Court Opinion

ID: 6736327
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:18:43.51114+00
Date Added: 2024-06-11T16:01:47.532887
License: Public Domain

Ellsworth, J.
(Dissenting.) I am unable to concur in the opinion of my associates either upon the holding striking out the state-' ment of the case or in affirming the judgment. I believe that upon the showing made in the district court the cause shown was amply sufficient, so far as appellant was concerned, for extending the time for preparing and settling the statement of the case. But, assuming that the cause shown for an extension of time was. insufficient, I still believe that the conclusions of law of the district court are not supported by its findings of fact, and that the judgment, not being properly supported, should be reversed.
From the affidavit served upon respondent’s counsel, it appears that appellant’s attorneys had on September 19, 1908, received in-r structions to appeal from the judgment of the district court, that pursuant to such instructions they had applied to.the clerk of the district court for the original files of the action and the depositions taken, which, it seems, included the entire testimony of the case, and were informed by the clerk that all of these papers were in the hands of the judge of the district court, acid that for that reason he could not supply them to appellant’s attorneys.
This affidavit is corroborated by that of the clerk of the district court, who states that he has been applied t.o- by defendant’s attorney “several times for- the files of the above-entitled cause, including the depositions, testimony, and exhibits, but that he was unable to give them to him for the reason that they 'had not been' returned by the court since rendering judgment in the- case.” These affidavits were made the basis of an application to the judge of the district court -for an order extending- the time in. which to prepare and serve a statement of the casé. This application was made without notice to respondents’ counsel; but, while this practice of ex parte applications in matters of this character is not to be commended, it seems to be in vogue in some districts of the state, and *728furnishes no reason for impugning the order made provided it is in other respects legal and sufficient.- ,
The judge of the district court-with affidavits before him stating that he had in his hands all original files and papers in the case, and that appellant’s attorneys could not by reason of this fact have access to this record, made an order extending the time within which a statement of the case might be prepared and served to March 1, 1909. The order as originally prepared by appellant’s counsel contained in typewriting the date to which the time was extended as November 1, 1908-; but the judge has stricken -out this date and inserted instead a date providing for an enlargement of time much greater apparently than that contemplated by appellant’s attorneys. On October 1st this order was served on counsel for -respondent, who at once wrote counsel for appellant acknowledging receipt of a copy of the order, stating: “We think this order is absolutely void. We certainly have never known or heard of a statuté or any practice authorizing the making of such an -order.” Notwithstanding their belief in- this particular, however, and the fact that respondent’s counsel must have known of the statute permitting, upon good cause shown in the furtherance of justice,' an extension of time for the purpose of performing any of the' acts required by Section 7065, including preparation and service of a statement of' the case, respondents’ counsel took no action whatever to secure a vacation of the order -or to bring to the attention of the trial'court a showing that the facts alleged by appellant as a ground for such order were insufficient or untrue.
My associates -hold that the order extending the time for settling a statement of the case is void for 'the reason- that no sufficient reason for extending the time was shown, and give as their only reason for this holding that “the papers and files in said action were in the possession of the district judge, and it is to be presumed that appellant’s attorneys could have procured the papers and files at- the same time that they procured the order extending the time for settlement of the case to March 1, 1909.” In my opinion a presumption exactly the -contrary of this should guide the action of -this court in reviewing the -order of the judge of the district 'court. He was then acting clearly within his- -jurisdiction, and all presumptions of law and fact are in favor -of the -correctness of the -order. - It is a matter in which a district -judge has k wide discretion, and the order will not be dis*729turbed except in'case of an'obvious' abuse of' discretion. Tuttle v. Pollock, 123 N. W. 399. When the judge of' the' district court made the order extending the time, his action in this behalf corroborated the statements óf appellant’s counsel arid the clerk'of the district court to the effect that all original files and documents in the action, including depositions and exhibits, were in the hands of the judge of the district court, or, in any event, beyond the reach of appellent’s counsel, and that they presumptively would' be so until about the time expressed in the order, which as before shown was considerably enlarged by the district'judge at the time he signed'the order. In other words, as I view it, by such action, the judge of the district court admitted that he -had the entire record of the case in his possession, and was knowingly withholding it from the 'files of the district court for Eddy county, and that he intended continue to so withhold it until about the close of the period to which' the time for settling the statement of the case was extended.
It is clearly reasonable that appellant’s counsel could not be expected'to prepare a statement of the case until they had in hand the original files in the case, and that if these files were knowingly withheld by the judge of the district court, or had been lost or mislaid by him so they could not be produced, such fact furnished a sufficient reason for asking an extension of time. If this allegation was untrue, it is inconceivable that the judge of the district court with an affidavit before him making such assertion would have extended the time. If the' respondent’s counsel had reason to believe that the fact alleged was untrue, they had abundant Opportunity between October 1, 1908, and March 1, 1909, to bring the facts that had come to their knowledge to the attention of the district court and ask that the order be vacated. Then,'if it appeared that the order was made through improvidence or inadvertanee of the district judge or that the state of fact alleged in thé affidavits presented by appellant’s attorneys did not exist, it will be presumed that it would at once have been vacated.
Taking the affidavit submitted by the appellant’s counsel, therefore, together with the presumptions that attend the action of the district
judge, in my opinion no reasonable question can be raised of the suffiicency of the ground for granting an extension of time. The district judge afterward settled a statement of the case over the direct objection of appellant’s counsel that the order' extending the *730time was void, as being based on an insufficient showing of cause.. This gives added confirmation to the assertion, of plaintiff’s counsel that, until a short time before the statement of the case was actually prepared and served, the documents without which it was impossible to prepare such statement were inaccessible to them. In my opinion the practice of allowing an order which counsel believed to be void to remain in force during all times that.the district court had jurisdiction of the case, and then undertaking for the first time to make direct objection thereto in this court, is not a good one, nor should it be encouraged. If respondent’s counsel had not known of the order-extending the time for preparing a stated case 'until after the appeal was taken and the record transmitted to- this court, there might -have been some reason for his making the motiqn to strike out the statement of the case. Knowing or believing as he did for a period of almost five months before the proposed statement was served that the order extending the time was void, he should have made his objection to the district court.
¡My associates in their opinion after holding that the statement of the case m-ust be stricken out deem the judgment roll worthy of but scant consideration, and dispose of it with the statement that “the findings of fact a.s made by the district court are all in plaintiff’s favor, and such findings fully sustain the allegations of the com- , plaint. We shall not set out the findings in this opinion as no good purpose could be served by so doing.”. While it was unquestionably the purpose, of the district court to make its finding and enter its decree in favor of the plaintiff, in my opinion such findings as may legitimately be considered findings of fact signally fail either to support the conclusions of law or to sustain the decree.
After putting aside from- our consideration all evidence relied upon by the. appellant as was done by a majority of the court in this case, the judgment roll should be scanned with more searching scrutiny than in a case where the evidence is present and may be considered for the purpose of impeaching the findings. Such examination discloses that the action is not one to redeem from a mortgage foreclosure or from another mortgage held by appellant on which foreclosure has not been made; but is in fact an action to set aside a foreclosure and to have the mortgage foreclosed and- another upon the same land belonging to appellant offset against the value of certain grain taken from the premises by appellant after the expiration of the year of redemption.
*731As shown by the findings of fact, the mortgage of which foreclosure was made was given on November 10, 1897, to secure payment of a debt of $125 with interest at 12 per cent., due on November 10, 1900, this mortgage was first assigned to one S.' A. Flanders, and was on March 4, 1898, again assigned to appellant Norton. Appellant’s assignment was recorded on June 6, 1906, and on the same day he commenced proceedings to foreclose the mortgage by advertisement. On July 20, 1906, pursuant to notice duly published, the land was offered for sale by the sheriff of Eddy county and sold to appellant Norton for the sum claimed to be due on the mortgage of which he was the assignee, being $268 and the costs of the sale, $48.72, in all amounting to $306.75. A certificate of sale was made to appellant Norton by the sheriff of Eddy county, reqiting, among other things, that he was the highest and best bidder at said sale; that the sale was made to him for the amount due on the mortgage and the costs of the sale, amounting in all to $306.75; and that the land was subject to redemption within one year on payment of the purchase price with interest as provided by law. No redemption from this foreclosure sale was made, and on August 7, 1907, the sheriff of Eddy county made to appellant Norton a deed based on the foreclosure of said mortgage, purporting to convey the land to him. About SeptemT ber 1, 1907, appellant Norton, claiming title under the sheriff’s deed, went upon the land and took therefrom and sold grain produced and threshed from the crop of 1907 amounting in value after the necessary expenses of marketing were deducted to $386.25. It is almost needless to say that this recital of fact shows a valid foreclosure of mortgage and an unquestionable conveyance of the land to appellant. This being true, appellant had the undoubted right to take and receive not only after the year of redemption, but during that year as well from the tenant in possession of the lands the rents of the property or the value of the use and occupation, subject only to a liability to account for the -same in case of redemption. When no redemption was made, this value of the use and occupation of the property during the year of redemption became appellant’s absolutely. Rev. Codes 1905, 7148.
The findings of fact further recite that at the time of the foreclosure of the mortgage in question there was due thereon $125 with interest at 12 per cent, per annum for six years,, eight months, *732and ten days, which then amounted to $225.40, and that the sale was made for $32.58 in excess óf the amount' due; that the certificate of sale made by the sheriff to appellant Norton recited as a fact that at the time of sale there was due ón'sáid mortgage in principal and interest $258, when, in fact, there was due only $225.42. Then 'follow findings entered with an evident purpose of sustaining a conclusion that appellant in the purchase of said premises at the sale made by him as assignee of the mortgagee did not act in good faith, but unfairly and fraudulently to such an extent as to invalidate the foreclosure. These findings are that at the time of the sale the land was reasonably worth the sum of "$4,000, and that this fact was known to the appellant, who had for many j^bars resided at a distance of about 14 miles from the land; that in 1900 the title to the land was obtained by one C. C. Hewitt; of the United States Army, who died seised and possessed of the .s'aine in the autumn of the year 1908; that soon after Hewitt acquired title to said land his mind became so impaired that' he lost his memory and his capacity for doing business; that none of his heirs knew anything of it, and that the plaintiff J. B. Folsom, his agent and afterward his administrator, had no recollection of it; and knew nothing, of the foreclosure until the defendant entered upon the land and took the crop produced there in the year 1907; that Hewitt purchased the land through the plaintiff Folsom who from the tirne of the purchase in 1900 acted as his agent' in renting the land, collecting the rents and paying the taxes;- that Folsom for'niany years resided in the city of Fargo-, and was and is a well-known real estate dealer, and the récords of Eddy county show that in each year the taxes against said land were regularly paid by Hewitt or by Folsom; that at any time prior to the time of the foreclosure sale' defendant knew that the land was being farmed and -cultivated to crop by'tenants in a-ctiial possession of the land, and he knew or could readily have ascertained the fact that Folsom-was paying the taxes on said land and receiving the rents and was representing the owners 'of it, and he knew that in all' probability the existence -of said mortgage was not known to J. B.' Folsom, or to any person having interest in the land, and yet 'he never in any manner attempted to give notice of his claim to Folsom or to any of the other plaintiffs, who are brothers and lie'irs -of Hewitt. ’
The facts so recited are evidently m-eant to- form the entire basis of the ultimate conclusion improperly set out as a finding of fact in *733the words: "That Frank D. Norton did not fairly and in good' faith purchase said land at said foreclosure sale. At the time of said purchase the defendant did not have an honest intention to abstain from taking an uneonseientious advantage’ of the owners of said land through the forms or technicalities of law. He did not purchase the land at said foreclosure sale with an absence of all information or belief of facts that would render the purchase unconscientious.”
The only conclusion of law entered as such by the court is in the words: “As a conclusion of law the court finds that the foreclosure sale under which the defendant claims title to said land is void, and that the same should be canceled and annulled and that the net ¡proceeds of the crop produced on said land in the year' 1907 which the defendant received, amounting to the sum of $486.25, should be applied as money received by him to apply in satisfaction and discharge of the amount due on said first mortgage and then to the amount due on the second mortgage, and that the balance of said mortgage debt which the plaintiffs have tendered, amounting to the sum of $275, shall be paid to the defendant or paid to the clerk of the court for the use and benefit of the defendant, and that on such payment being made, the clerk shall enter judgment herein to the effect that the said mortgages and each of them be canceled and discharged, and the said foreclosure sale be canceled and declared and adjudged to be void, and that the plaintiffs have their cost of this action,” etc. I believe that the most careful .scrutiny will fail to disclose in these findings any valid grounds for the conclusion just recited. It appears that the mortgage foreclosed was recorded in 1897, at the time it was given, and was at all times thereafter constructively known to the plaintiffs and all persons claiming title to the land. The note which the mortgage secured fell due on November 10, 1900, but was not paid, and for a period of almost seven years thereafter the annual interest was also unpaid. Appellant, notwithstanding this entire disregard by, the owner.of the land and his agents of the existence of the mortgage and the fact that it was long overdue, waited until only a.few months, before the note would, become void by the statute’,of limitations,-and then, commenced and regularly conducted a foreclosure ,by advertisement. At the sale he .became the purchaser, and, while it appears that the price bid by him was very considerably below the actual *734value of the land, he bid what he evidently supposed was the amount due upon his mortgage and the sale being regular in all respects, the mere fact of inadequacy in price will not operate as a reason for bolding the mortgage invalid. He did not attempt to take the rents or value of the use and occupation of the land even during the year of redemption until after he had received a sheriff’s deed of the land. And then, no redemption being made, he took them from the tenant in possession as he had an entire right to do without being liable to the charge that he was converting the grain so received as rent. There is nothing to show that he knew of Hewitt’s impairment of mind or loss of memory or capacity for doing business. There was no duty upon appellant to record his assignment of mortgage or to notify Folsom that he held the mortgage. On the other hand,, Folsom, who in 1900. purchased the land and had been continuously from that time acting as Hewitt’s agent for the purpose of looking after the land ■ was inexcusably negligent of his principal’s interest in failing to provide for the payment of either interest -or principal upon the mortgage which he knew was due in 1900. The fact that he forgot about or had no recollection of the mortgage rather aggravates than excuses his negligence. There is certainly not the slightest evidence of bad faith on the part of appellant in the fact that he did not search the tax records or inquire of the tenant on the land or take other means to ascertain the address of Folsom and when ascertained notify him that he hald an overdue mortgage on the land, when the mortgage had been for a period of 10 ears or more spread upon the records of Eddy county, and Folsom, a real estate dealer who had purchased the land for Hewitt, must have known of its existence and the fact that it was unpaid, long past due, and liable to foreclosure at any time.
This court has held that in a case where the notice of sale stated the amount due on the loan to be $81.96 when it should have been only $67.50, according to the terms of the notes that "there is no ■ allegation of fraud or bad faith in inserting a wrong amount and there is no allegation that anyone was misled thereby,” and consequently the validity of a foreclosure otherwise legal was not affected by such misstatement. It has also held in the same case that “mere inadequacy of the price in a foreclosure sale is not ground to set aside the foreclosure in the absence of fraud, undue *735advantage, or prejudice.” In this case 160 acres of land or an amount the same as that covered by appellant’s mortgage in the case at'bar was sold for $81.96, and the court refused to disturb the foreclosure under an attack very much the same as that made in this case. Grove v. Gt. Nor. Loan Co., 17 N. D. 352, 116 N. W. 345.
Unless inadequacy of th.e price paid by appellant or the fact that his notice of foreclosure did not state the true amount due on his note at the time of sale are to be regarded as reasons sufficient for invalidating the foreclosure, there are none other. If he had knowledge of Hewitt’s insanity and that Hewitt was without a competent representative duly authorized to look after the title to the land, or had done any affirmative act which prevented the knowledge of his foreclosure from coming to the knowledge of Hewitt’s representative, the case would have been different. The facts seem to be, however, that appellant after waiting until his note was about to outlaw proceeded publicly to advertise the land for sale, and that at a sale regularly in all respects conducted according to law he bid what he believed to be the amount due on his mortgage, and in so doing became the highest''bidder at the sale.
By due publication of the notice of sale plaintiffs had the notification which the law provides as full and sufficient If this- sale can be brought in question, any sale under foreclosure by advertisement, where the land is bid in by the mortgagee at the amount due on the mortgage debt and the price thus paid is inadequate to the value of the land, or there is some slight'mistake-.'in stating the amount due, may be brought in question, and titles to land throughout the state be thus unsettled. ' I believe that, where a foreclosure is conceded to be in all respects valid, this court should not affirm a decree declaring it invalid and void for fraud, unfairness or bad faith under a sweeping generality that the findings of fact of the district court are in plaintiff’s favor, and such findings fully sustain the allegations of the complaint. If district courts are to be permitted, as was done in this case, as a basis for adjudged actionable fraud, under the guise of a finding of fact, to insert a conclusion pure and simple without support in other findings, that a purchase was not made fairly and in good faith, then it will be possible in every case where the judgment role is alone *736considered for the. district court to effectively shut out the cpnsideration by this court, of .the important question of whether or not the facts considered by it show bad faith, or warrant the, decree so holding.
125 N. W. 310.
An examination of the evidence taken and appearing in the statement of the case shows beyond question that the findings referred to were dra.wn even more strqngly in favor ,of plaintiff’s contention than the evidence warrants," and that the only basis for the conclusion of. unfairness and bad faith on appellant’s part are the facts hereinbefore recited. However that may be, the findings fairly considered without reference to the evidence show no reason for declaring the foreclosure invalid. But, even though the foreclosure of the mortgage brought in question were invalid, the further action of the district court in including in its decree a mortgage that has not been foreclosed; or redeemed from, or shown to be due and payment tendered thereon, is certainly anomalous. Upon what principle a valid mortgage upon which no action whatever has been taken .by the mortgaged can in this manner and in a suit of this character be brought in question, and a debt claimed to be due from the mortgagor to-the mortgagee offset against it, I am unable to discover.