Case Name: George W. Henderson vs. Barnabas Herrod
Court: High Court of Errors and Appeals of Mississippi
Jurisdiction: Mississippi
Decision Date: 1846-11
Citations: 10 S. & M. 631
Docket Number: 
Parties: George W. Henderson vs. Barnabas Herrod.
Judges: 
Reporter: Mississippi Reports
Volume: 18
Pages: 631–634

Head Matter:
NOVEMBER TERM, 1846.
George W. Henderson vs. Barnabas Herrod.
The assignment of a note secured by a mortgage carries the mortgage with it, as an incident of the note, and subrogates the assignee to all the rights of the mortgagee; such assignee therefore requires no special authority from the mortgagee to resort to the mortgage; and if such special authority be given in writing by the mortgagee of a series of notes secured by the mortgage to the assignee of the first of the series, such assignee will have no better right than an assignee by mere indorsement of any other note of the series.
It is doubtful whether the mortgagee, who holds a series of notes secured by his mortgage, can change or modify the effect of the mortgage so as to give to his assignee of the first of the series of notes a right to prior satisfaction of such note out of the mortgaged property to the exclusion of the security from the other notes.
Where a mortgage was executed to secure three notes falling due at different periods each, and the mortgagee assigned each note for value' to different persons, and all the notes had matured, it was held, on a bill filed by the holder of the first note of the series to foreclose the mortgage and subject the property to his note, that the holders of all the notes stood upon an equal footing and were each entitled to share ratably in the proceeds of the sale of the mortgaged property.
On appeal from the chancery side of the circuit court of Madison county; Hon. John H. Rollins, judge.
On the 4th of March, 1842, Barnabas Herrod filed his hill against George W. Henderson, S. D. Livingston, and A. G. For-ney, in which he states that, on the 10th of December, 1839, S. D. Livingston executed his three notes to A. G. Forney, each for the sum of $3,333.33§; the first due 1st January, 1841, and the other two on the 1st of January, 1842 and 1843, respectively ; and at the same time executed a mortgage, which was duly recorded, on certain real estate, to secure their payment. The mortgage was exhibited with the bill, was in the ordinary form, and did not stipulate that either of ,the notes should be entitled to priority of lien. On the 30th of December, 1839, Forney assigned the note first due, to Barnabas Herrod, and at the same time executed an instrument of writing, which, after reciting that Livingston had given his notes,' secured by mortgage, proceeds as follows : “ Now these presents serves to show, that I have this day'assigned to Barnabas Herrod one of the above-mentioned notes, dated 10th day of December, 1839, payable on the 1st day of January, 1841, for the sum of three thousand three hundred and thirty-three dollars and thirty-three cent's; and I wish it to be expressly understood that I do hereby authorize and empower the said Barnabas Herrod to use the aforesaid mortgage to aid him in the collection of the said note, which I have assigned to him, as fully as I could use it myself, had I not assigned it.” This assignment was not recorded. On the 9th January, 1840, being indebted to Mortz & Henderson, Forney transferred to them, as collateral security, the remaining two notes secured by the mortgage. Livingston, the maker of the notes, was insolvent, and the notes unpaid. Her-rod prays a decree of foreclosure and sale, appropriating the proceeds of the sale of the mortgaged premises in the first place to the payment of the note held by him.
Henderson, in his answer on behalf of the firm of Mortz & Henderson, sets out the demands of the firm against Forney; his transfer of the two notes to them, and insists that out of the proceeds of the mortgaged property an allowance pro rata should be made for the notes held by them. Forney being a non-resident was made a party by publication, and the bill is taken pro confesso as to him.
The cause was heard on bill, answer and exhibits. The court decreed a sale of the mortgaged premises, and directed the proceeds to be appropriated to the payment of the note held by Herrod.
Henderson sued out this writ of error.
W. R. Hilly for plaintiff in error,
cited 9 Cranch, 152-156; 2 Wheat. 3S0; 6 Monr. 192; 2 Burr. 979; Green v. Hart, 1 John. Rep. 5S0; 9 Cow. 747; 5 lb. 202; Parker v. Mercer, 6 How. 320.
William Thompson, on same side.
W. Dj-ane, for defendants in error.

Opinion:
Mr. Justice Thacher
delivered the opinion of the court.
This was a bill to foreclose a mortgage. Livingston made his three promissory notes, each for $ .333.33|, payable at different periods to Forney. Before the maturity of the first note, Forney assigned it to the appellees, and at the same time executed ^an instrument in which he empowered the appellee to use the mortgage, by which the payment of the note was secured, to aid him in the collection thereof. This instrument was not recorded, nor does it appear that the appellants had notice of it. Also, before the maturity of the first note, Forney assigned two other notes, likewise secured by the same mortgage, to the appellants. The bill shows that the appellants obtained the notes assigned to them upon good and su cient consideration. The appellee below claimed a priority of payment from the proceeds of the sale of the mortgaged premises, and the appellants claimed a ratable division. 'J'lie cause did not come up for hearing below until such a time as all the notes had matured. The court below decreed, appropriating the proceeds of the sale to the payment of the note first falling due until satisfied.
The assignment of a note secured by a mortgage carries the mortgage with it as an incident of the note, and subrogates the assignee to all the rights of the mortgagee. There is nothing in the special assignment that accompanied the first note which gives that note any preference over its fellows in the mortgage, it merely does in effect what would result by operation of law upon the assignment of the note. Indeed, it is questionable whether the mortgagee could change or modify the effect of the mortgage and exclude the security from the two last notes. The holders of the three notes stood therefore upon an equal footing, being entitled to share in the division of the proceeds of the sale ratably, and so the court below should have decreed. Parker v. Mercer, 6 How. 320; 5 S. & M. 410.
Decree reversed, and a decree directed to be entered up here in accordance herewith.