Court Opinion

ID: 9559309
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:26:24.353824+00
Date Added: 2024-06-11T09:10:33.473376
License: Public Domain

THATCHER, District Judge
(dissenting)-
I concur in that part of-the majority opinion which reads; “The trial court did not err in refusing to quiet title in appellants against the lien of respondent’s mortgage”.
I dissent from the conclusion reached in this case that “That part of the decree quieting title to an undivided one-half interest in the lands in question in respondent and requiring appellants to pay all the taxes thereon is reversed”.
In the instant case the appellants stand in privity with the mortgagor, Barrett. Having taken title to the property with full knowledge of the mortgage and of the fact that it was unpaid, and with full knowledge of the oral agreement between Barrett and respondent they stand in . no *241better position than would Barrett himself. While the mortgagor did not initiate negotiations for the oral agreement, nevertheless he accepted the payment of $200 from respondent under that contract and assented to the proposition then made by respondent that the latter should have a one-half interest in the property in the consideration of the $200 and the cancellation of the $700 note. The record is silent as to any repudiation of this agreement 'by the mortgagor prior to the running of the Statute of Limitations against the mortgage indebtedness.
It is clear from the foregoing that the mortgagee changed his position in reliance upon the oral contract, and that relying thereon he permitted the Statute of Limitations to run against the enforcement of the mortgage. This would seem to 'bring this case squarely within the general rules of equity pertaining to estoppel to rely upon the Statute of Frauds.
The general rule as to estoppel to assert the Statute of Frauds is set forth in 49 Am.Jur., Section 581, page 888, and subsequent sections to and including that on page 893. A discussion of the subject is found in a note in 75 A.L.R. commencing at page 650. The cases cited by the author of the note referred to in general appear to support the general statement of the rule found in 49 Am.Jur. I deem it unnecessary to quote from the authorities cited except to quote from the case of Knauf & T. Co. v. Elkhart Lake Sand & Gravel Co., 153 Wis. 306, 141 N.W. 701, 704, 48 L.R.A.,N.S., 744, referred to in 75 A.L.R. at 653:
“The statute of frauds was not designed to enable the evil disposed to possess an instrumentality with which to perpetrate fraud. It is the weapon of the written law to prevent fraud while the doctrine of estoppel is that of the unwritten law to prevent like evil. Each is effective in its appropriate field. Both are essential to prevent and redress wrongs.”
The general rule pertaining to this subject being clearly established there only remains to determine whether the facts of this case make such rule applicable thereto. The trial court found that the oral contract, as alleged by respondent, was made; that the respondent acted upon that oral contract by paying over the sum of' $200 and by changing his position with respect to the enforcement of the mortgage in reliance upon the oral contract. What element of the general rule, then, is lacking in this case? Certainly to permit the appellants successfully to interpose the Statute of Frauds will result in the loss to> the respondent, not only of any benefit that may have accrued to him by reason of the oral contract, but also the loss of money invested upon the strength thereof and his entire mortgage debt.
There is another reason why the respondent should be granted affirmative relief in this action. The question of estoppel, in addition to being applicable to cases arising *242under the Statute of Frauds, is also applicable to cases wherein the Statute of Limitations is interposed as a defense. This question is thoroughly discussed in 34 Am.Jur. commencing at page 323, Section 411, and also in an annotation found in 130 A.L.R., commencing at page 8. The case of Barnett v. Nichols, 56 Miss. 622, while not being squarely in point with the case at bar is in many respects similar thereto. The court said in that case:
“But defendant, having induced complainant to accept his proposition in satisfaction of the debt, and thereby to forbear to take steps to collect it, will not be now allowed to plead the statute of limitations against that debt. Having agreed to make payment in a particular manner, and having practically acted upon this agreement, he cannot repudiate it without a restoration of the status quo. While complainant, (by his own folly, fails to get the legal title to which, in justice he is entitled, defendant will not be permitted to add to the bad faith charged against him, by setting up the statute of limitations against the debts which he has induced complainant to believe were paid off.”
This case seems to be in harmony with the weight of authorities on this subject. The fact that the respondent “by his own folly” failed to get the legal title to which he was entitled would be no reason for permitting' the mortgagor, or those in privity with him, to repudiate the oral agreement.
Although the respondent in his answer alleged that he was the owner of a valid unpaid mortgage upon the lands involved in this action and also that he was the owner of the lands, it does not appear that he sought relief by way of foreclosure of such mortgage. Hence, the defense of the Statute of Limitations was not directly raised by respondent and such defense was not passed upon by the trial court. However that may be, counsel in their briefs assumed that foreclosure of the mortgage was barred by the statute and that respondent would be entitled to no affirmative relief in that respect. The effect of this assumption upon the conclusions reached was the same as though the defense had been raised and upheld.
We are thus confronted with a situation where the appellants, seeking to quiet title against an unpaid mortgage and against the so-called redemption deed, held by the mortgagee are permitted successfully to interpose the defense not only of the Statute of Frauds but also of the Statute of Limitations. The result is that the mortgagee loses his mortgage debt, his $200 paid at the time the oral contract was made and the appellants, while not having their title quieted as to the mortgage, do have a judicial determination that the mortgage is unenforceable, which in practical effect amounts to the same thing.
*243A court of equity once having obtained jurisdiction may retain the case for all purposes of doing justice between the parties. Many decisions of this court have upheld this general statement.
It is my conclusion that the appellants are estopped from asserting the bar of the Statute of Frauds against the enforcement of the oral contract and that the decree of the trial court should be affirmed. It is further my conclusion that the appellants are estopped by reason of the oral agreement from invoking the bar of the Statute of Limitations against the enforcement of the mortgage, and that if the decree of the trial court is not to be affirmed with respect to the enforcement of the oral contract, the case should be remanded to the trial court with instructions to permit the respondent to amend his pleadings to conform to the proof and to permit him to seek the affirmative relief of foreclosure of the mortgage.