Court Opinion

ID: 6692184
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:39:07.375542+00
Date Added: 2024-06-11T16:01:05.768258
License: Public Domain

CAMPBEEE, J.
(concurring specially). I think the clear preponderance of the evidence shows beyond any possible question that when Polchow took the warranty deed from Rose and wife on 'March 15, 1922, he took it in payment and satisfaction of his mortgagee and the mortgage notes’, which he then surrendered to the Roses, and with. the full intent and understanding that his mortgage should be thereby paid and completely wiped out, and as a substitute for foreclosure. I-Iis attorney advised him- that this was not a safe procedure if there, were other mortgages or liens, but he determined to do it nevertheless, taking the word of Rose that there were no other liens. As to whether Polchow at this time knew of the bank’s mortgage, the evidence is in -direct conflict, and Polchow’s testimony is certainly far from satisfactory. However, the court saw and heard all the witnesses, and has found in favor of P'olchow on this point to the effect that he did not know of the existence of the -bank’s mortgage at the time he took his deed, and that he relied on the statement of Rose that there were no other mortgages. Under all the circumstances; I do not believe this court should hold that the clear preponderance of the evidence is against this finding.
While the evidence seems to- me to show beyond question that Polchow, when he took the deed, intended that his mortgage should *235■be paid thereby and utterly ended and merged, yet, accepting the finding of the court that he so acted in ignorance of the existence of the bank’s mortgage, it is entirely reasonable to say that he would not have so acted if he had known of the bank’s mortgage; and that, I think, is as much as the findings of the trial court really amount to. In other words, accepting the finding of the court on conflicting facts, the situation is that Polchow took a deed fully expecting and intending that such deed would operate to pay his mortgage and merge his mortgage interest in the fee; but he would not have so conducted himself if he had known at that time of the existence of the bank’s mortgage. That is, his intent would have been different from what it in fact was had he been possessed of all the relevant facts at the time he acted and formed his intent.
W'hen he did learn the facts he moved promptly to rescind the transaction as between himself and 'Rose, but nevertheless left his deed of record, gave no notice to the bank, and took no steps whatever toward enforcing his mortgage for nearly two years. His dilatory conduct in this regard is certainly in marked contrast to the extremely prompt action of the plaintiff in Bennett v. Campbell, 48 S. D. 285, 204 N. W. 177.
However, when the Tulare bank took its mortgage it was.a third mortgage, as the bank w.ell knew. Under all the circumstances of this case, conceding the fact, which seems entirely apparent to me, that Polchow when he took the deed fully intended payment and merger, nevertheless, if we accept the finding of the court that he would not have conducted himself as he did, and would not have intended payment and merger, except for his ignorance of the existence of the bank’s mortgage, then I do not think that equity ought gratuitously to improve the bank’s situation by advancing the bank from third to second mortgagee as against Polchow, unless it appears that the bank has suffered prejudice by reason of Polchow’s conduct. On this'point the trial court fornidas follows:
“That the defendant State Bank of Tulare was in no way prejudiced by the apparent vesting of the title to said real estate in plaintiff by reason of said AVarranty Deed, except that said defendant did1 make two payments of interest upon the said first mortgage of $8,000 held by the Federal Hand Bank of Omaha, to wit, payment of $267.50 on the 23d day of April, 1923; payment *236of $268 on the 29th day of September, 1923; that said defendant is entitled to a refund of said payments with 7 per cent interest thereon from- the date of such payments to the 10th day of September, 1924.”
The judgment in this case is conditional upon the repayment of those sums by Polchow to the bank, and he has tendered1 the necessary amount into court for that purpose. Under those circumstances and pursuant to the doctrine laid down in Bennett v. Campbell, supra, I think the judgment appealed from’ should be affirmed in spite of the fact that when Polchow took his deed he intended it to operate as payment of his mortgage and fully intended and expected. that the taking and1 recording of the deed utterly and completely ended his mortgage interest in the land, and in spite of the fact that he left his deed on record and delayed for nearly two years in asserting his mortgage rights after he discovered the true facts.
On the foregoing considerations I concur in the result reached by the majority opinion in this case, though I do not think the case can turn on the point that merger was not intended. It very plainly was.