113 F. 13 | U.S. Circuit Court for the District of Oregon | 1901
Lead Opinion
Certain property, including that in dispute, belonged to Geo. A. La Dow in his lifetime. La Dow died about May 1, 1873, intestate, leaving a widow and two children, Frank La Dow and the plaintiff, Lewis McArthur La Dow, then about 4 months of age. Thereafter, and on September 12, 1889, the widow, Mattie La Dow, as guardian of Lewis, who was then in his seventeenth )fear, petitioned the county court for an order authorizing the sale of certain property, including that in dispute. The' petition alleged the minority of Lewis, stating his .age to be 14 years or thereabout; and it alleged facts showing the necessity for such s,ale, which was authorized by' the county court. Thereafter, and on November 14, 1889, the property of said minor, consisting of the undivided half of lots 3 to 10, inclusive, in block 8 in the town of Pendleton, was sold to one Charles B. I-saacs for the sum of $15,-000, which sale was afterwards, and on January 8, 1890, confirmed by the county court. On the 11th of the same month the widow, as guardian, executed her deed for the property sold to Isaacs. Prior to this sale, and on September 27, 1889, Mattie A. La Dow (the widow and guardian), Frank La Dow, and Isaacs executed a mortgage to the Conklin Trust Company upon said lots 3 to 10, inclusive, in said block 8, for $17,350. This mortgage was dated September 1, 1889. On March 13, 1894, the same parties (Mattie A. La Dow, Frank Fa Dow, and Isaacs) conveyed the mortgaged property to one James A. Howard for the consideration stated in
“Well, that is a hard question to answer. In one way he did. In another way he did not.”
And when requested to explain, he says:
“Well, Judge, I would have to detail a trade here that would take a half a day to explain it. * * * We made so many settlements and trades hack and forth, that it would he hard to say whether he paid anything of value or not, and, if he did, how much.”
Howard finally admits, however, that he thinks he got $1,000. He received 50 or 60 suburban lots, which he mortgaged for $500 through Lombard, and whether he gave them all up for the mortgage, or got a small equity out of them, he cannot state. Howard further testifies that there was $660 in the bank in his name, which had been deposited under the contract with the mortgage company; that one-half of this sum was turned over to Lombard to pay interest on the Conklin mortgage and insurance on the La Dow Block.
I am convinced that the interests of the complainant were not advanced, but were prejudiced, by the mortgage-sale transaction, and that there are no equities in favor of Lombard or his grantor in the premises, and it is against equity that Lombard should be permitted to profit at the expense of complainant by reason of the illegal mortgage which the sale was intended to effect.
The complainant is entitled to the relief prayed for, and it is decreed accordingly.
Rehearing
On Rehearing.
(January 29, 1902.)
J. J. Balleray and Charles Carter, for plaintiff.
George Stout and Pipes & Tifft, for defendants.
The facts in this case are stated in the opinion heretofore rendered on the final hearing. The petition for rehearing argues the legal questions involved in the case, about which there is no controversy, at some length. As to the fact that Isaacs executed the mortgage to the minor’s property before the guardian’s sale at which he pretended to get title, and that Lombard assumed a part of the mortgage in the purchase of the
The petition for rehearing criticises the statement contained in the opinion heretofore rendered that the assumption by Lombard of the illegal mortgage was at complainant’s expense. That statement was made upon the theory that Howard intended to account to the complainant for the property held by him, and for which he (Howard) appears not to have paid anything at the time the Lombard deal was entered into. Upon this theory, Lombard's agreement to pay an illegal demand against complainant as a part of the consideration for the property taken — an agreement which he subsequently escaped through an adjudication that the debt was illegal — was at the expense of complainant’s interest. If those concerned in the transaction did not intend to restore the fee of this property to the owner, then it must be admitted that, so far as he was concerned, it made no difference whether Lombard paid anything for it or not. And yet the fact remains that this property was conveyed, not sold, in order to effect a mortgage upon it, which the law did not permit; and the party taking the title, with the understanding that he should reconvey it after the mortgage was exe
The petition for a rehearing is denied.