26 N.W.2d 182 | Neb. | 1947
This is a proceeding to set aside a decree in a real-estate mortgage foreclosure on the grounds that the mortgage foreclosed was invalid from its inception and that the decree was procured by fraud. The trial court set aside the decree, held the note and mortgage to be null, void, and unenforcible, and dismissed the petition praying for the foreclosure of the mortgage. The plaintiff appeals.
The record in this case shows that on March 11, 1924, Shirley D. Lewis contracted to sell the property in question to Arluster R. Harris and Libbie F. Harris, his wife, for a consideration of $4,000, subject to a mortgage to the Nebraska Savings & Loan Association for $2,000. The plaintiff, C. C. Watters, subsequently became the owner of the title. The payments due under the contract of sale became delinquent in 1934 and the defendants Harris applied to the Home Owners’ Loan Corporation for a loan. This application resulted in Watters deeding the property to the defendants, a mortgage to the Home Owners’ Loan Corporation in the amount of $1,685, a consent by the Nebraska Savings & Loan Association to take bonds in the amount of $688.77, and a consent by Watters to take bonds in the amount of $719.50 as full settlement. The foregoing transaction appears to have been fully completed on August 10, 1934. On the same day the defendants executed a second mortgage to Watters in the amount of $427.
The record shows that defendants failed to make the payments due on the second mortgage, and on March 22, 1935,
When the first mortgage was paid in full, defendants asserted that the decree of foreclosure was obtained by fraud in that plaintiff’s husband had agreed with Arluster Harris after the service of summons to dismiss the foreclosure upon the payment of three dollars to cover the cost of the serving of the summons, that three dollars were paid and that defendants did not discover that the suit had not been dismissed until November 1944. It was also alleged that the note and mortgage in question were obtained by fraud in that plaintiff, after accepting $719.50 in bonds of the Home Owners’ Loan Corporation in full settlement of the debt due, procured the mortgage in question by concealing from defendants the fact that the indebtedness represented
There was introduced into the record certain regulations of the Home Owners’ Loan Corporation which were promulgated by its board of directors. Nothing therein contained prohibits the taking of a second mortgage by a creditor who has not been fully paid. The regulations do provide that the loan will not be consummated if the amount of his mortgage and the amount of the first mortgage taken by the Home Owners’ Loan Corporation exceed the appraised value of the real estate as made by the Home Owners’ Loan Corporation, and if the payments of principal on the second mortgage are adjusted in such a way as not to impair the ability of the owner to make the payments due on the first mortgage. It is true, as alleged, that plaintiff did agree in writing with the Home Owners’ Loan Corporation to accept $719.50 in bonds as full settlement of plaintiff’s claim against the property.
With reference to the first proposition raised, it will be noted that Arluster Harris contends that shortly after the summons was served on him in the foreclosure action he took the summons to the office of plaintiff’s husband to inquire about the suit. He says that Watters informed him that if he would pay the cost of serving the summons he would forget about the foreclosure suit. Defendant testifies that he paid three dollars for this purpose, which Watters denies. In any event, defendants thereafter were repeatedly notified by Watters as to the various steps being taken in the litigation. For ten years after the taking of the decree, with full knowledge of the suit and the steps taken in the litigation, the defendants ignored the summons issued and the notices of judicial proceedings being taken. Such lethargy and indifference to one’s rights cannot afford a basis to vacate the decree because of fraud. In the first place, there was no fraud practiced because defendants were informed of each contemplated step in the litigation, and even if fraud did exist in the taking of the decree, we
The defendants contend that the second mortgage was obtained by fraud by concealing from defendants that the indebtedness represented as the consideration therefor had been fully paid and discharged. The evidence shows that the Home Owners’ Loan Corporation appraised the property in question at $2,112; $427 more than the first mortgage, which is the exact amount of the second mortgage In suit. In other words, there was strict compliance with the regulations of the Home Owners’ Loan Corporation that a loan would not be consummated where a second mortgage is taken in excess of the difference between the corporation’s loan and the corporation’s appraisal of the property. A representative of the Home Owners’ Loan Corporation testified that no written consent of the corporation permitting plaintiff to take a second mortgage ap
It is the contention of the defendants that the acceptance of the bonds of the Home Owners’ Loan Corporation by plaintiff, as a full satisfaction of her claim, discharged the duty of these defendants in accordance with the terms on which the Home Owners’ Loan Corporation offered it. We think this statement is in line with the holdings of this court. See Fender v. McCain, 144 Neb. 58, 12 N. W. 2d 541; Gordon v. Young, 146 Neb. 578, 20 N. W. 2d 616. Consequently, no valid consideration existed for the giving of the second mortgage of $427. Fender v. McCain, supra.
But this defense is no longer available to the defendants. They had actual notice of the commencement of the foreclosure suit and of the steps taken in that action. They had' full opportunity to assert this defense, but they elected to do-nothing. A defendant may not ignore judicial proceedings, commenced against him of which he has notice, and assert, any defense thereto which was then available to him whenever it suits his convenience. No statutory ground exists for vacating the decree of foreclosure after the term-, at which it was made. See § 25-2001, R. S. 1943. The-power of a court of equity to vacate a decree after the term at which it was entered, existing independent of statute,, will be exercised only when circumstances calling for
We conclude that grounds do not exist which would warrant a court of equity to vacate the decree of foreclosure in the instant case. The judgment of the district court is reversed and the cause remanded with directions to dismiss defendants’ petition to vacate the decree, and to proceed in the foreclosure action, as required by law.
Reversed and Remanded.