Sedgwick, J.
This action was brought to foreclose a real estate mortgage. The trial court found for the defendants, and entered a decree accordingly. The plaintiff brings the record here on appeal.
It is conclusively established by the evidence that on the 31st day of July, 1889, the defendants Meyers and wife executed and delivered to the Globe Investment Company their note for $550 and the mortgage sought to be foreclosed to secure the payment of said note; that on the 19th day of September, 1889, the Globe Investment Company indorsed the note in blank, executed an assignment in blank of the mortgage, and for a valuable consideration, and in the usual course of business, sold said note and mortgage, and delivered the same, with said assignment, to John Stuart & Co., who afterwards, in the same year, without further indorsement or assignment in writing, in [284] the same manner, and for a valuable consideration, sold the note and mortgage, and delivered the same, with said assignment, to the plaintiff. The assignment of the mortgage was never filed for record, nor recorded, in the county where the land lies. Afterwards, and before the payment hereinafter mentioned, the mortgagors conveyed the mortgaged premises to the defendant Henry Woerdhoff, subject to the mortgage, who, in August, 1894, without any notice or knowledge that the Globe Investment Company had transferred the note and mortgage, paid the mortgage debt to said company.
It is insisted that the contract upon which this action was brought is not negotiable, and that, as the mortgagor had no notice of the assignment, payment to the original mortgagee is a satisfaction of the claim. The note, otherwise in the usual form of a promissory note, has the following memorandum upon its face: “This note is.secured by a first mortgage on the N. W. I sec. 7, tp. 23, R. 6 west, 6th P. M., Antelope county, Nebraska.” And the mortgage contains, among other things, the following provision: “The said parties of the first part hereby agree to pay all the taxes and assessments levied upon the said premises and all taxes and assessments levied upon the holder of this mortgage for and on account of the same * * * when the same are respectively due; and if not so paid, the said party of the second part, or the legal holder or holders of said note may, without further notice declare the whole debt hereby secured due and payable at once, or may elect to pay such taxes, assessments * * * and the amount so paid shall be secured by this mortgage and may be collected in the same manner as the principal debt hereby secured, with interest at the rate of ten per cent per annum. But whether the legal holder or holders of said note elect to pay such taxes, assessments * * * or not, it is distinctly agreed that the legal holder or holders of said note may declare the debt thereby secured due and immediately cause this mortgage to be foreclosed.” These two instruments, having been executed at the same time [285] and transferred together, must he construed together. See Consterdine v. Moore, post, page 291; Grand Island Savings & Loan Ass’n v. Moore, 40 Nebr., 686; Seieroe v. First Nat. Bank of Kearney, 50 Nebr., 612. The long-established and general rule is that if the note is in form negotiable, a sale and transfer of the note transfers the mortgage; and a nóte secured by mortgage may be negotiable, and the purchaser thereof may be an innocent purchaser and entitled to protection as such in the collection of his debt, whether by suit upon the note alone or by foreclosure of his securities. But the note and mortgage are two contracts; that is, though executed at the same time, and construed together, they are to serve two purposes; one is to evidence the principal indebtedness, and the other to secure its payment. Usually the note serves the one purpose and the mortgage the other. It is well settled in this state that, although a note is absolute in form, every provision affecting the same, the amount, or manner of payment, — that is, the contract, in regard to the indebtedness itself, contained in a mortgage given to secure it, and made contemporaneously,— affects the note in precisely the same manner, and to the same extent, as though included with it on the same piece of paper, as to all persons chargeable with notice.
One of the essential elements of negotiable paper is certainty as to the amount to be paid. Daniel, Negotiable Instruments, sec. 53; Edwards, Bills & Notes, sec. 153; Story, Promissory Notes, sec. 20; Randolph, Commercial Paper, sec. 104. So strictly have the courts adhered to this rule that it has been held that a bill of exchange for the payment of a certain sum with exchange is not negotiable. Culbertson v. Nelson,* 61 N. W. Rep. [Ia.], 854; National Bank of Commerce v. Feeney,† 80 N. W. Rep. [S. D.], 186. While there is a conflict of authority as to the effect of the provisions for exchange, such conflict does not arise from any diversity of opinion as to the necessity of certainty of the [286] amount to be paid, but, rather, from a difference of opinion as to whether such provisions render the amount uncertain. The question is not here involved, and is not decided. The agreement to pay taxes on the lands mortgaged or to keep up the improvements, or not permit or suffer waste thereon, or provisions of like nature, contained in the mortgage, do not destroy the negotiability of the note, because they do not relate to the principal indebtedness, and do not render the amount thereof uncertain. Such provisions relate to the security, which is collateral to the principal indebtedness, and are proper provisions of the mortgage as such to insure the maintenance of. the security as originally given.
It. is insisted that the clause in question requires the maker of the note to pay all taxes that may be levied against the holder of the note on the credit represented by the note and mortgage. This indebtedness was to exist for five years from the date of the note. At the time it was made, no one could say with any degree of certainty how-much taxes would be assessed upon the credit represented thereby. Such uncertainty destroys the negotiability of the instrument. Walker v. Thompson, 66 N. W. Rep. [Mich,], 584; Brooke v. Struthers,* 68 N. W. Rep. [Mich.], 272, 275; Lockrow v. Cline) 46 Pac. Rep. [Kan. App.], 720. If, in addition to the proAdsions for the security of the debt, the mortgage contains provisions relating strictly to the indebtedness itself, making the amount that the holder may demand thereon depend upon conditions that can not be controlled by the holder, such uncertainty destroys the negotiability of the note in the hands of one who has notice of these conditions in the mortgage.
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Sedgwick, J.
This action was brought to foreclose a real estate mortgage. The trial court found for the defendants, and entered a decree accordingly. The plaintiff brings the record here on appeal.
It is conclusively established by the evidence that on the 31st day of July, 1889, the defendants Meyers and wife executed and delivered to the Globe Investment Company their note for $550 and the mortgage sought to be foreclosed to secure the payment of said note; that on the 19th day of September, 1889, the Globe Investment Company indorsed the note in blank, executed an assignment in blank of the mortgage, and for a valuable consideration, and in the usual course of business, sold said note and mortgage, and delivered the same, with said assignment, to John Stuart & Co., who afterwards, in the same year, without further indorsement or assignment in writing, in [284] the same manner, and for a valuable consideration, sold the note and mortgage, and delivered the same, with said assignment, to the plaintiff. The assignment of the mortgage was never filed for record, nor recorded, in the county where the land lies. Afterwards, and before the payment hereinafter mentioned, the mortgagors conveyed the mortgaged premises to the defendant Henry Woerdhoff, subject to the mortgage, who, in August, 1894, without any notice or knowledge that the Globe Investment Company had transferred the note and mortgage, paid the mortgage debt to said company.
It is insisted that the contract upon which this action was brought is not negotiable, and that, as the mortgagor had no notice of the assignment, payment to the original mortgagee is a satisfaction of the claim. The note, otherwise in the usual form of a promissory note, has the following memorandum upon its face: “This note is.secured by a first mortgage on the N. W. I sec. 7, tp. 23, R. 6 west, 6th P. M., Antelope county, Nebraska.” And the mortgage contains, among other things, the following provision: “The said parties of the first part hereby agree to pay all the taxes and assessments levied upon the said premises and all taxes and assessments levied upon the holder of this mortgage for and on account of the same * * * when the same are respectively due; and if not so paid, the said party of the second part, or the legal holder or holders of said note may, without further notice declare the whole debt hereby secured due and payable at once, or may elect to pay such taxes, assessments * * * and the amount so paid shall be secured by this mortgage and may be collected in the same manner as the principal debt hereby secured, with interest at the rate of ten per cent per annum. But whether the legal holder or holders of said note elect to pay such taxes, assessments * * * or not, it is distinctly agreed that the legal holder or holders of said note may declare the debt thereby secured due and immediately cause this mortgage to be foreclosed.” These two instruments, having been executed at the same time [285] and transferred together, must he construed together. See Consterdine v. Moore, post, page 291; Grand Island Savings & Loan Ass’n v. Moore, 40 Nebr., 686; Seieroe v. First Nat. Bank of Kearney, 50 Nebr., 612. The long-established and general rule is that if the note is in form negotiable, a sale and transfer of the note transfers the mortgage; and a nóte secured by mortgage may be negotiable, and the purchaser thereof may be an innocent purchaser and entitled to protection as such in the collection of his debt, whether by suit upon the note alone or by foreclosure of his securities. But the note and mortgage are two contracts; that is, though executed at the same time, and construed together, they are to serve two purposes; one is to evidence the principal indebtedness, and the other to secure its payment. Usually the note serves the one purpose and the mortgage the other. It is well settled in this state that, although a note is absolute in form, every provision affecting the same, the amount, or manner of payment, — that is, the contract, in regard to the indebtedness itself, contained in a mortgage given to secure it, and made contemporaneously,— affects the note in precisely the same manner, and to the same extent, as though included with it on the same piece of paper, as to all persons chargeable with notice.
One of the essential elements of negotiable paper is certainty as to the amount to be paid. Daniel, Negotiable Instruments, sec. 53; Edwards, Bills & Notes, sec. 153; Story, Promissory Notes, sec. 20; Randolph, Commercial Paper, sec. 104. So strictly have the courts adhered to this rule that it has been held that a bill of exchange for the payment of a certain sum with exchange is not negotiable. Culbertson v. Nelson,* 61 N. W. Rep. [Ia.], 854; National Bank of Commerce v. Feeney,† 80 N. W. Rep. [S. D.], 186. While there is a conflict of authority as to the effect of the provisions for exchange, such conflict does not arise from any diversity of opinion as to the necessity of certainty of the [286] amount to be paid, but, rather, from a difference of opinion as to whether such provisions render the amount uncertain. The question is not here involved, and is not decided. The agreement to pay taxes on the lands mortgaged or to keep up the improvements, or not permit or suffer waste thereon, or provisions of like nature, contained in the mortgage, do not destroy the negotiability of the note, because they do not relate to the principal indebtedness, and do not render the amount thereof uncertain. Such provisions relate to the security, which is collateral to the principal indebtedness, and are proper provisions of the mortgage as such to insure the maintenance of. the security as originally given.
It. is insisted that the clause in question requires the maker of the note to pay all taxes that may be levied against the holder of the note on the credit represented by the note and mortgage. This indebtedness was to exist for five years from the date of the note. At the time it was made, no one could say with any degree of certainty how-much taxes would be assessed upon the credit represented thereby. Such uncertainty destroys the negotiability of the instrument. Walker v. Thompson, 66 N. W. Rep. [Mich,], 584; Brooke v. Struthers,* 68 N. W. Rep. [Mich.], 272, 275; Lockrow v. Cline) 46 Pac. Rep. [Kan. App.], 720. If, in addition to the proAdsions for the security of the debt, the mortgage contains provisions relating strictly to the indebtedness itself, making the amount that the holder may demand thereon depend upon conditions that can not be controlled by the holder, such uncertainty destroys the negotiability of the note in the hands of one who has notice of these conditions in the mortgage.
But the provision does not relate to the indebtedness. It is the agreement of the makers of the mortgage, and not of the maker of the note alone; and it is to pay “all taxes and assessments levied upon the holder of the mortgage for and on account of the same,” and not- upon the credit represented by the note. The evidence shows that the mortgagee was a Massachusetts corporation, and Avas [287] engaged in the business of negotiating loans in the various states, taking notes and securities therefor to be sold in foreign countries; and the provision.was plainly intended to meet the conditions which obtain in some jurisdictions, where the taxes chargeable against lands are assessed against both mortgagor and mortgagee in proportion to their several estates in the land. The effect of the provision would then be to maintain the securities intact, and would not affect the indebtedness itself. Agreements to protect the security from taxes or other depreciation do not render the amount of the indebtedness itself uncertain.
On April 22, 1903, the following opinion on rehearing was filed:
1. Mortgage: Condition: Note: Negotiability. The condition in a real estate mortgage securing a note otherwise negotiable that “the said parties of the first part hereby agree to pay all the taxes and assessments levied upon said premises and all taxes and assessments levied upon the holder of the mortgage for and on account of the same,” destroys the negotiability of the note.
2. "ote: Purchase: Mortgage: Assignment: Notice of Contents of Mortgage. One who purchases a note and takes the mortgage and assignment thereof with the note is chargeable with notice of the contents of the mortgage.,
3. -■ — : Mortgage: Non-Negotiable: Notice: Transfer: Satisfaction: Payment. The maker of a note and mortgage not negotiable, who has no notice of a transfer of the papers, maj satisfy the same by payment to the payee named therein.
This, then, was a negotiable note, and payment to one who did not and could not produce the note, without proof that the party to whom payment was made was the owner of the paper, or the agent of the owner authorized to receive the money for him, is no defense against the note in the hands of an innocent purchaser.
The decree of the district court is reversed and the cause remanded, with directions to enter a decree of foreclosure as prayed.
Reversed and remanded.