74 Minn. 538 | Minn. | 1898
The Minnehaha Driving Park Association, a corporation, owned a leasehold estate for the term of 15 years from April 21, 1888, in 56 acres of - land near the city of Minneapolis. Th.e association was indebted on its promissory notes to each of 18 different persons, to the aggregate amount of $14,400. To secure the payment of these notes, the association, on January 2, 1891, conveyed this leasehold estate to the Minneapolis Trust Company, in trust, with power to sell the property, and apply the proceeds, or so much as might be necessary, to paying off these notes at maturity. The plaintiffs, holders of some of these notes, brought this action in behalf of themselves and all other holders of notes secured by this trust deed; and after stating the foregoing facts in their complaint, alleged that in January, 1892, the driving park association having become insolvent, and having defaulted in the payment of interest on the notes, the trust company commenced an action in the district court to foreclose the trust deed and procure a sale of the property to satisfy the indebtedness secured thereby, in which action a decree of foreclosure and sale was rendered, under which the property was sold by the sheriff to the trust company for the sum of $13,838, and a certificate of sale executed, which was accepted by it, and that it afterwards procured an order of court confirming the sale.
The complaint further alleged that the plaintiffs had demanded of the trust company that it should account to each of them for his due proportion of the proceeds of the sale of the property, but that it refused, and still refuses, to do so. The relief demanded was that the trust company account to the plaintiffs and the other note holders for their respective shares of the proceeds of the sale, and that each of them have judgment against it for his just proportion of the same.
It will be observed that the complaint does not allege that the trust company ever disposed of the property, or realized or received a cent from it in money; but the plaintiffs proceed upon the theory
The answer of the trust company was, in substance, that it never did foreclose the trust deed, or sell or bid in the property; that the facts were that all the note holders, in order to protect their own interests, themselves instituted the action to foreclose (using the name of the trust company), conducted the same, procured the decree of sale, sold the property, and had it bid in in the name of the trust company, but for their own use and benefit, and that no money was ever paid to or received by it on accounty of the sale.
Upon the trial, the plaintiffs introduced in' evidence the trust deed and the record of the proceedings in the foreclosure action, including the certificate of sale and the order confirming the sale, and rested. Thereupon the trust company introduced evidence tending to prove all the allegations of its answer, except that it appeared from such testimony that the trust company consented to the use of its name as plaintiff in the foreclosure action, and that the holders of one of the notes (Miller & McKinney) never took part in, nor consented to, the foreclosure instituted by the other note holders, but, on the contrary, objected to it. Another of the note holders (Hill) did not at the time join in or give his consent to the proceedings, but, what amounts to the same thing, he has since fully ratified them, and does so expressly in his answer in this case.
The plaintiffs offered no evidence to rebut the evidence introduced by the trust company, but they objected to its introduction, as being incompetent, on the ground that the records of the district court in the foreclosure action could not be impeached collaterally by parol evidence. Conceding that parol evidence would be inadmissible to impeach collaterally the recitals of the record in that case, to the effect that the trust company appeared by attorney, and instituted and prosecuted the action to judgment and execution thereof, yet such evidence was admissible for the purpose of showing that the beneficiaries under the trust deed themselves consented to all that was done and procured the same to be done for their own benefit. This would in no way impeach or contradict the record. This, was
Upon the undisputed evidence, this would be decisive of the case upon the merits against all the plaintiffs, unless it is Miller & McKinney, who never gave their consent to what was done in the foreclosure action. But we are relieved from the necessity of considering their rights by the admission of plaintiffs’ counsel, on the argument of the case, that, irrespective of any consent or request on part of the cestuis que trustent, the trust company had the right to bid in the property in its own name for their benefit, if necessary to prevent a sacrifice of the property at the sale. Assuming such to be the law, it necessarily follows that the rule of accountability of the trust company to Miller & McKinney would be the same as to the other cestuis que trustent, viz., to account, not in money for the amount bid, but for the specific property bid in, or, in case of a wrongful disposition of it, for its value or proceeds, at their election.
There is neither allegation nor proof that the trust company was guilty of any fraud, negligence or failure to exercise ordinary business prudence in bidding in the property. The plaintiffs offered to prove that, after the trust company had bid in the property, it conveyed it by quitclaim to the Minneapolis Driving Club, an association, as we infer, of the large majority, but not all, of the cestuis que trustent under the trust deed. The defendants objected to this
Clearly, the plaintiffs were not prejudiced by its rejection for that purpose, for it already appeared that the trust company had authorized the institution and prosecution of the action in its name. And, if it was admissible under the pleadings for the purpose of showing a conversion, of the property, the plaintiffs cannot complain of its rejection, for they never offered it for any such purpose, but, on the contrary, expressly limited the offer to another purpose. If there was any abstract error in the ruling, it was the plaintiffs themselves who misled the court. The whole theory on which the case was tried throughout, as well as the express statement as to the purpose of the offer, would naturally and necessarily exclude from the mind of the court the idea that the evidence was either admissible or offered for the purpose of proving a conversion of the property by the trustee.
Judgment affirmed.