FIRST NATIONAL BANK OF QUINCY, A CORPORATION, NORTH GEORGIA NATIONAL BANK, A CORPORATION, AMERICAN NATIONAL BANK OF ASHEVILLE, A CORPORATION, APPELLANTS,
v.
MOSES GUYTON JR., LUCY H. GUYTON, HIS WIFE, GEORGE M. FORMAN, DOING BUSINESS AS GEORGE M. FORMAN & CO., AND JOHN H. CARTER, APPELLEES.-ORIGINAL BILL; GEORGE M. FORMAN AND GEORGE M. FORMAN AND HERMAN HACHMEISTER, AS COPARTNERS UNDER THE FIRM NAME AND STYLE OF GEORGE M. FORMAN & CO., APPELLANTS, V. FIRST NATIONAL BANK OF QUINCY, A CORPORATION, AMERICAN NATIONAL BANK OF ASHEVILLE, A CORPORATION, MOSES GUYTON JR., AND LUCY H. GUYTON, HIS WIFE, AND JOHN H. CARTER, APPELLEES.-CROSS BILL
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The Florida Supreme Court reversed a decree that gave priority to second mortgagees over note holders, holding that when a promissory note secured by mortgage is transferred, the mortgage follows as an incident to the note, and the original mortgagee has no authority to release the mortgage after transfer.
The original mortgagee had no authority to release the mortgage after transferring the notes, and such release does not affect the rights of the note holders to priority over second mortgagees.
“When a note secured by mortgage is transferred the mortgage follows the note as an incident thereto and the transferrer of the note ordinarily has no more right or authority to release the mortgage than he has to cancel the note after the note is transferred.”
Establishes the fundamental principle that mortgage rights follow the debt as an incident and cannot be released by the transferrer post-transfer
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Join FLexlaw to unlock all legal intelligenceGuyton executed three promissory notes to Carter personally and gave Carter a mortgage to secure payment. Carter transferred one note each to three di…
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Per Curiam.
—Guyton gave three promissory nptes to Carter personally and executed to Carter personally a mortgage to secure the payment of the note. Carter transferred one of the nptes to each of three different banks, Carter being the president of each bank. Subsequently to the transfer of the notes, Carter personally released a portion of the mortgage in favor of second mortgagees of Guyton. The court gave priority to the second mortgagees over the holders of the notes transferred by Carter and the holders of the notes appealed.
When a note secured by mortgage is transferred the mortgage follows the note as an incident thereto and the transferrer of the note ordinarily has no more right or authority to release the mortgage than he has to cancel the note after the note is transferred. See Scott v. Taylor, 63 Fla. 612, 58 South. Rep. 30; Taylor v. American National Bank of Pensacola, Fla., 63 Fla. 631, 57 South. Rep. 678; Northrup v. Reese, 68 Fla. 451, 67 South. Rep. 136.
In securing or accepting a release of a portion of a prior mortgage in their favor the second mortgagees should ascertain the authority of the original prior mortgagee to make the release, since if the notes which the mortgage secured had passed to another the mortgage rights had also passed as an incident to the debt and an effective release of the mortgage could not be made by the original mortgagee. Carter had no authority to release the mortgage after he had transferred the notes, and his release does not affect the rights of the holders of the notes secured by the mortgage to priority over second mortgagees. Chapter 6909, Acts of 1915, was enacted subsequent to the decree appealed from herein.
The decree is reversed. Taylor, C. J., and Shackleford, Whitfield and Ellis, JJ., concur. Cockrell, J., dissents.
On Petition for Rehearing.
A petition for rehearing having been filed herein and the same having been considered by the Court, it appears to the court that no material matter was overlooked by the Court in its consideration of the cause on the appeal, and there being no question of subrogation properly presented, the appellees’ suggestion that subrogation may be involved is not well taken, and the petition for a rehearing is denied.
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Forman v. First Nat'l Bank of Quincy, 76 Fla. 48 (Fla. 1918)…West, J. This is the second time this case has reached this Court. On the former appeal (First National Bank of Quincy v. Guyton, 72 Fla. 43, 72 South. Rep. 460) the quesrion now presented was not involved. The complainant banks in the original suit flled their bill to foreclose a mortgage upon certain real estate iu Jackson County, made by Moses Guyton and his wife to J. H. Carter. Thi…1 / 2
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Drake Lumber Co. v. Semple, 100 Fla. 1757 (Fla. 1930)…f Davis, the Owner of the note and mortgage, the assignment to Whyel had been already made when Anderson went to the bank with the two checks drawn in his favor, which he endorsed to the bank. In the ease of the First Nat. Bank of Quincy v. Guyton, 72 Fla. 43, 72 So. R. 460, this Court said: “When a note secured by mortgage is transferred the mortgage follows the note as an incident thereto and the transferrer of the note ordinarily has no more right or authority to release the mortgage than he has to c…
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Holmes v. Dunning, 101 Fla. 55 (Fla. 1931)…tgage in Bensimer v. Fell, 35 W. Va. 15; 29 Am. St. Rep. 774.” In this State it has been held, and is the rule, that where a mortgage is given to secure a note the mortgage security follows the note. First National Bank of Quincy vs. Guyton, et al, 72 Fla. 43, 72 Sou. 406. [*58] In Peltier vs. Babillion, 45 Mich. 384, the Supreme Court .of Michigan held: “A note made payable to the “order of J. Y. Mehling estate” and endorsed by the sole legatee who was also exeeuirix was held valid and payable to the p…
Previewing 3 of 6 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Taylor v. Am. Nat'l Bank of Pensacola, 63 Fla. 631 (Fla. 1912)
- Scott v. Taylor, 63 Fla. 612 (Fla. 1912)
- Northup v. Reese, 68 Fla. 451 (Fla. 1914)