43 Neb. 245 | Neb. | 1895
On the 4th day of May, 1875, John Gallagher executed in favor of the defendant, Wellington R. Burt, a mortgage, whereby he conveyed to the latter certain real estate in Douglas county to secure an indebtedness of $20,000. On the 10th day of August, 1875, Matthew Baldwin, who had in the meantime acquired the title to said property by deed from Gallagher, conveyed the same by mortgage to Morgan Baldwin, to secure payment of a note of even date therewith for $12,500, payable six years from date, with annual interest at six per cent. Said mortgage was executed in the state of Illinois and acknowledged before Henry Wisner, who, according to the certificate attached thereto, was at said time a commissioner for the state of Nebraska. It appears also to have been filed for record with the county
Owing to the voluminous character of the pleadings, which comprise 133 pages of type-written matter, it is impracticable to give in this connection more than a brief summary of the issues thereby presented. The answers, after showing the interests of the several defendants as purchasers or mortgagees, deny the execution of the mortgage alleged by the plaintiff in terms admitted to be sufficiently specific to put the latter upon her proof. It is in all of them alleged that in the year 1881 proceedings were instituted in the circuit court of the United States for the district of Nebraska, by one Henry M. Lewis as plaintiff, for the foreclosure of said pretended mortgage, in which Wellington R. Burt, who then held the property in controversy through the sheriff’s deed herein mentioned, was made a defendant; that issue was joined by the answer of said Burt, and the reply of the complainant, Lewis, and that on the 28th day of May, 1883, a decree was entered in
1. The first question to which we will give attention is presented by the ruling of the district court in rejecting as evidence a copy of the mortgage described in the petition. Matthew Baldwin, in his deposition, after stating that the mortgage was given as security for money advanced and paid for his benefit by his father, the mortgagee, testified further as follows:
Q. Mr. Baldwin, you may examine the paper which I now show you, a copy of which is marked “Exhibit A,” and attached hereto as a part of this interrogatory, and state whether you have ever seen it before and what it is.
A. I have seen the paper. I wrote it and it is a note which I gave to my father accompanying the mortgage in Douglas county, Nebraska.
Q,. You may examine the paper, which I now show you, which is attached hereto as a part of this interrogatory and marked “ Exhibit B,” and state what said paper is.
*252 A. This is a copy of the mortgage which I gave father on lands in Douglas county, Nebraska.
Q,. Now, Mr. Baldwin, you may state when and where this note and mortgage were delivered to your father.
A. They were delivered to father some time in August, 1875, at Flint, Michigan, at the house of Mr. A. C. Johnson.
In connection with the deposition containing the evidence quoted, the paper therein reierred to as “Exhibit B” was offered in evidence and received subject to the objection that it was “incompetent, immaterial, and not the best evidence.” The deposition of A. C. Johnson was then read, from which it appears that the witness was.for more than forty years the legal adviser of the deceased, Morgan Baldwin, and, since the death of the latter, has stood in the same relation toward the plaintiff, his widow. He fully corroborates Matthew Baldwin in respect to the delivery of the note and mortgage. He further testifies that said mortgage was placed in his hands for safe keeping in the year 1880, soon after the death of the said Morgan Baldwin; that he last saw it in the fall of 1882, when it was still in his possession, and that he has never surrendered possession thereof to any person, although he is now unable to find it after the most diligent and careful search among the papers in his office and his residence. Plaintiff thereupon offered in evidence also the record of said mortgage in the office of the register of deeds for Douglas county, and which was received subject to the above objections. At that point the objections mentioned were argued to the court and sustained, and, according to the bill of exceptions, the action dismissed for want of competent evidence of the mortgage described in the petition. Judging from the opinion of the court which we find in the record, it would seem that the argument in support of the objection was directed exclusively to the record of the register of deeds as independent evidence, and the copy identified by the witnesses above
2. One contention of the defendants, as we have seen, is that the mortgage was without consideration and a fraud upon the creditors of the mortgagor, Matthew Baldwin. The only evidence adduced by either party which bears upon the subject of consideration is the testimony of Matthew Baldwin, who swears that the note above described represents money actually paid for and advanced to him by his father, and the witness Johnson, who swears that he saw and examined the notes paid for his son by Morgan Baldwin, and that some of them were paid with money loaned by the witness. That evidence we think quite sufficient to overcome the presumption of fraud arising from the relationship of the parties and establish prima facie the good faith of the mortgage. But admitting that it is in fact without consideration, and therefore fraudulent as-to creditors, is that fact available as a defeuse in this action ? It may be stated, as a general rule, that contracts which are valid, except as against those in adverse interest, cannot be assailed by persons not prejudiced thereby. A voluntary settlement is void only as to creditors, and as to them only so far as may be necessary for their protection. As to all other purposes it is valid and effective. As said! in Curtis v. Price, 12 Ves. [Eng.], 103: “Satisfy the creditors and the settlement stands.” (See, also, May, Fraudulent Conveyances, 689; 1 Story, Equity Jurisprudence [12th ed.], sec. 371; Bump, Fraudulent Conveyances [2d ed.], 315, 481; Wiltsie, Mortgage Foreclosure, 395; Freeman v. Auld, 44 N. Y., 50; Bradley v. Snyder, 14 Ill., 263; Richardson v. Welch, 47 Mich., 309.) None of the defendants are creditors of Matthew Baldwin, and none claim through him. On the other hand, all claim through the prior mortgage from Gallagher to Burt, which was, it is conceded, a prior lien, and the titles acquired through it are not called in question. Matthew Baldwin might have
3. Are the defendants bona fide purchasers or lien-holders? The various answers, so far as they refer to the bona fides of the defendants, differ widely, and it may be doubted whether that issue is presented by the pleadings; but a consideration of that question is unnecessary in this connection, for the reason that such a contention is entirely unwarranted by the proofs. It was said in Bowman v. Griffith, 35 Neb., 361, that “where a claim to real estate can be sustained only on the ground that the person asserting it is a subsequent purchaser in good faith, such person is required to show affirmatively that he purchased without notice of the equities of another and relying upon the apparent ownership of his grantor.” No evidence was offered tending to prove that the defendants, or any of them, purchased in ignorance of the plaintiff’s mortgage, or that they advanced any money or other consideration relying upon Burt’s title as it appeared of record. They are, therefore, not within the rule staled, and are chargeable with notice of whatever equities existed in favor of the plaintiff at the time when their several interests were acquired.
4. It is strenuously insisted that the bar of the statute is complete and that the decree should be affirmed on that ground. That contention has for its basis the proposition
5. We will now examine the question presented by the plea of former adjudication. No evidence whatever was given or offered by any of the parties upon that branch of the case, hence our investigation must be confined to the pleadings. Of the several answers perhaps that of Burt contains the most specific allegations, and it is sufficient for our purpose to refer to it alone. After alleging that a suit was commenced in the circuit court by Lewis, a citizen of the state of Wisconsin, as assignee of the plaintiff for the foreclosure of the mortgage now in controversy, and the service of process upon Matthew Baldwin, the mortgagor, and Burt, the answering defendant, and the answer therein by the latter, he concludes as follows: “In the said answer therein so filed by said Burt it was alleged that said Lewis was not the real party in interest in the suit; that the said pretended note and mortgage were without consideration and denied that there was any sum whatever due on said
The reply, so far as it refers to above mentioned plea is as follows: “Plaintiff denies the matters in controversy in this action were in any manner determined or adjudicated in said action in the circuit court of the United States for the district of Nebraska, wherein Henry M. Lewis was complainant and Matthew Baldwin and others were defendants, and states the fact to be that said court found that Henry M. Lewis never had possession of said note and mortgage and never paid' any consideration therefor, and
.As preliminary to the principal contention it is argued that the denial that Lewis’ bill “ was dismissed on its merits” is a mere conclusion which tenders no issue of fact. The subject of pleading where the defense is estopped by judgment or decree has no place in this discussion, since, granting the reply to be defective as claimed, it is clear that the defendant was guilty of the first vice in that regard and will not now be heard to complain. The allegation that a judgment or decree is on the merits without stating further facts, is certaintly met by a denial in the same terms. We therefore assume the facts relied upon as a former adjudication to be well pleaded. But we agree with counsel for the plaintiff that such facts are not sufficient in law to create an estoppel by judgment, although we reach that conclusion by a somewhat different ' process of reasoning. Counsel take it for granted that the answer in the former suit tendered two issues, one involving the merits of the cause and the other the right of Lewis, the plaintiff, to maintain an action on the mortgage, and they contend that in the absence of extrinsic evidence that the decree is based upon the merits of the former suit, it will not in this proceeding be treated as conclusive. An examination of the answer has, however, led us to the conclusion that there was presented in that suit a single de
Reversed.