20 Utah 267 | Utah | 1899
This is an action in which the plaintiff, who is the appellant, prays for a decree directing the sale of certain real estate described in a certain deed of trust, executed by the defendant, the South Ogden Land, Building & Improvement Company, on the 13th day of March, 1893, and conveying said real estate to F. W. La Frantz, trustee, as security for the reimbursement of any sum which the defendants Sidney Stevens, S. C. Stephens, W. J. Stephens, and Paul Beus, or either of them, might be obliged to pay on certain accommodation notes, described in said deed of trust, executed by said defendants, at the request of said defendant company, for the sole use and benefit of said company, and which said deed of trust, together with the claim of the said Sidney Stevens for the sum which, the complaint alleges, he was obliged to pay on said accommodation notes (his co-makers of said notes having paid nothing thereon) was assigned by the said Sidney Stevens to the plaintiff.
The said defendant, David H. Stephens, in his answer, after denying certain allegations of the complaint, and making certain allegations, which, in the decision of the
The cross complaint also alleged the same facts as those
The fourth finding is as follows: “That the defendant William F. Garner, named in said deed of trust, as one of the trustees thereof, was at the time of the commencement of this action, 'ever since has been, and still is, a non-resident of the State of Utah, and by reason thereof is unable to act and carry out the provisions of said trust.”
The said William F. Garner was named in the complaint as a party defendant to the suit, but was not served with summons and made no appearance. The said James A. Stephens was also named therein as a party defendant, and in connection with other defendants, answered the complaint. Neither of said trustees were made, in terms, parties to the cross complaint. No objection was made by the plaintiff and appellant, on the ground of a non-joinder of necessary parties, either by demurrer, or in the answer to the cross-complaint, or on motion for a new trial.
Notwithstanding the foregoing finding and the facts just stated, the appellant, for the first time, makes the objection, in this court, that the trust deed set out in the cross complaint cannot be foreclosed without the trustees named therein being parties to the action.
The leading case quoted by counsel for the appellant, in support of this objection is Hays v. Owen, 69 Ill. App. 553, which was an action to foreclose a trust deed. The trustee was not made a party to either the original, amended or supplemental bill, and the court on the authority of Lambert v. Hays, 22 Ill. App. 616, held that the omission was fatal.
In the latter case the court said: “ In a suit in chancery to foreclose a trust deed in the nature of a mortgage, the
In Gardner v. Brown, 21 Wall. 36, Mr. Chief Justice Waite in the opinion said, “the bill prayed a foreclosure of the mortgage by sale of the land. This required the presence of the party holding the legal title. The complainant has only the equitable title. Walker held the legal title. The final determination of the controversy, therefore, required his presence.”
In the case of S. W. M. Tucker v. Silver, 9 Iowa, 261, upon which much stress was laid by appellant’s counsel, because the case was considered in the light of the Iowa Code, the court says: “The trustee holds the legal title in the thing demanded, and he must be before the court, says Mr. Daniels, page 259, ‘ on account of the impossibility of otherwise preventing the assertion of the legal right in courts of law.’ And in all cases in which the legal estate is vested in the trustee, or if he has no estate, when the circumstances are such, that in the event of the success of the complainant, the defendant may have a demand over against him, the trustee is a necessary party. Daniels, 300. Has this rule been changed by the code ? The legal title, now as heretofore vests in the trustee. Let us look then at the provisions which appellant claims, changed the rule.” The court held that the rule was not changed.
In Sec. 307, Story’s Equity Pleading, referred to by appellant’s counsel, the reason of the rule is given in this language, “The trustees have the legal interest, and therefore they are necessary parties.”
All of the other numerous citations of appellant’s counsel are of like import, and like the authorities just quoted from, apply the rule only where the trustee is vested with the legal title, or possesses some beneficial interest in the trust.
This court, in a well considered opinion, by Mr. Justice Bartch, in Dupee v. Rose, 10 Utah, 305, held, that, “A trust deed, given to secure a debt, containing the provisions usually found in such instrument, among which is the usual power of sale to be exercised by the trustee in the event of default in payment, is in effect a mortgage, and the beneficiary may sue in equity to foreclose the same, as the power of sale is merely cumulative to such right.”
In support of this decision see Thompson v. Marshall, 27 Pac. 957 and numerous cases therein cited.
Sec. 3517 of the Revised Statutes, 1898, and Sec. 3474 Compiled Laws, 1888, (which are the same) provide: “A mortgage of real property shall not be deemed a conveyance, whatever its terms, so as to enable the owner of the mortgage to recover possession of the real property without a foreclosure and sale.”
This court held in Thompson v, Cheesman, 15 Utah, 51, that, under the provisions of said sections, a mortgage of real property does not vest its title in the mortgagee.
In the case of Peck v. Girard F. & M. Ins. Co., 16 Utah, 121, this court announced the same doctrine. In that case, one Christofferson, after having procured a
Under the same provisions in tbe California Code, as the sections of our code before quoted, the supreme court of that state in numerous cases have uniformly beld that a mortgage is a mere security and under it no estate in tbe mortgaged lands passes to tbe mortgagee, either before or after condition broken, but is regarded as a mere security, operating upon tbe property as a lien or encumbrance only. Jackson v. Lodge, 36 Cal. 39; Dutton v. Warschauer, 21 Cal. 609; McGurrin v. Garrity, 68 Cal. 566; Harp v. Calahan, 46 Cal. 222; Grattan v. Wiggins, 23 Cal. 16; Bludworth v. Lake, 33 Cal. 255; Stewart v. Powers, 98 Cal. 514.
In many of tbe other states tbe same rule prevails. Thompson v. Marshall, supra, and tbe numerous authorities tüerein referred to. Jones on Mortgages, Sec. 17 et seq.
The only duties imposed upon tbe trustees by tbe trust deed set out in the cross-complaint, are, that upon the happening of certain events therein mentioned, tbe trustees should, in tbe manner pointed out, proceed to sell tbe real estate mentioned in tbe deed and distribute tbe proceeds of tbe sale as therein directed. Notwithstanding tbe power of the trustees to sell said real estate in tbe manner prescribed, the defendant David H. Stephens, whose demand tbe trust deed was given to secure, bad the right to resort as be has done to the remedy of foreclosure. Dupee v. Rose, 10 Utah, 305.
In Case v. Preece, 17 How. Pr. 348, it is held that where the trustees have no legal or equitable estate they are unnecessary parties.
In the case at bar the trustees are not vested with any title, legal or equitable; they have no substantial interest whatever in the matter, and cannot be injuriously affected by any decree in the case; therefore they are not necessary or indispensable parties. '
In Shelby v. Burtis, supra, it is held that “the trustee is not deemed, in a suit by the creditor against the debtor to foreclose a deed of trust given by way of mortgage, an absolutely necessary party. But he is a proper party, and should be joined as such. * * * But if the creditor, instead of availing himself of his summary remedy of sale by the trustee, brings suit for foreclosure, the matter is taken out of the control of the trustee; his interest becomes nominal, and has no such force as would require the appellate court where it is for the first time presented, to set aside the proceedings of a protracted litigation, in order that he might be made a party, so as to be bound by the decree.”
Under a like section in the California Code the Supreme Court of that State have announced the same doctrine. Heinlen v. Heilbron, 71 Cal. 557; Pavish v. Bean, 48 Cal. 364.
As the trustees in the case at bar were not indispensable parties, the appellant waived all objections to the misjoin-der complained of by failing to make objection on that ground in the court below. This being so, the finding relating to the absence of the trustee William F. Garner from the state is not material, and it is therefore unnecessary to decide whether the fact of his absence, had he been a necessary or indispensible party, furnishes a valid excuse for the failure to serve him with summons, in the manner prescribed by the code of civil procedure.
The trial court also made the following findings, to wit: “ (7) The court further finds that at the time of the loaning, .to wit, May 3, 1893, by the cross-complainant, David H. Stephens, to the defendant, the South Ogden Land, Building & Improvement Company, of the sum of $4,344.85 in actual cash then and there loaned by him to it, and at the time of the execution and delivery of the note and trust deed mentioned in his cross-complaint on the same day, there was an outstanding note and trust deed of said company payable to James C. Armstrong, or order, which was then and there past due, and upon which trust deed the trustees therein mentioned were proceeding to foreclose the same by advertising the sale thereof in the Ogden Daily Standard, and the property of said company would have been sacrificed by such sale if the same
(9) That at the time and before the said money was so. advanced and loaned by the said cross-complainant, David H. Stephens, to the company, and before he had parted with his money, it was expressly represented to him by all the stockholders and directors of said company, including the said Sidney Stevens, that the lands belonging to said company, and which are fully set out in his aforesaid trust deed, were free and clear of all liens (except the lien given to secure the payment of the so-called Armstrong note) and that if he would loan the said company the said
No objection is made in plaintiff’s brief to the ?th and 8th finding, but they throw light upon the 9th finding which is objected to on the ground that the same is not sustained by the evidence. All of the testimony touching this finding, consists of oral statements of witnesses and was conflicting. In such instances the trial judge having the witnesses before him' can observe their deportment upon the stand, and is therefore in a better position to-judge of their credibility and the weight of the evidence, than are the judges of the appellate court. For this reason, although the supreme court “has power, under Sec. 9, Art. 8 of the Constitution to review facts in an equity case,” (McKay v. Farr, 15 Utah, 261) still, unless the evidence is clearly insufficient to sustain the findings, they will not be disturbed by the appellate court.
Such a practice in appellate courts, in chancery cases, is well established.
In the case at bar, although the evidence is conflicting, we are clearly of the opinion that it justifies said finding, and that the appellant is estopped from asserting any lien, under the trust deed described in his complaint, upon the real estate deeded to William F. Garner and James A.
It is evident that the said defendant, David H. Stephens, relied solely, upon said deed of trust to secure the payment of the $4,344.85 loaned by him and therefore the question, whether by subrogation he became possessed of the right which Armstrong had under the trust deed, of which he was the beneficiary, and which was made previous to the one set out in the complaint, and which question plaintiff discussed in its brief at length, is wholly irrelevant, and the record fails to show that the said Stephens makes any such claim.
The appellant further contends that the decree includes more land than is described in the cross-complaint of David H. Stephens.
The trial court further found that the defendant, South Ogden Land, Building & Improvement Co., executed the trust deed set out in the plaintiff’s complaint, and that the same together with the claim secured thereby, were in January, 1897, assigned to plaintiff; that the trust deed mentioned in the cross-complaint was also executed by said company to secure the said David H. Stephens’ said claim. The date of the trust deed, first referred to above, is March 15th, 1893, and the second one, May 3, 1893. As conclusions of law, the trial court found, “That the cross-complainant, David H. Stephens, is entitled to have the premises in his cross-complaint and in the findings herein mentioned, as being the property of the defendant, South Ogden Land, Building & Improvement Company, sold according to law and the practice of this court, and the proceeds of the said sale applied as follows, to wit:
“2. To have paid to him the sum of $7,972.79, together with interest thereon from the date hereof until paid, at the rate of 18 per cent per annum, upon the note mentioned in the first cause of action in his cross-complaint, and the further sum of $250, counsel fees for foreclosure, together with legal interest thereon from the date hereof until paid, and the costs of this action as the same may be taxed.
“3. And after the payment of the said sums, together with interest and costs, if there be any surplus of the proceeds of such sale remaining, then that the plaintiff be paid the sum of $4,622.95, together with legal interest on $523.25, from March 15, 1893; $634.42 from November 11, 1893; $551.25, from February 23, 1894; $526.66, from April 19, 1893; $656.40, from January 5, 1894; $554.40, from March 24, 1894; $569 from August of 1894; $571 from August 14, 1894; $35.97 from February 6, 1894. ”
The trust deed mentioned in plaintiff’s complaint embraced and described twelve separate tracts of real estate and the trust deed set out in the cross-complaint did not cover or describe any real estate except seven of those described in the trust deed mentioned in plaintiff’s complaint. By the decree it was adjudged and ordered, not only, that the real estate described in the cross-complaint be sold, but that all of the real estate described in both deeds of trust, or such part thereof as might be sufficient to satisfy the cross-complainant’s and plaintiff’s demands, with interest, attorney’s fees, etc., and that the proceeds of sale be distributed as set out in the conclusions of law, before quoted.
The cross-complainant did not pray for the sale of any real estate except that described in the deed of trust set out in the cross-complaint, or claim priority of lien upon any other real estate. Yet the decree awarded to him rights in certain tracts of land, which he did not have or claim in his cross-complaint, and subordinated thereto plaintiff’s lien on said tracts.
The conclusions of law and the decree so subordinating the plaintiff’s lien under the trust deed assigned, as aforesaid, to it, are not warranted by the record, or sustained by the evidence. The decree should therefore be amended, so as to require said tracts of land deeded to secure cross-complainant’s said demand to be sold separately, and to direct that so much of the proceeds of such sale as may be necessary to satisfy cross-complainant’s claim, after deducting, the costs of making the same, be paid to him. Also so as to require, in case there be not a surplus left of the proceeds of said sale, after paying the costs and the cross-complainant’s demand, to satisfy the plaintiff’s claim
The trust deeds named in plaintiff’s complaint, in terms, convey all the real estate therein described. “Together with all right, title and interest in and to all water rights, and rights to the use of water now appurtenant to and used in connection will all of said described lands. Together with all water rights, and rights to the use of water, which may have heretofore been used in connection with the afore described lands.”
The South Ogden Water Company was made a party defendant in plaintiff’s complaint, and in its answer thereto, it is alleged that said company is the owner in fee, free from any pretended lien of trust of all the water heretofore used upon said land, except certain portions conveyed to John Pincock.
The trial court also found as follows: “The court further finds that the defendant, South Ogden Water Company is and was at all times in the pleadings herein mentioned, the owner in fee simple, free and clear of any incumbrances or liens thereon, of all the waters and rights, to the use of water heretofore used upon the said premises,” and made a decree in accordance therewith.
This finding and decree is objected to by appellant, on the sole ground that there was no issue joined by the pleadings respecting water rights of any party to the action, and that said finding was not responsive to any issue in the ease.
The defendant, South Ogden Water Company, having been made a party defendant to plaintiff’s action, was obliged to plead in bar of plaintiff’s claim, its title to
The answer of the South Ogden Water Company, in effect, fully denied the plaintiff’s claim, under said trust deed, to any of the water to which the South Ogden Company alleged title, and therefore an issue was joined on that question by the pleadings, and at the trial evidence on that issue was adduced by both parties.
The answer of said defendant, by the assertion of its right to said water, was an explicit denial that the plaintiff had any lien thereon or any right to have the same sold with said real estate in his action of foreclosure, and therefore raised an issue regarding the title to said water. At the trial considerable testimony was introduced on behalf of both parties to this issue.
This objection of appellant is not tenable.
The trial court also found “ That no part of the moneys evidenced by said promissory note of cross-complainant has been paid, and that there is now due thereon the principal sum of $4,344.85., together with interest thereon from May 3, 1893, at the rate of 18 per cent, per annum, which principal and interest, at this date amounts to $7,-972.79.”
The decree directed that the last sum, with interest thereon at the rate of 18 per cent, per annum, from the date of the decree, be paid to the cross-complainant out of the proceeds of sale, after paying the costs and certain other sums mentioned. The allowance of interest on said sum is assigned as error.
It is claimed by appellant that that sum, after the de
In the note of the cross-complainant, secured by trust deed, it is stipulated that the principal shall draw interest at the rate of 18 per cent, per annum until paid, both before and after judgment.
Sec. 2119 Sess. Laws, 1890, the provisions of which are still in force (Sec. 1241, Rev. Stat. 1898), provides that, “ It shall be lawful to take eight per cent, interest per annum, when the amount of interest has not been specified or agreed upon. But parties may agree in writing for the payment of any rate of interest whatever, on money due or to become due on any contract. Any judgment rendered on such contract shall conform thereto, and shall bear the interest agreed upon by the parties, which shall be specified in the judgment.”
A judgment on any such contract will bear interest, if so specified therein, at the same rate as the contract.
In this case no personal judgment was rendered for the said sum of $7,972.79. The decree merely provided that that sum, with 18 per cent, interest thereon, from the date of the decree, should be paid to the defendant, David H. Stephens, out of the proceeds of the sale. It also provided as follows:
“That if the proceeds of such sale shall be insufficient to pay the amounts so found due as aforesaid, with interest, costs, attorney’s fees and expenses of sale as aforesaid, the said sheriff shall specify the amounts of such deficiency and balance due to either the cross-complainant or to the plaintiff in his return of sale, and on the coming in of said returns a judgment of this court shall be docketed for such balance against the defendant South Ogden Land, Building & Improvement Company.”
It is stated in Wiltsie on Mortgage Foreclosure, Sec.
The foregoing states the correct and usual practice. While a judgment for any deficiency would, by virtue of the statute relating to interest, bear the same rate as the note upon which it is based, if specified in the judgment, the amounts specified in the finding do not. The statute has no application except to personal judgments.
In the trust deed, securing cross-complainant’s promissory noté, it is stipulated that in case of a sale thereunder, out of the proceeds, after paying costs, attorney’s fees, etc., the amount of said promissory note remaining unpaid, and the interest thereon shall be paid. That portion of the decree which requires the payment of compound interest out of the proceeds of the sale, is violative of the express terms of said trust deed; and should be amended so as, only, to allow interest on the principal of cross-complainant’s note, at the rate of 18 per cent, per annum from its date, to be paid out of the proceeds of the sale.
The rate of interest specified in the accommodation notes, described in plaintiff’s complaint, and to secure the makers thereof the trust deed mentioned in the complaint was given, is six per cent, per annum from June 1st, 1892, until paid, both before and after judgment. The trial court found “ That the said Sidney Stevens, on March 15, 1893, was compelled to and did pay of the money men
Interest was not allowed in the decree on this aggregate sum, as was done therein on the amount found due to the cross-complainant, but was allowed on the respective sums so paid, at the legal rate, from the date of each payment.
The appellant assigns as error, the allowance, only, of the legal rate of interest on said sums, and claims that interest thereon at the rate of 2 per cent, per month should have been allowed.
It is not stipulated in the trust deed that the amount which the makers of said accommodation notes might be' required to pay, should draw any specified rate of interest.
In the absence of such stipulation the amount paid by said makers would only draw interest at the legal rate from the date of each payment. The decree in this particular is correct.
On the 3d day of September, 1898, plaintiff filed and served a petition praying for a modification of the findings and decree on the ground of certain “neglect, mistake and oversight” of plaintiff in said petition alleged, and on said day a notice of a motion for the modification of the find
The decree was made and entered on the 22d day of December, 1897. Said petition was not filed and said motion was not made until more than nine months after the decree was made and entered, and after several regular terms of the trial court had expired.
This court has frequently held that under section 3256, Comp. Laws, 1888, (which is the same as Sec. 3005, Rev. Stat.,) it has no jurisdiction to modify a judgment, in respect to matters of substance on an application made more than six months after the expiration of the term at which the judgment was rendered. Lees v. Freeman, 57 Pac. Rep. 413, 18 Utah 481 and cases in note.
The said petition having been filed more than six months after the expiration of the term at which the decree was made and entered, we have no authority to pass upon the questions thereby presented.
It is ordered that the case be remanded to the court below with directions to modify the decree, in the particulars pointed out in the opinion rendered, and in conformity therewith, and that the respondent pay the costs of the appeal.