ON REHEARING.
ABBOTT, District Judge[2] On rehearing our attention has been called to the. fact that section 3943, O. L. 1897, quoted in our former opinion, was repealed by section 32, c. 62, Laws of 1901. This section of the statutelias no material effect upon the question under consideration. Its correct determination depends upon the proper construction of sections 3953, 3954, and 3955, quoted in our original opinion. Appellants, in their brief filed upon rehearing, have referred us to similar statutes in many of the states and the decisions of courts construing such statutes as not applying to the assignment of a mortgage given to secure the payment of a negotiable promissory note. Thus, in Nebraska, sections 10840, 10844, 10845, 10816, and 10818 of Cobby’s Compiled Statute's are admittedly much broader than the sections of our statute, quoted in our former opinion; yet in Snell v. Margritz, 64 Neb. 6, 91 N. W. 274, the Supreme Court of the state held that an assignment of the mortgage securing a negotiable note does not come within the meaning of the statute, and that no record of such assignment is necessary in order to protect the holder of the note against payments made by the purchaser of the property covered by the mortgage. The same rule was announced by the Supreme Court of Florida in the ease of Garrett v. Fernauld, 63 Fla. 434, 57 South. 671, interpreting a similar statute. In the followirg cases similar statutes were construed and a like conclusion reached: Craft v. Webster, 4 Rawles, 242; Assets Realization Co. v. Clark, 205 N. Y. 105, 98 N. E. 457, 41 L. R. A. (N. S.) 462; Joerdens v. Schrimpf, 77 Mo. 383; Burhans v. Hutcheson, 25 Kan. 625, 37 Am. Rep. 274; Adler v. Sargent, 109 Cal. 42, 41 Pac. 799; Howard v. Shaw et al., 10 Wash. 151, 38 Pac. 746; Hull v. Diehl et al., 21 Mont. 71, 52 Pac. 782. Many other cases to the same effect have also been cited by appellants and read by the court. Such being the practically unanimous holding of the courts, we are convinced that our former opinion was erroneous, and now hold that the bona fide holder of negotiable1 paper, transferred to him by indorsement thereon before maturity, and secured by a real estate mortgage, need not record the as«Hnmeut of the mortgage, or bring home to the mortgagor actual notice of such assignment, in order to protect himself against payments made after the assignment without his knowledge'or consent by a subsequent purchaser of the land, to the. mortgagee.
[3]- A party making payment upon a negotiable promissory' note should insist upon the presentation of the paper by' the party to whom the payment is- made, in order to make sure that it is at the time in his possession, and not outstanding in another, and, if he fails to do so, the payment is wholly at the risk of the payor. Daniels on Negotiable* Instruments (Gth Ed.] § 1227. -Appellee in this case was guilty of gross negligence in making .payment to Hayden, without demanding the production of the note and securing proper credit thereon.
Some question was raised upon the trial -as to whether Hayden-was acting as agent for Babler, at the-timé'he made-, the agreement to release, and received the partial payment. rThere is no proof of agency in-the record, and the trial court could not have based the judgment -upon this theory. .
' Eor1 the reasons stated, the judgment of the tri-al" court will be'reversed, and the cause remanded, with directions to dismiss the complaint; and it is so ordered. ’ ■ ' ’
Roberts, C.'J., and Hanna, J., concur. Parker, J.j did not participate.