173 N.W. 782 | N.D. | 1919
Lead Opinion
Appeal from the district court of Stark county, W. C. Crawford, Judge.
This appeal is .from the judgment as amended. It appears that,
This case is another phase of the litigation which has been in progress for about twenty years between the same parties. Other cases heretofore litigated were: Beyer v. Investors’ Syndicate Co. 31 N. D. 247, 153 N. W. 476; Investors’ Syndicate v. Letts, 22 N. D. 452, 134 N. W. 317; Beyer v. North American Coal & Min. Co. 37 N. D. 319, 163 N. W. 1061.
On the 28th day of December, 1911, the Investors Syndicate commenced an action to foreclose what is termed the cumulative mortgage on the N.-| of section 21 and the S.E.j- of section-16, T. 139, XL 94, Stark county, North Dakota. In that action it demanded judgment against the North American Coal & Mining Company for $3,000 and for a decree of foreclosure; in that action the North American Coal & Mining Company defaulted. John E. Beyer applied to the court for permission to intervene, which was granted. The Investors Syndicate answered the petition of intervention, and issues were duly joined in that case. Under the issues joined, the case was tried to the court, and the alleged mortgage for $3,000, dated the 20th day of March, 1899, which covered the land in question, was by the court declared to be fraudulent and void and against the interest of the stockholders of the North American Coal & Mining Company and against the interest of John F. Beyer as a stockholder in that corporation. In that case it was determined from the testimony therein that Williams, who was the promoter and president of the coal company, and Tappen, the secretary of the Investors Syndicate, were business associates before the organization of the coal company; that when the coal company was first organized, Tappen received stock therein for which he never paid and which was canceled from the books of the company; and that at one time Tappen was elected an officer of the coal company; that Williams took three fifths of the stock of the coal company for nothing-excepting his services and did nothing to develop the coal mines; that he either borrowed or pretended to borrow $1,118.43 of the Investors
In the trial of that case in the district court, the following findings of fact were made: “I further find that the North American Coal & Mining Company and Herbert Williams and his said wife, L. Y. Williams, and his said treasurer, F. P. Nicoll, have had full and complete knowledge of the fraudulent purposes for which said mortgage and note was made and executed on the said 20th day of March, 1899, and that the plaintiff herein, the Investors Syndicate, has at all times had full and complete knowledge that said note and mortgage was fraudulently made, executed, and delivered as the pretended act of said North American Coal & Mining Company, and was without any consideration whatsoever in the premises, and was not the act of the said North American Coal & Mining Company.”
Another finding was to the effect that- said mortgage, note, and coupon notes are fraudulent and void, and have been at all times fraudulent and void and without consideration whatsoever, and are not a lien upon the lands herein described. A decree was entered in the trial court in accordance with the findings of fact, and the conclusion of law was that the ncte and mortgage were null and void and taken and received, by the Investors Syndicate with full knowledge that they were without consideration and were fraudrilent and void as to stockholders of said company and as to the North American Coal & Mining Company. A judgment of dismissal of that action was entered by the trial court; costs were awarded in favor of John Beyer, and an appeal from that judgment was taken to this court on the 23d day of February, 1914, and the judgment of the district court of Stark county was affirmed. 31 N. D. 259, 153 N. W. 472. The court in that opinion
On February 26, 1912, Beyer, who had paid taxes for several years upon the land in question, commenced an action against the North American Coal & Mining Company and Producers & Consumers Cooperative Company to have the question of the liens and taxes which he had paid on the property determined to be liens, and to recover judgment for the same. The Investors Syndicate became parties to that action, and, in addition to entering a general denial, claimed that it had an estate, interest, and lien on the N.W.J of section 16 and the land which we have heretofore described by virtue of what is known as the Dana mortgage and by virtue of the cumulative mortgage above referred to. In the trial of that action, the court found that Beyer was the owner of the judgment of record in an action in the United States court of North Dakota, against Letts, the Producers & Consumers Company, and the North American Coal & Mining Company, for the sum of $320, and that it was a lien in his favor against said lands for that sum. The trial court found that Beyer had paid certain taxes, and in all he was declared by the court to be entitled to a lien upon said land for the sum of $984.64, together with costs, in all amounting to $1,046.92. The judgment was entered on the 26th day of August, 1913, which was about the time when judgment was entered against the Investors Syndicate, dismissing its foreclosure action against the North American Coal & Mining Company. On the same day that judgment was entered in Beyer’s favor, an execution was issued upon the judgment, and the three quarters of land first described were levied upon and sold at sheriff’s sale to satisfy such judgment, and was bid in by Beyer, and a sheriff’s certificate issued to him. That certificate was recorded with the register of deeds on the 12th day of November, 1913.
This brings us to the final question in this case: Was the redemption attempted to be made by the Investors Syndicate of any force, effect, or validity? If it were, then they have by that redemption,
Section 'T'753, Compiled Laws of 1913, declares who may redeem where property is sold subject to redemption. Under that section, redemption may be made: (1) By the judgment debtor or his successor in interest; (2) by a creditor having a lien by judgment, mortgage, or otherwise on the property sold or on some share or part thereof subsequent to that on which the property was sold. If the Investors Syndicate had any right to redeem, such right was based upon and arose from what is teimed the cumulative mortgage. It will be remembered that the cumulative mortgage, prior to the time of the alleged redemption, had been declared fraudulent and void by the trial court of Stark county; that appeal had been taken from the judgment in that case to the supreme court, and it was during the pendency of that appeal that the alleged redemption was made. The theory of the defendants is that, notwithstanding such mortgage had been declared fraudulent and void by the trial court, it nevertheless remained a lien upon the land until the appeal from the judgment was finally disposed of in the supreme court; that it was, therefore, sufficient to support the redemption; that the mortgage pending the appeal still remained a lien upon the land sufficient to authorize the defendants to make such redemption. In other words, the defendants, in effect, claim that the mortgage was at all times not fraudulent until the trial court declared its invalidity on the grounds above mentioned, and that it still remained a lien until the final disposition of the case.
We are of the opinion, however, that this view is erroneous and unsound. The fact is, the mortgage never had any validity; it never became a lien against the land in question, — it never -was of any legal force nor effect and the defendants at all times knew this, — it was a party to the fraudulent mortgage, — it knew when it took the mortgage it was fraudulent and void. Every stockholder of the Investors Syndicate knew or must be held to have known that it was fraudulent and void. It was in no way binding nor effective as a lien upon the
'Much has been said about the affidavit of Tracy M. Bangs, the attorney for defendants. This affidavit, so far as showing any right 'in the defendants to redeem, is of no effect. The affidavit cannot make the fraudulent and void mortgage valid. The cumulative mortgage to .the Investors Syndicate never was a mortgage upon the land in question. It was fraudulent and void from its inception, and the defendants knew it. It is worse than folly to contend that any right of redemption or property right may be acquired or based upon that mortgage. In order for one to be a redemptioner within the statute, he must be the holder of a valid, subsequent mortgage or lien to that from which redemption is made.
There is another reason why, as a matter of law, the defendants were not redemptioners. The alleged mortgage of the Investors Syndicate was dated March 20, 1899. The judgment upon which the land was sold was entered on the 26th day of August, 1913. If the mortgage were valid, it would be a prior, not a subsequent, lien upon the land to the judgment. The defendants, in order to be redemptioners within the statute, must have a lien by judgment, mortgage, or otherwise on the property sold or on some- share or part thereof subsequent to that on which the property isas sold; the defendants’ alleged mortgage being a prior lien, and not a subsequent one, it was not a qualified redemptioner under the statute, and had no right to redeem, and for this additional reason its attempted redemption was a nullity.
The court in that case had under consideration the very mortgage which is claimed by defendant to be the basis of its right to redeem. This alleged redemption has as its only basis the fraudulent agreement so strongly condemned by this court in that case. That the defendants acquired no legal right or interest in said land by their attempted redemption is too plain to require further comment. The trial court properly held that they were trustees ex maleficio for the benefit of the North American Coal & Mining Company.
The defendants cite as authority to sustain their position the case of the North Dakota Horse & Cattle Co. v. Serumgard, 17 N. D. 466, 29 L.R.A.(N.S.) 508, 138 Am. St. Rep. 717, 117 N. W. 453. That was a decision of this court. In that case, Sannan was assignee of four mortgages, which were prior liens to the one which was foreclosed and from which redemption was made by him, the basis of his redemption being the prior liens. This court held in that case, though Sannan was not a statutory redemptioner, he having redeemed and
There is another reason why the judgment’ of the trial court should be sustained. It is found in the 17th finding of fact of the trial court, where it in substance said: I further find as a fact in this cause that at the time of making the so-called redemption of the sales made in behalf of John E. Beyer, as plaintiff, against the Investors Syndicate et al., as defendants, in which certificates of sale were issued to John E. Beyer for the land in question, the Investors Syndicate, defendant herein, had no right, title, interest, claim, or demand of any kind whatsoever upon the lands and premises sought to be redeemed; that the acceptance of the money paid to the sheriff of Stark county and subsequently paid to John E. Beyer was paid under a misapprehension and mistake.
We think the finding which we have set forth in substance is well sustained by the evidence. It is not necessary to set forth nor discuss the evidence; it is sufficient to say it sustained the finding of the trial court. If the redemption money was paid to Beyer and received by him while laboring under the misapprehension of fact and mistake, he waived none of his rights by so receiving it. He has returned the money and tendered it to the Investors Syndicate in open court. The trial court found that the $1,200 would cover the amount of money which the Investors Syndicate paid for the sheriff’s deed.
The plaintiff recovered judgment for the costs and expenses he had
The judgment of the trial court is in all things affirmed. The respondent is entitled to the statutory costs of appeal.
Concurrence in Part
(concurring specially, and in part dissenting) . I concur in the result reached, but do not concur in the reasoning adopted, in the majority opinion. That opinion in effect holds that the redemption made by the Investors Syndicate was unavailing, and conferred no rights upon it, because it was not a proper redemptioner. With this I do not agree. It is well settled that “if a redemption made by a disqualified person is acquiesced in by the purchaser or other person from whom redemption is made, it will estop such per.son, after he has received the redemption money, from denying the validity of the redemption.” 3- Freeman, Executions, 3d ed. § 317. “The holder of the sheriff’s certificate and the person redeeming are the only persons concerned in the regularity of the redemption. The owner of the certificate may deal with it as he sees fit. He may sell or assign it, or he may retain it and insist that anyone who wishes to secure his right thereunder by redemption shall do so only by strictly complying with the statute, or ‘he may waive his right to require exact and formal observance of the statutory mode, and his acceptance of the redemption money will be such a waiver.’ ” McDonald v. Beatty,