Court Opinion

ID: 3435125
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:07:48.113664+00
Date Added: 2024-06-11T13:48:17.779618
License: Public Domain

I concur in the affirmance of the judgment below. I do so on the ground that the *Page 170 
result thus reached is clearly consistent with the intent of the original parties to the contract, as indicated by the terms of the contract itself; whereas the contrary result would clearly be a perversion of the purpose of such original parties. Though the mortgage is somewhat profuse and confusing in its terms, and perhaps contradictory to some extent, yet it contains a proviso which purports to put an interpretation upon the scope of the mortgage as relating to other indebtedness than the $1200 note. This proviso purports to secure any "claims held by the mortgagee against the mortgagors or either of them for any future loans, advances or indebtedness accruing from said grantors or their assigns to said grantee or his assigns," etc. The mortgage did not in terms purport to secure any other presently existing
indebtedness than the $1200 note. In addition to the $1200 note it did purport to secure "future indebtedness accruing from said grantors." Clearly this proviso contemplated a future meeting of the minds of the parties to the contract upon the accrual of the future indebtedness. So far as the presently existing indebtedness was concerned, the minds of the parties met only upon the $1200 note. So far as future indebtedness was concerned, the meeting of the minds was incomplete and contingent upon a future meeting of such minds upon the creation of such future indebtedness. There was no expression of intent of the parties to extend the security of the mortgage to presently existing indebtedness owing by the mortgagors to third parties. The $1500 note was a presently existing debt owing by one mortgagor to Armstrong, but the mortgagee Pence had no interest therein or perhaps knowledge thereof. Clearly the security of said $1500 note was not within the contemplation of either party to the mortgage at the time it was made. If this note was not within the contemplation of the parties to the mortgage at the time it was made, it could not come within such contemplation later except by a meeting of the minds of the parties thereon. If, after the mortgage had been made, a note had been executed for indebtedness created since the execution of the mortgage, then the minds of the parties would have met in the creation of the indebtedness and would fit into the terms of the mortgage, which provided for such a contingency. The enlarged scope of the mortgage which is sought to be established by the appellant, originated not in the minds of the parties to the mortgage, but *Page 171 
in the mind of a stranger thereto, who while still a stranger to the mortgage, conceived a scheme whereby the $1500 note held by Armstrong might be brought within the apparent terms of the mortgage. No interest of either party to the mortgage was subserved by this scheme. Having carried out the scheme the appellant claims the status of an innocent purchaser for value. Purporting to occupy such status, he claims to be bullet-proof against defenses which the mortgagor might have interposed against the mortgagee. As purchaser and owner of the two notes acquired from Pence and from Armstrong respectively, we may accord to him the status, which he claims. Such status affords him no leverage in his attempt to enforce the scheme inaugurated by him. His status as a holder in due course under the N.I.L. or as the purchaser of property under the Recording Acts operates no further than to protect his title to the property, which he has purchased. He purchased for value the $1200 note. Such purchase carried with it the security therefor. His title to such note is not assailed; nor is his security therefor challenged. He purchased from Armstrong the $1500 note. Armstrong had no security therefor. The purchaser therefore acquired no security by the purchase. His title to the $1500 note thus acquired from Armstrong is not challenged. This is as far as the N.I.L. or the Recording Acts can carry him. But appellant is unwilling to stop here. His further claim is that the mortgage given to secure the $1200 note contained certain additional contractual provisions, which are operative in his favor and which entitle him to bring his $1500 note within the scope of the $1200 mortgage. If he has such right, it is not a Negotiable Instrument in his hands, nor is it included within any provision of the Recording Acts. If he holds such a right, he holds it as a mere assignee. As such assignee, from whom did he acquire it? Not from Pence, the mortgagee because no such right existed in favor of Pence at the time he disposed of the mortgage; not from Armstrong because Armstrong had no such right when he sold the note.
The argument for the appellant at this point must necessarily be that he acquired this right, not from his assignors and therefore not as a purchaser, but acquired the same after his purchase and because of his purchase and as the logical necessity of his purchase of both notes. This is only saying that he acquired *Page 172 
such right by virtue of his own scheme, which was participated in by neither mortgagor nor mortgagee, nor by any endorser. His scheme involved no meeting of minds. He relies wholly upon the operation of his own mind as having conferred upon him a right, which neither of his assignors ever had. Elementary it is, that the right of an assignee is limited in its scope to that of his assignor. Clearly therefore the status of the plaintiff, as an innocent purchaser for value of the two notes in question affords him no aid whatever in the enforcement of his larger scheme. No one challenges his title to the notes or denies him the security carried by the notes at the time of his purchase thereof. It is argued that this defense is simply an attempt to obtain reformation of the mortgage and that such reformation can not be had as against an innocent purchaser. If the defendants were entitled to reformation as against the mortgagee, they would be no less entitled thereto as against his mere assignee. Such, the appellant is. It may be that the question here under consideration could have been dealt with more readily in a suit for reformation. But we have no occasion to consider that question. The appellant, as plaintiff, is in a court of equity and is asking to enforce an alleged agreement, which, if such would be unconscionable, to say the least.
As already stated, there are terms in the mortgage that are confusing and more or less self-contradictory. The fact remains that it is fairly capable of the construction herein put upon it; and this is specially so in the light of the interpretative proviso above quoted. So construing the terms thereof, the plaintiff has no right to have the $1500 note included within the scope of the mortgage-security.
KINDIG, J. joins herein.