116 Neb. 99 | Neb. | 1927
Lead Opinion
This is an appeal by John M. Folda, one of the defendants, from the judgment and decree of the district court, finding his mortgage to be null and void and dismissing his cross-petition.
There is not so much dispute as to the facts as to the conclusions to be drawn therefrom. This situation calls for a rather complete and definite statement of the'evidence.
Frank Turna, a resident of Colfax cdunty, died testate on or about October 21, 1917. He left surviving him his widow, Agnes Turna, and the following children: Stephen Turna, age 17, Emil Turna, age 14, Emilie Turna, age 11, Lumir Turna, age 10, Lambert Turna, age 6, and Paulina Turna, age 4. The widow duly and formally elected under the statute not to take under the will. She administered the estate, and on November 11, 1918, a decree on her final account was entered, assigning to her a homestead interest in the premises, as well as a one-third interest, and assigning to each of the children a one-ninth interest in the land, described as the south half of the northwest quarter and the northeast quarter of the northwest quarter of section 29, township 20, in Colfax county, Nebraska. The decree further found that the widow had personally advanced $4,716.42 besides $24 additional court costs for the benefit of the estate and gave her a charge and lien upon said real
On September 9, 1918, Agnes Tuma executed a mortgage for $5,000 to Frank C. Hrabak, who was a cashier of the Colfax County Bank, located at Howells, Nebraska, on her undivided one-third interest in the 120 acres. There is testimony to the effect that this mortgage was transferred by Hrabak to the bank before the transactions which gave rise to this case; at any rate, the bank became the owner of it. November 30, 1917, Hrabak was appointed guardian of the six minor children and was such guardian until his resignation, tendered on July 16, 1920, was accepted on September 18, 1920, on which day Agnes Tuma was appointed as their guardian. On August 25, 1924, Agnes Tuma was discharged as guardian for the minors, and on the following day Stephen Tuma, who had then become of age, was appointed guardian of his five brothers and sisters. On March 2, 1920, Agnes Tuma gave a mortgage, recorded March 29, 1920, to E. Quesner, for $11,000, on her interest in the 120 acres described and covering also an adjoining 40 acres-which she purchased on speculation. This mortgage was released September 25, 1920, the release being recorded October 4, 1920.
On September 13, 1920, by a mortgage recorded September 28, 1920, Agnes Tuma mortgaged for $19,000 to herself as guardian of the minors the 120 acres and the adjoining 40 acres; the records show a release of this mortgage March 1, 1923, the release being recorded five days later. On November 21, Í923, Agnes Tuma gave a mortgage for $1,161.65, which was recorded the next day, in favor of Joseph K. Suchan and Rudolph L. Suchan, covering the 120 acres.
The defendant, H. D. Myers, had a judgment lien against .Mrs. Tuma in a justice court for $199.99, and the transcript was filed in the district court May 10, 1923.
In February, 1920, Agnes Tuma, with her son Stephen, went to John H. Roper, at Dodge, and employed him to procure a loan from the Federal Land Bank of Omaha, agree
The inception of the trouble reflected in this action was the purchase by Mrs. Tuma late in 1919 or early in 1920 of the 40 acres adjoining the Tuma farm. She contracted to pay $12,000 for it, paid $1,000 down and was to make settlement by March 1, 1920. To finance this she borrowed $11,000 temporarily from E. Quesner, on the mortgage heretofore referred to, and then, to help discharge the Quesner loan, she sought and secured the loan from the plaintiff. Out of this loan she did not receive the full $10,000 in money. She had to take $500 in shares of the Surety National Farm Loan Association and to pay the commission of $100, as well as other items of expense, so that she received less than $9,500 as the net proceeds of the mortgage.
The district court found and decreed as follows: That the Federal Land Bank of Omaha, plaintiff, by virtue of its mortgage, has a first lien for $10,508.28. which should be reduced by the cancelation of the par value of 100 shares of Mrs. Tuma of the par value of $5,000 in the Surety National Farm Loan Association and by the retirement of the equivalent number of shares at par by the plaintiff, so that the net amount of plaintiff’s first lien is $10,008.28, to bear interest at 8 per cent, per annum from the date of the decree; that the- defendants' Joseph K. Suchan and Rudolph L. Suchan have a second mortgage lien on the premises, amounting to $1,299.10, with interest at 10 per cent, per annum; that H. D. Myers has a judgment lien which is a third lien on the premises, but that Agnes Tuma is the head of a family and as such has a homestead interest in said premises, and that the judgment lien of said defendant Myers, amounting to $228, to bear 7 per cent, interest, is subject to the homestead right of Agnes Turna; that the mortgage of $10,000, set up by John M. Folda, is null and void and should be canceled, and that the said John M. Folda is not entitled to have the release of his prior mortgage of $5,000 set aside and said prior mortgage reinstated; and that the mortgage given by the defendant Agnes Tuma to the defendant Agnes Tuma, as guardian of the interveners, for $19,000, is a subsisting mortgage and lien upon the real estate, subject only to the liens hereinbefore found, and that the interveners'are the owners of said mortgage lien; that there is now due and payable thereon the sum of $23,433.33, to bear interest at 7 per cent, from the date of the decree.
The first thing to determine is whether the referee’s deed to Mrs. Tuma is void because of failure to collect the purchase price of the partition sale of the land. If it is void or is voidable as against innocent purchasers, then the interveners whose interests in the estate were sold at the partition sale would be entitled to relief from the mortgages and liens asserted by the plaintiff and other parties to the suit, whether these lienors are innocent purchasers or not.
Section 9264, Comp. St. 1922, relating to partition sales', provides that no conveyance can be made until all the money is paid, or without receiving from the purchaser a mortgage upon the land so sold or other equivalent security. It provides that, if the sale be confirmed, an order shall be entered directing the referee to convey. Section 9265 provides that such a conveyance, when recorded, shall be valid against all subsequent purchasers and against all interested persons who were parties to the partition proceedings. In this matter, the referee reported to the court that he had received the money and thereupon the court confirmed the sale. There appears nothing, therefore, in the statute cited that would prevent a later purchaser, who was innocent in fact, from acquiring good title. This view is supported by Kazebeer v. Nunemaker, 82 Neb. 732, holding that, in a partition suit regular on its face and with fraud absent from the face of the proceedings, the parties thereto are estopped thereby, although the judgment is erroneous arid would have been reversed on appeal; and by Manfull v. Graham, 55 Neb. 645.
In a discussion of the Federal Land Bank mortgage; it should be noted that it was stipulated on the trial that this mortgage is a first lien, “at least to the extent of the equitable lien which the court granted Agnes Tuma in the sum of $4,716.42, plus her one-third interest.” ' The' court,' however, gave the plaintiff an unconditional first lien on the
“A guardian having the legal power to sell or dispose of the personal estate of his ward, in any manner he may think most conducive to the purposes of his trust, a purchaser, who deals fairly, has a right to presume that he acts for the benefit of his ward, and is not bound to inquire into the state of the trust; nor is he responsible for the faithful application of the money, unless he knew, or had sufficient information at the time, that the guardian contemplated a breach of the trust, and intended to misapply the money;.*107 or was, in fact, by the very transaction, applying it to his own private purpose.”
Moreover, we are impelled to support that policy of the law which seeks the stability of titles. If sales, which are perfectly fair on their face, which appear to have been conducted according to law, and have been approved by the court, as was this partition sale, are to be held invalid by reason of secret agreements between a referee and the guardian, not ascertainable by such investigations as would ordinarily be made by a reasonably prudent person, then all titles thereby acquired would be rendered practically unmarketable and estates could not realize at a referee’s or guardian’s or other judicial sale the fair value of the property sold. We therefore hold that the Federal Land Bank mortgage was valid and is a first lien on the premises described in it.
The John M. Folda mortgage for $10,000, and the Hrabak mortgage for $5,000, both represented investments of the money of the Colfax County Bank. The Hrabak mortgage for $5,000 was for money borrowed by Mrs. Tuma and used to pay debts and expenses of the Frank Tuma estate. No question as to its validity could have been raised. It was released for the purpose of allowing the' plaintiff’s mortgage to come first and then was merged in the larger mortgage for $10,000, taken in the name of John M- Folda, for the increased amount, to cover $5,000 additional money borrowed by Mrs. Tuma. The $5,000 mortgage covered Mrs. Tuma’s undivided one-third interest in the land, which she had a perfect right to mortgage. The $10,000 mortgage originally covered the entire title of the home place and the additional 40 acres, which latter tract was released when it was sold. Hrabak, while guardian of the minors, was appointed and acted as referee. There was no inconsistency in these two offices. But he was also an officer in the, Colfax County Bank and owed fealty to it as to the Folda mortgage owned in fact by that bank. When, as referee, he sold the land, he filed his receipt as guardian, indicating that, as such guardian, he had received $15,999.30 in money as. pro
The Myers judgment became a general lien against the real estate of Agnes Tuma on May-10, 1923. It, unlike the other liens, was subject to her homestead rights.
We are not in accord with the decree of the trial court wherein the court reinstated the $.19,000 mortgage of Agnes
We áre therefore of the opinion that the equities suggest a decree ordering a sale of the land, and that out of the proceeds there be paid as follows: First, the lien of the plaintiff; second, the lien of Suchan brothers; and, third, the lien of the Hrabak mortgage, but that these liens be discharged, so far as the lien and interest of Mrs. Tuma in the land be sufficient, out of her such interest and lien (with
For the reasons given, the judgment is reversed, with directions to enter a decree in accordance with the views herein expressed, and with authority, not only to consider the evidence already taken, but to take further evidence, if need be, to ascertain the value of the homestead interest of Agnes Tuma and, if necessary, to show the amount due on the reinstated Hrabak mortgage.
Reversed.
Dissenting Opinion
dissenting.
While I concur in the major part of the majority opinion, I am unable to concur in the views expressed, in so far as they relate to the $10,000 Folda mortgage.
It appears that Mrs. Turna owed the $5,000 Hrabak mortgage to Folda, or the bank of which he was an officer; that this mortgage was released and she borrowed an additional $5,000 and executed to Folda the new mortgage of $10,000 for the amount she then owed. To secure this, she gave a mortgage upon the entire tract of land on the theory that she was the owner of all; but, as properly held by the majority opinion, the sale to her in the partition proceedings was voidable and she therefore possessed only the interest in the premises which she had before the sale. The mortgage which she executed was valid as between her and Folda to the extent of her interest in the mortgaged premises. In my view, it should be held that the mortgage of $10,000, or the unpaid portion thereof, is a valid lien upon all the -interest she owned in the land at the time of the execution of the mortgage. It may be of small importance financially to Folda whether this is done or the Hrabak mortgage is reinstated; however, it is not' the amount but the principle which is involved. Where one borrows money, and, to secure repayment, gives a mortgage upon land, where he owns only an interest therein, the mortgage should be held valid and a lien upon the interest of the mortgagor in the land.
I concur in the view that only the interest of Mrs. Turna can be affected by the mortgages which she gave, except the mortgage of the plaintiff bank, which stands in the position of an innocent purchaser.