164 N.W. 151 | N.D. | 1917
The complaint states a cause of action to foreclose a certain real estate mortgage covering section 31, in township 144, range 61, Traill county, North Dakota, given to secure $5,400, as evidenced by six certain promissory notes; five notes being for $1,000 each, and one note for $400. The notes and mortgage were signed by Frederick Siegert and Ida Siegert. They, however, make no defense to the foreclosure, the defense being by the Drexel State Bank of Chicago, they claiming that the notes and mortgage in question were assigned to them as collateral security. The complaint contains all the regular Allegations of an ordinary foreclosure by action.
The answer, among other things, alleges the indebtedness of Bichard O. Battel and the Northern Trading Company to the defendant in the sum of $8,500, represented by a promissory note which the defendant, the Drexel State Bank of Chicago, alleges was secured by the delivery to the defendant of the notes mentioned in the complaint and the assignment of the mortgage which secured said notes; and the answer alleges that such notes and mortgage were to be held as a pledge and security to the debt due from Battel and for the purpose of paying such debt. The defendant further alleges the possession of the said notes and mortg-'age since the time of the delivery to them, and claims to be the owner and holder of the notes and mortgage described in the complaint, and claims that plaintiff has no right or interest in said notes and mortgage until the debt of Bichard C. Battel to the defendant is paid and satisfied ; and that there is now due to the defendant from said Bichard C. Battel and the plaintiff a sum of over $11,000. Defendants add in the prayer that, if the said mortgage be foreclosed and the property sold, the proceeds be delivered to the defendant in payment and satisfaction •of the debt due and owing from Bichard C. Battel to the defendant.
The plaintiff in its reply states the following: The plaintiff admits that the defendant, Drexel State Bank of Chicago, secured possession •of the notes and real estate mortgage described in the plaintiff’s complaint herein, and several assignments of said mortgage, and has retained and still retains the possession thereof, and in this behalf alleges that the same were not by the plaintiff, nor any other person •or party, delivered to said defendant, but were taken clandestinely by the agent and representative of said defendant, without any authority from the plaintiff and without the plaintiff’s consent, and against its
The facts in the case are substantially as follows: The plaintiff is a corporation organized and existing by virtue of the laws of the state of North Dakota, its principal place of business being at Casselton, North Dakota. The Drexel State Bank of Chicago is a corporation organized and existing by virtue of the laws of the state of Illinois. On the 15th day of August, 1913, Frederick Siegert and Ida Siegert executed and delivered to Murray Bros. & Ward Land Company, a corporation, their promissory notes in writing for the sum of $5,400, being five notes for $1,000 each, and one note for $400, which were secured by a real estate mortgage upon all of section 31-144-51. Murray Bros. & Ward Land Company afterwards assigned such mortgage to the Minneapolis Trust Company, which assignment was filed February 5, 1914, in Traill county, North Dakota. On or about the 1st day of May, 1914, Minneapolis Trust Company reassigned such mortgage to Murray Bros. & Ward Land Company. About the 2d day of May, 1914, Murray Bros. & Ward Land Company assigned such mortgage to the plaintiff, the Northern Trading Company, and sold, assigned, indorsed, transferred, and delivered the notes in question to the Northern Trading Company, which notes were indorsed without recourse.
During the times mentioned herein Richard O. Kittel, of Casselton, North Dakota, was vice president, director, stockholder, and managing agent of the plaintiff, the Northern Trading Company, and the president, director, and managing agent of the First National Bank of Casselton, and William. F. Kittel was the treasurer, director, and stockholder of the plaintiff, the Northern Trading Company, and cashier, stockholder, and director of the First National Bank of Casselton, North Dakota. Between the 1st day of January, 1914, and the 20th day of January, 1916, M. B. Cottrell was the president and director of the defendant, the Drexel State Bank of Chicago, Illinois, and its duly authorized agent in the transaction of the business involving said defendant during said time. On or about the 9th day of July, 1914,
It appears that in the first part of July, 1914, Mr. Cottrell came to Casselton for the purpose of procuring the payment or security for the indebtedness of the Northern Trading Company to the Drexel State Bank of Chicago, and also the indebtedness of Richard C. Kittel to the same bank. That the first matter considered on such occasion, which was on the 9th day of July, 1914, was the indebtedness claimed to be due from the Northern Trading Company to the Drexel State Bank of Chicago, which it seems was satisfactorily secured by the assigmnent of the Northern Trading Company of a mortgage for $24,000, which was secured on eighteen sections of land, which debt it seems was fully paid or thereafter paid, and the collateral reassigned. At the same time Cottrell demanded further security for the debt of Richard C. Kittel. The Drexel State Bank turned back certain bank stock of the State Bank and received in lieu thereof 125 shares of stock of the First National Bank of Casselton of par value, which was duly assigned to the Drexel State Bank in writing. Thus far there is no dispute as to the questions of fact, and the main contention arises over the question of fact whether or not Richard C. Kittel did turn over the notes and mortgage in question with the intention that they should become security for his personal obligation to the Drexel State Bank of Chicago. Richard C. Kittel contends that he never turned such notes and mortgage over, and never authorized the possession thereof by the Drexel State Bank, but that the Drexel State Bank, through its agent Cottrell, clandestinely took such notes and mortgage from the desk in the office of Richard C. Kittel in the First National Bank at Casselton. In other word's, that said Cottrell clandestinely, secretly, and without any knowledge on the part of Richard C. Kittel, took all of such notes and the mortgage, which fact was not discovered by Kittel until some time thereafter.
The questions to be considered in the case are, therefore, narrowed down to whether or not Richard O. Kittel did place in the possession of the Drexel State Bank of Chicago, through their agent Cottrell,
Mr. Kittel admits that at the same time Cottrell adjusted the matter of the indebtedness of the Northern Trading Company with the Drexel State Bank as to security, he talked with him about making some .adjustment of the personal debt of Richard C. Kittel. Richard O. Kittel claims that the notes and mortgage in question were inspected by Cottrell as collateral offered on the Northern Trading Company claim, and that Cottrell rejected the notes and mortgage for such purpose, but that Cottrell did select other collateral, which was the Merlien mortgage for $24,000 secured as hereinbefore stated. Richard C. Kittel also testified that he secured his personal indebtedness by 125 shares of the stock of the First National Bank of Casselton. Kit-tel claims that he notified the Drexel State Bank of Chicago that they had no right to this paper, and says that he did that as soon as he knew they had the paper, which should have been about the time the note was sent to the First National Bank for collection. Kittel testifies that the notes in question were never indorsed either in lead pencil or any other way, and that he never had any intention of delivering them, not even as security for the Northern Trading Company. He gives as his excuse for not being more insistent on the return of such papers •or making no more complaint, that he owed money, and was in default, and was constantly in danger, as he expressed it, “of being shut down on, and 1 could not complain at that time.” He claims that his personal indebtedness to the bank at that time was $10,000, and is about $6,000 at the present time. As a part of the settlement as to his own personal debt, he also agreed to pay $500 a month on the indebtedness due from him personally to the Drexel State Bank of Chicago. Some of the monthly payments at least were made.
Mr. Cottrell, the agent of the Drexel State Bank of Chicago, testified substantially as follows:
As I remember it, we were in Mr. Kittel’s office in the First National
Q. Had you ever heard of this mortgage before ?
A. Not that I remember of.
Q. Never had it until he handed it to you ?
A. I don’t ever remember of seeing it.
Q. What did he say when he handed it to you?
A. Well, I cannot remember the conversation at the time, but it was handed to me the same as the other.
Q. At the time or immediately after your demand for additional security on his personal note?
A. Yes, sir; it was handed to me the same as the other stock. He went out and got it out of his safety deposit box and gave it to me.
Q. And at that time you received these plaintiff’s exhibits one to ten, did you know anything about the claims of the Northern Trading Company to that paper?
A. I did not.
Q. Was there anything said to you by Mr. Kittel other than what you have already related on the stand ?
A. Not that I can recollect at present.
Q. What did you do with these papers, plaintiff’s exhibits one to ten, after you left Casselton ?
A. I delivered them to the Drexel State Bank on my return to Chicago.
*530 Q. As far as you know, Mi*. Cottrell, who has held these papers since that time ?
A. They have been held by the Drexel State Bank.
Q. Has Mr. Kittel been in Chicago at different times since that time?
A. Tes, sir.
Q. Did he at any time prior to the 15th day of January, 1916, talk with you on the occasion of any of these visits as to the claims of the Northern Trading Company to that paper ?
A. He did not.
It will be seen, therefore, that there is a direct conflict between the testimony of Richard C. Kittel and Cottrell, the agent of the Drexel State Bank, concerning the delivery of the notes and mortgage in question to the Drexel State Bank as collateral security to the obligation of Richard C. Kittel. All the testimony in this case, including* that concerning the delivery of the notes and mortgage in question as collateral security for the individual debt of Richard O. Kittel, was submitted to the trial judge, who passed upon the questions of both law and fact in the case. Both Kittel and Cottrell were present in person and testified. The trial judge had the opportunity to observe the demeanor of the witnesses on the stand while under oath, he could note their candor or want of candor, the willingness with which they testified, and many other characteristics or qualities of the witnesses. This court has no such opportunity, and while the judgment of the trial court is not conclusive as against this court, nevertheless the judgment of the trial court is entitled to very careful consideration, and especially so where there is a direct conflict of testimony relating to the same subject-matter, for in such case the determination and judgment of the trial court may be of inestimable value in finally determining the merits of the controversy in a case such as the one at bar. Where there are just two witnesses testifying concerning the subject-matter of the action, and their testimony is in diametric conflict, by what rule of construction can this court say from the paper testimony which of such witnesses is really making the truthful statement. A case such as the one at bar has the character of a case in which weight should be given, if ever, to the judgment of the trial court. Adopting the findings of the trial court .in this case, the Drexel State Bank rightfully
As before stated the trial court in this case was in more advantageous position, and had better opportunity, to pass upon the credibility of the witnesses than we; and while we are not bound to do so, we are convinced that, in view of all the testimony in this case, its contradictory character, the limited number of witnesses, and all the facts and circumstances connected with the case, we must accord considerable weight to the judgment of the trial court in the case.
The judgment appealed from, therefore, is in all things affirmed, with costs.