Court Opinion

ID: 7994670
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:35:25.238846+00
Date Added: 2024-06-11T16:35:30.072232
License: Public Domain

Sykes, P. J.,
delivered the opinion of the court.
The appellants by their bill seek to enjoin the sale of certain lands under a deed of trust. The default declared in the advertisement of sale was that default had been made in the payment of taxes. The clause relating thereto in the deed of trust is as follows:
“Or should default be made in the payment of the taxes *57legally assessed against any of the hereinafter described property as dne, then in any of said events the entire sum hereby secured with accrued interest then remaining unpaid shall immediately become due and payable at the option and election of the mortgagee herein, his heirs or assigns.”
The taxes had not been paid by the appellants before the time came and the lands were advertised for sale by the sheriff for nonpayment thereof. The sale was to be made April 1st. When this fact was ascertained by the owners of the notes, some time in March, they advertised this land for sale under the deed of trust. Shortly thereafter, and before the day of sale, the appellants paid the taxes.
The question here presented is whether or not under the clause of the deed of trust above quoted the appellees had a right to dclare a forfeiture and sell the lands. Technically speaking, taxes are due December 15th. If not paid by February 1st, a penalty accrues. The taxpayer, however, has the right to pay the taxes at any time before the land is sold. This clause is a penal one, and must be strictly construed against the creditor, and liberally construed in favor of the debtor. Since the debtor has the right to pay these taxes at any time before the lands are sold, a forfeiture under this clause of the deed of trust cannot be declared at least until the day of the sale of the land. The chancellor so held upon this question.
The note in this case was payable to the order of S. E. Cobb, and was indorsed as follows:
“Pay to the Kaw Investment Company without recourse.
[Signed] S. E. Cobb.”
This indorsement was not noted on the record of Hinds county within thirty days from its execution. It is contended by the appellants that, under section 2296 of Hemingway’s Code (section 2795, Code of 1906), because of this failure the owners of the notes forfeited to the mortgagors ten per cent, of this indebtedness. This section reads as follows:
*58“All assignments in whole or in part of any indebtedness secured by mortgage, deed of trust, or other lien of record, shall be entered on the margin of the record of the lien within thirty days from the day of said assignment, or said assignment shall be acknowledged and filed for record within said time, and if the assignee of said indebtedness fail to comply with the provisions of this section he shall forfeit to the debtor ten per cent, of the' amount of said indebtedness.”
The question here presented is whether or not this statute applies to the indorsement of a negotiable instrument. It was passed when our anti-commercial statute was in full flower. Under that statute all notes were nonnegotiable, except those payable to bearer; consequently a negotiable instrument was not within the terms of the statute. There is a difference between “assignment” and “indorsement.” Indorsements of negotiable instruments are of various kinds, as especially pointed out in our Negotiable Instrument Acts. A note made payable to order and indorsed in blank thereafter passes by delivery. If this statute were applicable to negotiable instruments, it would depend upon the nature of the indorsement as to whether the penalty applied. If the note were indorsed in blank, neither the taker from the indorser nor any other taker could be liable under the statute, for the reason that it was not specifically eo nomine made payable to him. On the other hand, if it were made payable to one by name as in this case, the statute would apply. In other words, the nature of the indorsement, under that theory, would determine the liability of the indorsee to the penalty. This is not the law. While the word “assignment” is a broader term than the word “indorsement,” and sometimes includes it, this section was dealing solely with nonnegotiable instruments, and the assignment therein referred to- was the assignment necessary to nonnegotiable instruments, and not the indorsement of a negotiable instrument.
“ ‘Assignment’ is a broader term than ‘indorsement,’ *59and is more comprehensive than the terms ‘indorse/ ‘negotiate/ or other likewords, as applied to commercial paper. Assignment is generally used to signify the transfer, of nonnegotiable instruments, while indorsement is used to signify a transfer of negotiable instruments.” 5 Corpus Juris, p. 841.
The use of the word “assignment” in this statute referred only to nonnegotiable instruments, and was not meant to, and does not, include the various indorsements of negotiable instruments. The chancellor held that the indorsees of the note were not liable to this penalty. This is also a penal'statute, and must be strictly construed.
The decree of the lower court is affirmed.

Affirmed.

Cook and Ethridge, JJ., dissenting in part.