67 Minn. 62 | Minn. | 1896
Action to enjoin the foreclosure of a mortgage. Stated in chronological order, the history of the case is as follows: In January, 1883, one Lockwood, being the owner of a tract of land, executed two mortgages on it, one to Lawton and one to Kelley. In May, 1884, he executed a third mortgage to one Brown, receiver of the Northwestern Manufacturing & Car Company. This mortgage contained full covenants of title, save that the Lawton mortgage was excepted from the covenant against incumbrances. In February, 1886, Kelley foreclosed, and bid in the property, and afterwards paid off the Lawton mortgage. The property was never redeemed from this sale. In October, 1887, Brown, as receiver, sold his mortgage and the debt secured thereby to the Minnesota Thresher Mnfg. Company, but that company caused the assignment from Brown to be made directly to its “trustee,” the Massachusetts Loan & Trust Company. This assignment was not recorded until February, 1895. In September, 1888, Kelley conveyed the land back to Lockwood. In June, 1892, Lockwood conveyed to plaintiff. In June, 1892, one Leininger, acting for the owner of the Brown notes, made a settlement with Lockwood by which those notes were canceled and surrendered, and new notes for $750, payable to the Minnesota Th. Mnfg. Company, taken in place of them. In February, 1895, the Massachusetts Loan & Trust Company, as trustee for the Minnesota Th. Mnfg. Company, assigned to defendant the Brown mortgage, together with the new notes taken by Leininger, and defendant was proceeding to foreclose when plaintiff brought this action to enjoin him, on the ground, among others, that the mortgage had been fully paid and satisfied.
The court finds that Lockwood and Leininger “settled and adjusted” the indebtedness represented by the Brown notes, and that Lockwood then made and delivered his other notes “in compromise, settlement, and cancellation” of said indebtedness. Then, again, the court states:
“I regard the evidence and circumstances of the case sufficient to justify the conclusion that the settlement had between the Minnesota Thresher Manufacturing Company and Lockwood amounted to a cancellation and discharge of the Brown mortgage.”
While the court does not find, in so many wox’ds, that the new notes were given and accepted in payment of the debt secured by the mortgage, yet this, in effect, is what the finding amounts to; and the statement of the court, quoted above, whether considered as a formal ■ finding or not, clearly shows that the language of the previous finding was intended to have that meaning.
The finding, so construed, was justified by the evidence. The circumstances under which these notes were given and taken have a more important bearing upon the question of the intent of the parties than the mere form of words which they used, which neither party may remember accurately. At the time of the settlement the Brown notes amounted to about $2,100, two-thirds of which was barred by the statute of limitations. The mortgage securing the same had been considered for years as worthless, and as having been wiped
While it requires quite strong evidence to overcome the presumption that a promissory note was accepted only as conditional payment, especially where the result would be the release of collateral security, yet in our judgment these circumstances, with others that might be mentioned, taken in connection with the testimony of Lockwood, justified the court in finding that the parties intended this settlement to operate as a payment and extinguishment of the former debt, and that it was never expected or intended that the mortgage should stand ás security for the new notes.
Judgment affirmed.