24 S.D. 407 | S.D. | 1909
The facts in these two cases being the same in so far as material to the issues therein, they were) by stipulation of the parties and consent of the trial court, submitted together, and are likewise so submitted upon this appeal. These actions wfere brought to determine adverse claims to two pieces of real estate; both parties in each action claiming from the same common source — the plaintiff -through a deed, and -the defendants through the foreclosure of a mortgage, which mortgage was given by plaintiff’s grantor prior to the deed to plaintiff. The actions were tried to the court without a jury, and, the court having made its findings of fact and conclusions of law in favor of the defendants and entered decrees in conformity therewith, the plaintiff moved for a new trial in each action. Said motion being denied, he has appealed to this court from such decrees and orders denying a new trial.
There were' contained in the bill of exceptions herein numerous assignments of error; some of them going to the question of the sufficiency of the evidence to support the findings of fact. Appellant, however, has abandoned the assignments alleging insufficiency of evidence'by not discussing the same in his brief and attempting to point but in what respect the evidence was insufficient to support any designated finding or part thereof, and for this reason, while the appellant herein has in his brief, at times, referred to the evidence instead of to the findings, we are not concerned with any question of the sufficiency of evidence to support
The facts as found by the trial court are, briefly stated, as follows: One Daniel Nickish obtained a patent from the United States to these two pieces of land, and under such patents was the owner thereof when, on October 30, 1891, he and his wife executed and delivered a mortgage on said lands in favor of the Fidelity Loan & Trust Company, a corporation dealing in mortgage securities and transacting its business at Sioux City, Iowa. That on or about January 7, 1892, such loan company assigned said mortgage to one Moncreiff et al as trustee, which assignment w'as recorded January 9, 1892, in the proper office for such recording. The acknowledgment attached to such assignment was defective, being in the form held insufficient by this court in the case of Holt v. Metropolitan Trust Co., 11 S. D. 456, 78 N. W. 947. On or about November 9, 1895, Nickish and wife by warranty deed conveyed these two tracts of land to plaintiff, which- deed was soon thereafter placed on record, and which deed recited that the title was suject to the “incumbrances of record at this date.” Plaintiff paid Nickish $25 for such deed. Besides the mortgage above mentioned, at the time plaintiff took his deed, a second mortgage was on record against said lands in favor of another company in no manner connected with the parties to this action; which 'second mortgage secured a considerable indebtedness. The first mortgage above mentioned remaining unpaid, foreclosure was commenced in the name of the trustees named in the assignment of such mortgage; the fore
In 1895 parties holding securities which had been assigned organized a new corporation, known as “Fidelity Security Company.” Said Fidelity Security Company was organized for the purpose of liquidating the assets derived from the other company. After this new company was organized, assets of the old company and all its records passed into- the possession of the new company; and, while such new company was organized in the state of New York, the business of realizing on the assets of the company was conducted in the office at Sioux City, Iowa. Shaw and Banna'rd represented the holders of some of these securities. In July, 1895, one T. A. Thompson of Sioux City, Iowa, was appointed as a general western agent for such security company, and Bannard and Shaw, and thereafter Thompson, had full charge personally of the business of said company in relation to such securities, among which securities was this Nickish mortgage. Plaintiff continued in the employ of Thompson from July, 1895, up to 1900, with duties similar to those while under the employ of the old company. When the Nickish mortgage was placed with attorneys for the foreclosure, it was reported upon by plaintiff, and it was through him that the attorneys obtained the papers for the foreclosure. After foreclosure was completed, the title papers passed through plaintiff’s hands and were by him forwarded to Shaw, who resided in New York City. Plaintiff on April 19, 1897, made an entry on the record books in the Sioux City office setting forth that he had forwarded the sheriff’s deed to Shaw, together with the abstract and opinion thereon, and that there were no incumbrances against said land. The negotiations for -transfer of the land -to defendants and preparation of necessary papers to transfer title were had at Thomp--' son’s office, where -plaintiff was employed, and plaintiff had full knowledge of such sale, but never disclosed, except just prior to commencing these actions, to defendants," or any one in their behalf-, his having any interest in the land other than what would appear by an examination of the records in the office of
It is the, contention of respondents that: (1) Appellant • is estopped to question the title of respondents for the reason that by his conduct both active and passive, since acquiring his deed, he has brought about a condition of affairs where it would be unconscionable for him to now assert title as against respondents. (2) Appellant, by taking the deed under conditions then existing, became a trustee of this property for the holders of the mortgage interest, and is therefore estopped to set up any claim of title as against the present cestuis que trust, respondents herein. (3) That statute of limitations bars this action; it being an action to set aside and vacate a foreclosure sale which took place more than 10 years prior to the commencement of this action.
The trial court disregarded, in its conclusions, the question of statute' of limitations, and therefore, we must presume, found with appellant thereon, and we need not consider same. The appellant seems to consider the first contention of respondents,
' Without in any way intimating an opinion as to whether or not the facts found by the trial court would sustain the first contention of respondents, we are fully convinced that the respondents are right in their contention that, when the appellant took his deed to the lands in question, a constructive trust was
In consideration of the first reason we have advanced, we note findings of the trial court bearing thereon to the effect that, in the correspondence leading up to the execution of this deed, plaintiff gave Nickish to understand that this deed was for the purpose of avoiding- a foreclosure. Bearing- in mind that he was known to Nickish as the agent of the holder of the mortgage, can there be any question but that Nickish believed, and plaintiff so realized, that this deed was in fact for the benefit of the. holder of the mortgage to give .to such holder the legal title without a foreclosure? Plaintiff never agreed with Nickish that he would save foreclosure by paying off the indebtedness, and it
In Gates v. Kelley, 15 N. D. 639, 110 N. W. 770, one Cranmer, being the owner of .the land in controversy, had made a loan on same through thé plaintiff, and had given to the plaintiff a second or commission mortgage. The first mortgage misdescribed the land. The first mortgage was foreclosed; notice of foreclosure giving the same misdescription as found in the mortgage.' Such foreclosure was therefore void. A deed, however, was issued upon such foreclosure in ignorance of the defect, and the land was afterwards conveyed to the plaintiff. Some years thereafter, plaintiff, desiring to sell the land, learned of the defect in the foreclosure and decided to procure title by foreclosing his second mortgage. Plaintiff resided in Minneapolis and was referred to the defendant as a suitable person to act as his attorney in said foreclosure. He wrote to the defendant, sending him this second mortgage, a’s well as mortgage on a second tract, and told him to proceed at once. The defendant wrote back advising plaintiff that he could not act for him in regards to the Cranmer mortgage, as he was adversely interested. The court determined the following facts to be true: Defendant immediately on receipt of plaintiff’s letter inclosing mortgages, hunted up Cranmer and induced him to execute a deed of said
It will be seen that in the ‘first case above mentioned there existed the fact that it was while acting as agent that the wrongdoer acquired the information of which he made wrong use; but while that might be an additional reason for holding him an involuntary trustee, yet it was not essential to such holding, and was entirely eliminated by the North Dakota court in the determination of the case in that court. No matter whether any relation of trust or confidence exists between the parties against whom and in whose favor the trust is declared, no matter whether, they-are known to each other, no matter whether -the beneficiary
The' other two ground's for holding appellant as a trustee may well be considered together, for the reason that an agent hardly ever places himself so that he comes -within the third ground without also coming more or less within the second,
The -case of Ringo v. Binns, 10 Pet. 270, 9 L. Ed. 420, is often cited as a leading ca'se on the question of constructive trust. The facts in this case being, in substance, as follows: The defendant was employed to look up certain lands owned by his principals, and to make a division thereof among the parties interested therein. • It appears that this tract of land was claimed under a grant from the government, but in.looking up the said land the defendant ascertained that, owing to certain requisites not having been complied with, no' grant had -issued. The defendant took out warrants for 600 acres of land and made entries and surveys upon 600 acres of the land in question, and afterwards took grant to same from the government. Having refused to convey to the plaintiffs, his former employers, this action was brought to have a constructive trust -declared in the land. The court used the following language: “But how forcibly does the equity of the complainants prevail over any claim of Ringo, when the latter is viewed as their agent at the time he made his entry and surveys upon the land, which he had undertaken -to assist in dividing between them. It is said that an unregistered survey gave to them no equitable right in the land, and that, Ringo being only agent for the special purpose of dividing the land, he could rightfully enter and survey it for himself when he ascertained the defect in the title of the complainants. The proposition of a want of equitable right in ,the complainants is true as against the state, for the time within which the survey should have been returned and
The case of Trice v. Comstock, 121 Fed. 620, 57 C. C. A. 646, 61 L. R. A. 176, is directly in point. The plaintiffs were real estate dealers,’ whose plan of business was to obtain option on lands and then find purchasers for the same, and, after purchaser was found, procure the lands and make sale thereon. They employed defendant as their agent. Defendant resided in another state, and, under his contract of agency, was to bring purchasers for land. If sales were consummated, he was to- get a certain amount per acre besides having his expenses paid. Defendant brought prospective purchasers, and the land was shown by plaintiffs, although they had no -option thereon. Plaintiffs knew-, however, that it could be purchased at a certain price. No sale was then made. Some time afterwards the defendant announced that he would terminate his employment. After such employment was terminated, defendant went to the owners of this land, while plaintiffs were still trying to effect sale of the same, and purchased the land himself. This action was brought to have the defendant held as a trustee of the title to this land for plaintiffs, and the court so held. Among other things, the court in its opinion stated as follows: “The truth is that the principle of law which controls the determination -of this case is not limited
Mechem on Agency, § 468, declares: “If an agent discovei's a defect in his principal's title, he cannot use it to acquire a title for himself, and if he does so he will be held to be a trustee holdixig fx’om his principal.” As was well said by the justice in the case of Staats v. Bergen, 17 N. J. Eq. 554: “A tx-ustee may xrot put himself in a position in which to be hoxiest must be a 'strain on hixn.” In 1 Perry on Trusts (4th E.) § 206, the author lays down these propositions: “No^ person whose
But appellant contends that he did no wrong, and these rules of equity do not apply, because he “did not buy adversely Lu the mortgagee, but subject to the mortgage lien,” and also might claim that he should not be holden under these authorities for the reason that he did not know of the defective acknowledgment when he took his deed, and did not take such deed for purpose of taking advantage of such defect. Sufficient answer to both these contentions would be that equity, in controlling the duties and rights of an agent in transactions relating to property in which the principal is interested, acts not only to prevent an actual wrong intended or remove a wrong inflicted, but as often removes the chance for wrong by preventing the chance for temptation. It is true that appellant might have purchased this land, and perhaps did, with no intent to set up any rights against those claiming under the mortgage; but it is very apparent that there was a chance for him to be tempted, to hope .that the foreclosure would be defective — even to hope that something might develop to prove the mortgage itself void — and all must admit that, if he bought knowing of the defect in the acknowledgment, it would be such a fraud as to make him a trustee. If then it would have been wrong for him tO' acquire title, knowing of any defect m
As was well said by the court in Jansen v. Williams, 36 Neb. 869, 55 N. W. 279, 20 L. R. A. 207, in speaking of the rights and duties of an agent: “The moment he ceases to be the repre-. semtative of his employer, and places himself in a position towards his principal where his interests may come in conflict with those of his principal, no matter how fair his conduct may lie in the particular transaction, that moment he ceases to be that. which his services requires and his duty to his principal demands. He is no longer the agent, but an umpire. He ceases to be the champion of one of the contestants in the game of bargain, and sets -himself up as a judge to decide between- his principal and himself what is just and fair. The reason of the rule is apparent. Owing to the selfishness and greed of our nature, there must, in the great mass of the transactions of mankind, be a strong and almost ineradicable antagonism between the interests of the seller’and the buyer; and universal experience as shown that the average man will not, where his interests are brought in conflict with those of his employer, look upon his employer’s interests as more important and entitled to-more protection than his own. In such cases the courts do not stop to inquire whether the agent has obtained an advantage or not, or whether his conduct has been fraudulent or not. AVhen the fact is established that he has attempted to assume two distinct and opposite characters in the same transaction, in one of which he acted for himself, and in the other pretended to -act for another person, and to have secured for -each t-he same measure of advantage that would have been
The holders of .the mortgage interest, after the attempted foreclosure, conveyed all their interests in. these lands, by warranty deeds, to the respondents. The appellant then became the trustee of the respondents. It appears that, within a year from the time he took deed, he reimbursed -himself out of rentals for all he expended for the deed, and nothing remains due him. The trial court might well have decreed that the appellant convey the leual title to respondents; but, inasmuch as a .trustee of the naked legal title is estopped from disputing the .title of his cestui que trust, the -trial court was justified in merely quieting respondents’ apparent title under the foreclosure as against the appellant, as was done in this case.
The judgments of the lower court and orders defiying a new trial are affirmed.