Christie v. Sherwood
Before: Haynes
Synopsis
Mortgages—Priority of Record of Subsequent Lien—Notice—Knowledge of Bank Cashier—Agency for Depositor—Presumption.— Where the cashier of a bank negotiated a prior mortgage in favor of a depositor of the bank, and the mortgage was left in his possession, and interest on the loan was received by him and placed to the credit of the mortgagee on the books of the bank, and on his pass-book, the cashier’s knowledge of the prior mortgage will be presumed to continue, under such circumstances, and to affect the bank with knowledge of the prior mortgage, at the date of a subsequent mortgage to the bank on the same property, which was first recorded, in the absence of proof that the previous transaction was not then present to the mind of the cashier.
Id.—Agency of Bank—Presumption — Action of Cashier—Negotiation of Loans for Depositors—Charter of Bank.—Where the charter of a bank stated that it was to act as agent in the investment of funds, and to transact any business that may be done by a financial agent, it cannot be presumed that its cashier, in negotiating a loan upon mortgaged security in favor of a depositor, acted as agent of the mortgagee, but it must be presumed that he was acting for the bank where he was in the habit of negotiating loans for it, and the bank, in such case, is bound to know of the mortgage in favor of the depositor.
Id.—By-laws of Bank—Customary Action of Cashier — Estoppel of Bank.—Although the by-laws of the bank provided that the concurrence of the president and cashier were required in the negotiation of loans, yet, where it was customary for the cashier to negotiate loans without consulting the president, the bank cannot be permitted to say that it did not negotiate a loan which was negotiated through its cashier alone.
Haynes, C. Defendant, Dwight Sherwood, executed his note and mortgage to the plaintiff on December 3, 1887, and that mortgage was recorded December 20, 189Ó.
On March 4, 1890, Sherwood executed to the Bank of Lake another note and mortgage on the same lands (and certain other parcels) and this mortgage was recorded May 5, 1890.
Plaintiff’s mortgage is for two thousand dollars, that of the bank for four thousand dollars, and the property mortgaged is insufficient to satisfy both. The court below held that plaintiff’s mortgage, though last recorded, was the first lien on that part of the land described in both mortgages, and judgment was entered accordingly. This appeal is by the bank from the judgment upon the judgment-roll and a statement containing the evidence; and the only question is whether the bank at the time it took its mortgage had notice of the prior mortgage to the plaintiff.
The uncontradicted facts are that the plaintiff, at and prior to the date of his note and mortgage, had three thousand dollars or more on deposit with the Bank of Lake; that Marshall Arnold was then the cashier of said bank, and continued to be such cashier until after the execution of the mortgage to the bank; that about the date of the mortgage to plaintiff, Arnold asked plaintiff if he wanted to lend the money he had in the bank; [529]that plaintiff replied that he might need it soon; that Arnold then said: “If you want to loan the money we can loan it for you, and the bank will settle your mortgage off any time you want the money on it,” and plaintiff told him he could lend it in that way; that plaintiff did not personally see Sherwood or negotiate the loan; that Sherwood’s acknowledgment of his mortgage to Christie was taken and certified by Arnold as notary public.
The plaintiff testified that the bank paid him the interest three different times, the first time two hundred dollars, at another time three hundred dollars, but the amount of the third payment was not stated; that said sums were credited to him by the bank in his pass-book, and he was told by the cashier that they were interest on the loan to Sherwood. The date of the two hundred dollars payment is given as February 20th—year not stated—but as that is the amount of one year’s interest, which became due December 3, 1888, we assume that it was paid February 20,1889. The only other date given was May 7, 1890. The books of the bank were also put in evidence showing the same deposits.
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