19 S.D. 248 | S.D. | 1905
This is an action to recover from the defendants $500 alleged to be due the plaintiff upon a certain promissory note executed by the defendant Schnose, and its payment assumed by the other defendants. The case was tried to the court without a jury, and, the • findings and judgment being in favor of the defendants, the plaintiff has appealed.
The facts as found by the court may be summarized as follows: In December, 1889, the defendant Schnose obtained a loan from the plaintiff, giving it the promissory note in controversy in this action, and to secure its payment, executed a mortgage on 80 acres of land in Turner county. In 1891 Schnose conveyed the land so mortgaged to Mrs. Roberts, who, by the terms of the deed, assumed and agreed to pay the said note and mortgage. In 1894, Mrs. Roberts having died, Alvina McGinn succeeded to her title by succession and a deed from her father to the premises so mortgaged, and, not being able to take up the mortgage, she and her husband, Christopher McGinn, in 1894 entered into a contract with the plaintiff for an extension of time for a period of five years. The plaintiff stipulated that time for payment should beso extended, and in consideration of such extension the said McGinns, in effect, covenanted and agreed to pay the said note and mortgage. The said .Schnose had no knowledge or notice of this agreement extending the time until some years after the same was executed. In an action tried in the circuit court of Turner county in 1890, in which one Hunter was plaintiff, and the Mc-Ginns defendants, it was determined and adjudged by the court that the title of Alvina McGinn to the property mortgaged was inyalid, and that Schnose was not che owner of the
It will thus be seen that the note was originally executed by Schnose, and secured by a mortgage on property to which he believed he had a good title; that subsequently he conveyed the property to Margaret Roberts, who assumed to pay the note and mortgage as a part of the purchase price; that Alvina McGinn acquired the legal title to the property, and, in the contract of extension of the time of payment with the plaintiff, she and her husband assumed, in effect, to pay the said note and mortgage under the honest belief that she had acquired a legal title to the same, and that the plaintiff had a valid. lien upon the same by its mortgage thereon; that the agreement on the part of the plaintiff extending the time was made without the knowledge or consent of Schnose, and that more than six years had elapsed after the conveyance by Schnose, the maturity of the note, and the payment of interest by him before the commencement of this action.
The theory upon which the court’s conclusions are based evidently was that the defendants McGinn entered into the contract for the extension of time with the plaintiff under the mistaken belief that Schnose was the owner of the property at the time he executed the mortgage, and that she had acquired a valid and legal title thereto by the, deed from Schnose to her mother, and that, as she in fact acquired no title, and had entered into the contract by mistake, the contract for an extension had never become operative as a contract, and she and her husband were not hable theron; and that, having paid the plaintiff $240 of interest under the mistake as to the title, Alvina
The correctness of these conclusions of law is challenged by the appellant, and it contends that inasmuch as the McGinns, in the agreement for extension of time, stipulated, in effect, for the payment of the note and mortgage, they were conclusively bound by that agreement; (2) that as the note was executed at Des Moines, Iowa, and made payable there, the contract, as to Schnose, is to be determined by the law of Iowa, and that by the law of that state the agreement for the Extension of time would not have the effect to discharge him from his liability, and that the action, as to him, was not barred by the statute of limitations.
We are of the opinion that the court was clearly right in holding that the contract entered into by the McGinns with the plaintiff for an extension of time was made under a mutual mistake of fact by all of the parties, and that the contract, therefore, was not binding upon the McGinns. It is quite clear from the facts found that the only consideration for the stipulation made by the McGinns in the contract for the extension of time was the mistaken assumption on their part that
The Civil Code of this state provides upon the subject of contract as follows: “It is essential to the existence of a contract that there should be (1) parties capable of contracting; (2) their consent; (3) a lawful object; and (4) sufficient cause or consideration. ” Section 1189, Rev. Civ„ Code. And upon the subject of consent and mistake as follows: “The consent of the parties to a contract must be (1) free; (2) mutual; and (3) communicated by each to the other. ” Section 1194, Rev. Civ. Code. “An apparent consent is not real or free when obtained through * * * (5) mistake.” Section 1196. “Mistake may be either of fact or of law. ” Section 1205, Rev. Civ. Code. ‘ ‘Mistake of fact is a mistake not caused by the neglect of a legal duty on the part of the person making the mistake, and consisting in (1) an unconscious ignorance or forgetfulness of a fact past or present, material to the contract, or (2) belief in the present existence of a thing material to the contract which does not exist, or in the past existence of such a thing, which has not existed.” Section 1206, Rev. Civ. Code.
It is quite clear that in the case at bar there was a mistake of fact not caused by the neglect of. a legal duty on the part of the defendants McGinn; that there was a belief at the time the contract was entered into of the present existence of a thing material to the contract, namely, that Alvina McGinn had a valid legal tide to the property, subject to the mortgage, and that the mortgage assumed was a valid mortgage upon the property; and it is equally clear that had they not honestly be
The contention of appellant that Alvina McGinn could only recover for payments made within six years prior to the commencement of this action is not tenable, for the reason that the statute of limitations as to her counterclaim was not pleaded.
This brings us to the consideration of the question as to the liability of Schnose. Schnose, as we have seen, conveyed the property to Margaret Roberts, who assumed the payment of the indebtedness of Schnose to the plaintiff as a part of the purchase price of the property, with the knowledge and consent of the plaintiff. Margaret Roberts, therefore, by this assumption of the debt, and her successor, Alvina McGinn," by
In Miller v. Kennedy, supra, this court, speaking by Mr. Justice Fuller, says: “In accordance with a familiar principle, where the owner of mortgaged property and a purchaser thereof agree th&t, as a part consideration, the grantee shall pay the mortgage indebtedness, the relation of principal and surety, as between the parties, is thereby created, and the grantee becomes the principal debtor, while the grantpr and mortgagor occupy the relation of a surety, responsible only
The contention ol the appellant that as the note and mortgage were executed in Iowa, and made payable there, the law of Iowa should govern, is untenable, for the reason that, so far as the record discloses, the law of Iowa was not pleaded or introduced in evidence on the trial; and hence this court must presume, for the purposes of this decision, that the law of Iowa is identical with the law of this state upon the subject of the effect of the contract of extension in releasing Schnose
Finding no error in the record,. the judgment of the circuit court and order denying a new trial are affirmed.