Court Opinion

ID: 6615651
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:22:11.075958+00
Date Added: 2024-06-11T15:58:31.142176
License: Public Domain

Ellison, J.
This action was brought to foreclose a mortgage executed by Nathan Bray in his lifetime, in conjunction with the plaintiff, who was then his wife, to secure a note of two thousand dollars, given to one Abner Corey. Plaintiff, in a way not shown by the evidence, becomes the holder of this note and brings this action. The court gave judgment for defendants, and she appeals. On Bray’s death, Julian was appointed his administrator. The mortgage in suit was not recorded for some time after its execution. After giving this mortgage Bray sold the land included therein to James B. Campbell and defendant, George C. Campbell, and took from them notes and a deed of trust to secure $17,500 of the purchase money. These notes were assigned by Bray to Joseph T. Morton, who had no notice of the mortgage in suit, as collateral security for four thousand dollars. Afterwards, Morton assigned his debt against Bray to C. B. Holland, together with the collaterals as security. The Bray debt, thus assigned by Morton to Holland, became due, as well as the collateral security, and Holland foreclosed the deed of trust, securing the collateral, and bought in the land at the trustee sale. He then conveyed the land by quit-claim deed to defendant, George C. Campbell, one of the purchasers from Bray, and who gave to Bray, in connection with James B. Campbell, the collateral notes and deed of. trust securing them. It is claimed that Holland and Campbell both knew of plaintiff’s mortgage, and we shall so consider it.
The question is, does Campbell take the title freed from the mortgage securing the notes now held by plaintiff % The question must be answered in the affirmative. *520It is agreed that Morton held, the notes as collateral security for his debt against Bray, without notice of plaintiff’s mortgage; this gave him the right to sell the property on which these notes were secured.. Morton assigned the debt and the security (the collaterals) to Holland, who, of course, took a good title, as he purchased of an innocent holder. Holland, occupying Morton’s shoes, had a right to sell, and the fact that he became the purchaser does not alter the case. For if he held the security freed from plaintiff’s mortgage, he would hold the title purchased under the security in the same way. So holding, he had a right to sell to Campbell or any one else, whether they had notice of the prior deed of trust or not. The matter comes under the rule. stated by Chancellor Kent, approved in Funkhouser v. Lay (78 Mo. 458), viz.: “To prevent a stagnation of property, and because the first purchaser, being entitled to hold and enjoy, must be equally entitled to sell.” The question was again decided in Craig v. Zimmerman (87 Mo. 475). This court said, in Crow v. Andrews (24 Mo. App. 159), that, ‘ ‘ were this not the law, an innocent holder might find an embargo on his property ; that is, he would be restricted in his sales to those who knew nothing of the source of his title.”
The judgment, with the concurrence of the other judges, is affirmed.