
    FRANK v. CANNAVAN et al.
    No. 17570.
    Opinion Filed Oct. 18, 1927.
    (Syllabus.)
    1. Mortgages-Payment. Before Maturity to. Mortgagee not ia Possession of Note not Biin~1ing on Assignee.
    The payment of a negotiable promissory note before maturity by the mortgagor or his grantee, when made to the mortgagee not in possession of the note and mortgage, is not biuding upon an assignee thereof who has possession of the note and mortgage at the time of payment, unless he has expressly or impliedly authorized such payment.
    2. Bills and Notes-Payment Before Maturity to Other than Holder at Risk of Payer.
    Payment of a negotiable note before maturity to any one other than the hokier thereof, `or his duly authorized agent to receive such payment, is at the risk of the payer.
    3. Mortgag~es-Reeorded Assignment es Notice of Assignee's Rights.
    The assignment of a mortgage in due form, recorded in the offlée of the ~Oulity-clerk of the proper county, is constructive notice to the mortgagor and his grantees that the assignee named in the recorded assignment is the holder and owner of the mortgage.
    Error from District Court, Pontotoc County; J. W. Bolen, Judge.
    Action by Albert J. Prank against P. S. Cannavan et al. Juftgment for defendants, and plaintiff brings error.
    Reversed and remanded.
    E. C. Stanard, l\4. L. Hankins, and C. F. Green, for plaintiff in error.
    Robert Wimbish and W. C. Duncan, for defendants in errorS
   HIDFNER, J.

Albert J. Frank, plaintiff, sued P. 5. Cannavan and his wife, Willie hi. Can-navan, defendants, on a promissory note in the sum of $809.81, and to foreclose a real estate mortgage given as security for the note. The defendants admitted the execution of the note and mortgage and the delivery thereof to the Conservative Loan & Trust Company and alleged that the plain tiff was not a bona fide holder of the note and that the Conservative Loan & Trust Company, hereinafter called trust company, was acting as the agent of the plaintIff and that they had paid the full amount of the note to the trust company. The plaintiff specifically denied that the trust company was his agent for any purpose. Pie also n~ leged that the note was bought before ma-tulity without notice of any infirmities and that a valuable consideration was paid tlierc-

On the trial of the case before a jury and after the plaintiff had introduced his evidence and the defendants had introduced two witnesses, the couft on its own motion instructed the jury to return a verdict for the defendants. From the judgment the plaintiff has appealed to this court.

The defendants executed the note sued on in favor of the trust company. The trust company immediately sold the note and the mortgage to John hi. Stager, and soon thereafter John hi. Stager for a valuable consideration sold the uofe and mortgage to the plaintiff. This sale was made long before the note or any interest became due thereon.

At the time the loan was made by the trust company the defendants executed en agency contract making the trust company their agent for the purpose of forwarding the interest and principal to the purchaser of the note. A few installments of interest were paid by the defendants to the trust company. The trust company forwarded the same to Stager, who in turn paid the same to the plaintiff. The plaintiff, however, at no time delivered any coupons to Stager for collection and only delivered the coupons to Stager when the cash was paid, and Stager in turn returned the coupons to the trust company.

The plaintiff recorded the assignment of the mortgage in his favor in the office of the county clerk at Ada, Okla., the county where the land was situated.

The note ran for several years, and sometime before it was due the Home Building & Loan Association, without a release of the first mortgage, executed a new mortgage on tlie property covered by the first mortgage and tbe defendants delivered a sufficient amount of money to tbe trust company to pay tbe note that belonged to tbe plaintiff. Tbe trust company failed and tbe note of tbe plaintiff was not paid.

Defendants contend that tbe trust company and Stager were both tbe agents of tbe plaintiff under a written guarantee executed by tbe trust company wbicb was sent to Stager making tbe trust company tbe agent of Stager to collect and forward tbe principal and interest to bim. There is no evidence of tbis guaranty contract other than a blank form attached to the deposition of an official of the trust company in which he stated that tbis kind of a guaranty was usually forwarded with each loan. We doubt if tbe deposition was admissible in evidence, considering tbe circumstances under which it was admitted; but admitting that it was, and admitting- that tbe guaranty contract went to Stager, tbe evidence discloses that tbe plaintiff was a bona fide purchaser of the note from Stager and there is no evidence that Stager was tbe agent of the plaintiff. He did not deliver tbe coupons to Stager for collection, and when Sta-ger received tbe money from tbe trust company be paid it to tbe plaintiff, at wbicb time tbe coupons were canceled and turned over to Stager. The note was never paid and was at all times in tbe possession of plaintiff.

Tbe assignment of tbe mortgage was properly recorded in Pontotoc county, and tbe money was paid to tbe trust company long-before tbe note was due.

In tbe case of Bale v. Wright, 120 Okla. 174. 252 Pac. 50, tbe syllabus is as follows:

“1. The payment of a negotiable promissory note before maturity by tbe mortgagor or bis grantee, when made to the mortgagee not in possession of tbe note and mortgage, is not binding upon an assignee thereof who has possession of the note and mortgage at tbe time of payment, unless be has expressly or impliedly authorized such payment.
“2. Payment of a negotiable note before maturity to any one other than the holder thereof, or bis duly authorized agent to receive such payment, is at tbe risk of tbe payer.
“3. Proof that one purported to act as tbe agent of another is not sufficient evidence upon which to submit tbe question of agency to tbe jury.
“4. The assignment of a mortgage in due form, recorded in the office of tbe county clerk of tbe proper county, is constructive notice to the mortgagor and bis grantees that tbe assignee named in tbe recorded assignment is tbe bolder and owner of tbe mortgage.”

In our judgment tbe facts in tbe case at bar bring it clearly within tbe rule laid down in tbe Bale-Wright Case, supra, and we are therefore bound by it; and under tbe rule laid down in that case it becomes necessary for us to reverse tbe judgment of tbe trial court.

Tbe trial court on its own motion, before tbe defendants had rested, directed a verdict for the defendants. Inasmuch as tbe defendants had not completed their evidence when tbe trial court directed tbe verdict in their behalf, the case is reversed and remanded, with directions to grant a new trial.

BRANSON, C. J., MASON, V. C. J., and HARRISON, LESTER, CLARK, and RILEY, JJ„ concur.

Note.' — See under (1) 41 O. J. p. 700, §720. (2) 8 O. J. p. 593, §S28. (3) 41 O. .1. p. 070, §678; p. 699, §720; 19 R. O. L. p. 360. See under (1, 2) 3 R. O. L. p. 1289; 1 R. C. L. Supp. p. 1023; 4 R. O. L. Supp. p. 242.  