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1. If the issue of ownership of the man's note and mortgage is subsequently raised in an appropriate action by the bank to foreclose, the court should hold that

A man executed and delivered a promissory note and a mortgage securing the note to a mortgage company, which was named as payee in the note and as mortgagee in the mortgage. The note included a statement that the indebtedness evidenced by the note was «subject to the terms of a contract between the maker and the payee of the note executed on the same day» and that the note was «secured by a mortgage of even date.» The mortgage was promptly and properly recorded. Subsequently, the mortgage company sold the man's note and mortgage to a bank and delivered to the bank a written assignment of the man's note and mortgage. The assignment was promptly and properly recorded. The mortgage company retained possession of both the note and the mortgage in order to act as collecting agent. Later, being short of funds, the mortgage company sold the note and mortgage to a woman at a substantial discount. The mortgage company executed a written assignment of the note and mortgage to the woman and delivered to her the note, the mortgage, and the assignment. The woman paid value for the assignment without actual knowledge of the prior assignment to the bank and promptly and properly recorded her assignment. The principal of the note was not then due, and there had been no default in payment of either interest or principal.