Court Opinion

ID: 8812377
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:06:51.764561+00
Date Added: 2024-06-11T17:04:20.299027
License: Public Domain

CAREAND, Circuit Judge
(dissenting). A consideration of the evidence in this case has satisfied me that the patent for M. S. 1894 should he canceled as against the Investment Company for fraud. The defendant Steiskal, who was the trustee for the bondholders under the mortgage executed by the Investment Company, now holds the title to the land in controversy as trustee. This appears, not only from the evidence, but by the terms of the deed on foreclosure. The complaint of the plaintiff being on file when the foreclosure proceedings were had, no additional rights accrued to the bondholders than those they possessed under the mortgage. The trustee as such cannot be an innocent purchaser of the land.
It appears in a general way that about $75,000 in bonds were issued by tbe Investment Company under the mortgage, but it does not appear *880by whom they are held, or-the circumstances under which they were acquired. There is no allegation in the complaint that there are any innocent bondholders; the allegation in this behalf -being confined to the trustee. We cannot, for want of allegation and proof, determine whether there are any innocent bondholders. The decree below should b.e reversed, and a decree entered canceling the patent to M. S. 1894 as against the Investment Company, but preserving the title of Steiskal as trustee in behalf of those bondholders who shall come in and by proper pleading and proof show themselves to be innocent bondholders for value under the mortgage. If no such bondholders shall come in, then the title of Steiskal as trustee 'shall be also canceled. If innocent bondholders do come in, sufficient land should be sold to satisfy their claims; all matters necessary to carry out our judgment being left to the trial court.