Bovey-Shute Lumber Co. v. Farmers & Merchants Bank, 173 N.W. 455

Bovey-Shute Lumber Co. v. Farmers & Merchants Bank

173 N.W. 455 | N.D. | 1919

Robinson, J.

In the. summer of 1915, at Devils Lake, the plaintiff was a practical, hard-hearted, and hard-headed lumber and material dealer; and at Leeds, the defendant was a big-hearted banker. Mr. Wood was its cashier, general agent, and general manager. He was virtually the bank; and, sad to say, he has departed this life and has gone where the good bankers go, and that is the cause of this law suit. Fred Cropper was a good customer, a borrower, and a servant in the bank, — the borrower is the servant of the lender. Cropper had three quarter sections of land, on which the bank and others had mortgages amounting to over $12,000,. and on his crops for the year 1915 the bank had a mortgage for $3,400. Poor Cropper, he had no house or granary, and for that reason he was not well prepared to crop the land for himself or the bank. To aid him and itself, and to secure its loan, the good bank request Bovey-Shute to take a mortgage on the land and then to furnish material and erect a. house and granary for Cropper. Bovey-Shute refused to do it unless the bank would guarantee payment or agree to reduce the mortgage liens against the land to $8,900. It did agree to reduce the mortgage liens $3,400, the sum for which it held a chattel mortgage, — and up went the house and the ■granary. For material and construction Cropper made to the company a mortgage for $1,665 and interest.

Meantime there were foreclosures and redemptions, thus:

In December, 1916, the lumber company foreclosed for $1,213.85.

In January, 1917, Frank Spaulding foreclosed the first mortgage for $3,660.54.

On August 14, 1917, Bovey-Shute redeemed, paying $4,354.29.

Then, within three days, under a mortgage of March 1, 1915, the bank redeemed, paying $4,361.91.

Then, on August 24, 1917, Bovey-Shute redeemed from the bank, paying $6,309.77. By its redemption Bovey-Shute paid the bank on its mortgage $1,947.59. For that sum, with interest and costs, the trial court gave judgment against the bank, and did also adjudge that the mortgages against the land in excess of $8,900 should be subjected to the liens of the lumber company. The judgment was strictly in accordance with the agreement of the bank, as made by its deceased manager.

However, appellants claim that the agreement is ultra vires, — that *71it was beyond tbe power and authority of the bankers, and that the redemption was a voluntary payment. On those points it is needless to cite authorities. The right of a bank to malee loans on land and on crops does necessarily imply the right to improve the land and to care for the crops and to make the same available. A bank has the same right as a natural person to care for its property; it is not bound to incur the risk of losing a horse for the want of a nail or a shoe. "When it takes a loan on land and on crops it must have a right to improve the land and to care for the crops. In this case the bank had a perfect right to bargain, as they did, for the construction of a house and granary. It was good business, and it- should not have lead to any litigation.

- In regard to the voluntary payment, nearly $2,000, we must not think it the purpose of Bovey-Shute to make the bank a present of anything. By its foreclosure and redemption from a first-mortgage foreclosure, the bank had put Bovey-Shute Company in a dilemma. The company had to redeem from the bank or to risk the loss of their mortgage and money amounting to over $4,000. Counsel for the bank insist that the proper remedy of the lumber company was to have brought an action to cancel the bank redemption, but the company were business men, and not prophets or clairvoyants and not able to forecast the minds of the judges. They did not want to risk a suit that might have dragged until after the period of redemption. "When a party unjustly contrives to put another in a dilemma, to put him, as it were, between the Devil and the deep sea, and to subject him to necessity and distress, and he jumps one way, it is not for the wrongdoer to insist that he should have jumped the other way.

Judgment affirmed.

Bronson and Grace, JJ., concur in the result.