefrom that the judgment must be reversed. The cause .will be .remanded with directions to the circuit court to give judgment for the plaintiff for the relief demanded in the complaint. By the Court. — ■ So ordered.