30 Neb. 593 | Neb. | 1890
This is an action for an accounting and to redeem certain real estate, brought in the district court of Douglas county by Edling against Bradford.
It appears from the record that on the 5th day of October, 1882, Edling and one Anderson leased for ten years lot 8 and the east six feet of lot 7, in block 56, in the city of Omaha. The lessees proposed to erect certain store buildings on these lots. Anderson was a carpenter and builder and resided in Omaha. Edling was a resident of Iowa and advanced $5,000 in the enterprise. Anderson seems to have claimed that he advanced a like sum, but whether he did so or not is left in doubt. After the building was partially completed, and Edling and his associate heavily indebted for material furnished in the construction of the building, an arrangement was made with Bradford to furnish $7,500 to complete the building, and Anderson and wife and Edling executed a chattel mortgage to Bradford as follows:
“ For the consideration of $7,500 in hand paid, and for the purpose of securing the notes hereinafter described, we, John N. Anderson and Tena Anderson, his wife, C. O. Edling and Charlotte Edling, his wife, do hereby give, grant, sell, and convey and mortgage unto Louis Bradford, of Omaha, the following described goods, chattels, and property, to-wit: All buildings, structures, and improvements on lot 8, in block 56, in the city of Omaha, Nebraska, together with all of our right, title, and interest in or to said lot, being a leasehold. And we do covenant
“This sale is made to secure the payment of two certain promissory notes for the sum of $7,500 total; one being for $2,500, of this date, payable in one year; one being for $5,000, of this date, payable in two years; both signed by said mortgagors, payable to order of said Bradford, with interest from date at ten per cent per annum, payable annually.
“Now, if the said Anderson and his wife, and the said C. O. Edling and his wife, shall well and truly pay, or cause to be paid, the said sum of money in said .notes mentioned, with the interest thereon, according to the tenor and effect of said notes, and shall keep and perform all the other covenants and agreements aforesaid, then these presents shall be null and void. But if said sum of money, or any part thereof, or any interest thereon, is not paid when the same becomes due, then in that case, or in case any of said covenants and agreements are not kept and performed, the whole of said sum and interest shall, and by this indenture does, immediately become due and payable, and the said Bradford shall have the right to take immediate possession of said property, and on default herein, to sell the same at public auction, in the manner provided by law, and out of the proceeds of said sale pay
“And it is further agreed and understood that the said Bradford shall have the right at any time to take possession of the above described property and hold the same.
“Signed this 21st day of April, A. D. 1883.
“John N. Anderson.
“Tena Anderson.
“ C. O. Edling.
“In presence of
“Charles Ogden.”
This mortgage was duly acknowledged and filed for record.
On the same day on which the mortgage was executed, Bradford, Anderson and wife, and Edling entered into a contract as follows: '
“It is understood and agreed hereby that Louis Bradford shall have and take immediate possession of the property this day mortgaged to him by Anderson and wife and Edling and wife, being the building and improvements on lot 8, in block 56, in the city of Omaha, Nebraska, including the lot. But the said Bradford, when he shall have been paid in full the amount due him upon said mortgage, is to surrender possession of said property to said Anderson and Edling, and he hereby agrees with them to reassign to them the lease this date by them assigned to him, being a lease of said lot from H. H. Yissclier to them for the term of ten years, which was recorded on the 7th day of October, 1882, in book I, at page 270,- Miscellaneous Rec-cords of Douglas County, Nebraska. Nothing herein contained shall be taken to prevent said Anderson and Edling from going on to complete said building and improvements on said lot.
“It is further agreed by said Anderson and wife, and Edling and wife, and said Bradford that if, in the event of
Louis Bradford.
“John N. Anderson.
“C. O. Edling.
“Tena Anderson.
“In presence of
“Charles Ogden.”
On the same day Bradford obtained from Anderson and wife and Edling an assignment of the lease.
As part consideration for the $7,500, the unsecured note of Anderson to Bradford for $700 was taken as part payment. Edling and Anderson were indebted to Bradford in the sum of $3,700. The remainder, viz., $3,077.30, was paid out by the attorney of Bradford upon the orders of Anderson, as Edling nor Bradford seem neither to have had implicit confidence in Anderson. The amount of this loan failed to complete the building, and Bradford, to protect himself, was compelled to pay the further sum of more than $2,000. In 1883 Anderson conveyed all his interest in the premises to Edling. On November 14,1883, Bradford advertised the property for sale under his chattel mortgage. The notice is as follows:
“Louis Bradford.”
Under this notice one Charles W. Edgerton, a constable, sold, first, the building to Bradford for the sum of $3,200, and closed the sale thereof at 10:30 A. M., and next sold the leasehold to Bradford for $1,000, and closed the sale thereof at 11 o’clock. Bradford was not present in person at the sale, but was represented by a friend who purchased the property in his name. On the trial of the cause an account was ordered of the amount received by Bradford for rents of said premises, etc., and the amount necessarily expended by him, and he was allowed $1,390 as compensation for the care of the property, the same being five per cent of the total amount of money which he had received. The court also ordered Bradford to surrender the premises to Edling on the payment of $248.89.
The three instruments, viz., the chattel mortgage, assignment of the lease, and contract heretofore set forth, executed on the same day — apparently at the same time, are to be construed together. Construing them together, Bradford was created a trustee and placed in possession of the property, with authority to collect the rents and apply them to certain purposes. That he did collect rents is clearly shown by the testimony. While the mortgage contains a condition of forfeiture in case Edling and Anderson failed to make certain payments, yet, from other provisions of the several instruments, it is evident that those payments were to be made by Bradford from the rents of the
In a case of this kind, where accounts are to be adjusted between the parties, and a default declared as the result of the forfeiture, the proper tribunal to determine the rights of the parties is a court of equity. Such a court will construe the contract of the parties and, as far as possible, protect the rights of the mortgagor and the mortgagee, and its decree, unless appealed from, will be conclusive. If, however, a party does not invoke the aid of the court, but proceeds to advertise and sell mortgaged property upon an alleged default and forfeiture, he does so at his peril. The mortgagor has rights in the premises which must be considered, as well as those of the mortgagee. It seems to be assumed in many cases that the mortgagee is the only party entitled to consideration in the premises. He is entitled to the repayment of his loan with lawful interest thereon and no more, but he must, as far as possible, protect the rights of the mortgagor; in other words, he must act in good faith with him.
In the case at bar there was no default of Edling and Anderson, and the advertisement and sale were premature, and the plaintiff is entitled to redeem.
■ Second — It will be observed that in the contract accom
It is contended on behalf of Edling that this being a trust to be exercised by an individual named, it must be exercised by him and not by another; and that.unless the sale is made in conformity to the power, it will be void. There is much force in the argument. A party may have the utmost confidence in the fairness and integrity of the trustee or mortgagee and believe that in case of a forced sale he will conduct the same in such a manner as to obtain the best price possible for the property. This is an important matter. Every person of observation and experience knows that a public sale conducted by a disinterested person, who is anxious to sell the property for the highest price possible, is more’ likely to effect that object than an indifferent salesman, or one whose interest it is to have the property sold for a low price. It is not the policy of the law to permit the mortgagee to disregard the person agreed upon and named in the mortgage, select an auctioneer to his own liking, and become the chief bidder at the sale. In view of the fact, however, that Edling has a right to redeem, we will not make a formal decision on this point without further argument. The amount.allowed Bradford being but five per cent of the entire sum, shows that the property is very valuable, and that it is his duty to account to Edling. The judgment of the district court is
Aeeiemed.