Child v. Morgan

52 N.W. 1127, 51 Minn. 116, 1892 Minn. LEXIS 23

Opinion

Dickinson, J.

The principal question to be decided is as to the validity of an attempted statutory foreclosure of a mortgage, through which the plaintiff claims to have acquired title to the land in controversy, which consists of lots twenty-three (23) and twenty-four (24) in block (15) in Motor Line addition to Minneapolis. Little, who owned the land in 1886, executed the mortgage to Hill, embracing as the premises mortgaged these two lots, with a third lot, numbered twenty-two (22.) The mortgage was in the usual form of such instruments, save as to the terms of the condition of defeasance. This condition was that the mortgagor should pay “the sum of $700, said $700 to be a specific lien of $233.33 on each of the above-described lots, releasable at any time by the payment of said amount of $233.33, together with accrued interest, * * * according to the conditions of one certain promissory note executed by M. O. Little, bearing even date herewith.” The power of sale was in the usual form, authorizing the sale of “the hereby granted premises” if default should be made in the payment of “ said sum of money, or the interest, or any part thereof.”

In 1890 the mortgagee, Hill, proceeded to foreclose the mortgage by advertisement. In the notice of sale the sum of $752.70 was claimed as the amount due on the mortgage, the notice being evidently prepared on the theory that the mortgage constituted an entire and unapportioned lien for the whole debt upon all the lots, there being in the notice no reference to any division or apportionment of that sum with respect to the several lots. At the sale in March, 1890, each of the lots was first offered separately. There being no bids, they were then offered and sold together, the mortgagee being the purchaser, for the gross sum of $812.62. He sold and assigned the rights thus acquired to one Davis, and the latter, after the expiration of the time for redemption, no redemption having been made, sold and conveyed the two lots here in question (23 and 24) to the plaintiff.

What was the import and effect of the clause embraced in the condition of the mortgage, making the debt of $700 “a specific lien of $233.33 on each of the above-described lots?” This must be supposed to have been considerately placed in the instrument, with the intention that it should have some real effect, and in accordance with the natural import of the language used. We consider, as did the district court, that this must be construed as an apportionment of the whole debt named, so as to charge one third of it separately upon each lot. That this was a dividing up of the whole debt for some purpose connected with the creation of the mortgage lien cannot be doubted. What that purpose was is declared in terms of certain and definite import, “said $700 to be a specific lien of $233.33 on each of the above-described lots.” It would be inconsistent with this to construe the mortgage as constituting a general and unapportioned lien for the whole debt named on all the property as an entirety. The very purpose of the mortgage was to create and define the lien to be imposed on the property, and the conclusion seems to be unavoidable that this particular, specific provision was intended to have the effect above indicated, thus qualifying what would, without this clause, have been the effect of the more general terms of the instrument. The clause recited cannot have been intended merely as an agreement by the mortgagee to release individual lots from the general lien of the mortgage upon payment of the sums specified. The plain import of the language extends its meaning beyond that, and makes the charge for one third of the debt a specific lien on each lot. This construction is not inconsistent with, nor opposed by, the general terms, in which the power of sale is expressed. That is to be construed in connection with the former provisions of the mortgage defining the nature and extent of the lien thereby created. The power is as consistently applicable if the debt be regarded as divided, and a lien to secure one third of the same imposed on each lot, as it would be if the lien be regarded as entire and unapportioned.

The mortgage, then, created a separate, distinct lien upon each lot to secure the payment of one third of the debt, and the proceedings to effect a foreclosure under the power should have been such as the mortgage, so construed, required. The notice of sale, not stating the amount claimed to be due on the mortgage, as respected each lot separately, was fatally defective, and the sale of the three lots together was also unauthorized, and for both reasons the foreclosure was void. Hull v. King, 38 Minn. 349, (37 N. W. Rep. 792;) Mason v. Goodnow, 41 Minn. 9, (42 N. W. Rep. 482;) Bitzer v. Campbell, 47 Minn. 221, (49 N. W. Rep. 691;) Barge v. Klausman, 42 Minn. 281, (44 N. W. Rep. 69.) The mortgage liens being, in legal effect, separate liens upon the several lots, the fact that no bids were received on the offer of the lots for sale separately did not afford any legal reason for nor justify selling them together.

The court, finding the mortgage foreclosure invalid, although it was found that the plaintiff was in possession of lot twenty-four, (24,) directed a judgment denying any relief to the plaintiff, and dismissing the action. But the plaintiff’s possession of lot twenty-four (24) was enough to enable him to maintain this action under the statute to determine adverse claims as to that lot, even though he failed to show title thereto as alleged. Barber v. Evans, 27 Minn. 92, (6 N. W. Rep. 445;) Herrick v. Churchill, 35 Minn. 318, 319, (29 N. W. Rep. 129.) All of the defendants claim mechanics’ liens on that lot; some of them also claiming liens on lot twenty-three, (23.) Hence the failure to show title through the mortgage foreclosure did not justify the judgment denying relief, as against the claims of the defendants, if such claims were not well founded. This brings us to a consideration of the lien claims of the defendants.

The evidence on the part of the defendants was insufficient to establish the liens asserted by them. This evidence consisted only of the pleadings in a former action, and the findings of the court on the trial thereof, embracing the order of the court for the entry of judgment in accordance with the conclusions of law expressed. That was an action prosecuted by this defendant Morgan against some or all of these defendants, with others, to foreclose mechanics’ liens on this property. The findings of the court, thus introduced in evidence in this action, set forth the facts showing the existence of such liens, and as legal conclusions therefrom it was declared that the several lienors named were entitled to a judgment as therein specified, and it ordered that a judgment be entered accordingly. No judgment appears, however, to have been in fact entered. The findings of the court and order for judgment did not constitute a judgment, and were not intended as such. They did not finally determine, as a judgment does, the matters in issue. The entry of a formal judgment, which should constitute a final adjudication, was contemplated and directed; but no such judgment was entered. These findings were as inconclusive as a verdict of a jury, which, without judgment thereon, has not the effect of an adjudication, Schurmeier v. Johnson, 10 Minn. 319, (Gil. 250,) and is not admissible in evidence, Pitton v. Walter, 1 Strange, 162; and so of a report of a master in chancery, Nash v. Hunt, 116 Mass. 237. Judgment would not necessarily be entered on the findings and order, any more than on a verdict of a jury. A new trial might be awarded, and no judgment ever be entered. Under our statute appeals will lie from judgments, and from orders involving the merits of the action, but, as has been often held, such findings of a court and orders for judgment are not appealable, either as judgments or as orders involving or determining the merits of the action. Von Glahn v. Sommer, 11 Minn. 203, (Gil. 132;) Ryan v. Kranz, 25 Minn. 362, and cases cited; Shepard v. Pettit, 30 Minn. 119, (14 N. W. Rep. 511.) Since the findings and order did not constitute an adjudication .in favor of the lien claimants, they were not competent as evidence in this action to prove the liens asserted by them. Auld v. Smith, 23 Kan. 65. This was not, of course, primary evidence of the furnishing of materials or labor, — of the facts from which liens arise, — and, if not. an adjudication' of such facts between the parties hereto, (or privies,) we know of no rule of evidence which would permit proof of such facts to be made by presenting the inconclusive findings of the court in another cause. It may be added that, even if judgment had been entered in the former action, it would not have been effectual as to the mortgagee Hill, or those succeeding to his rights, and who were not parties to that action, for the action was dismissed as to Hill, at the opening of the trial thereof. The conclusion on this branch of the case is that the evidence did not prove the lien claims relied upon by the defendants, and the plaintiff is entitled to a new trial, except as to the two defendants Pulver, to whose answers setting up their liens there was no reply. The court having found in their favor because their claims were not put in issue, the defect in the proof was immaterial, and the judgment as to them should be affirmed.

If the answers were defective in not setting up the facts upon which' the liens were founded, the plaintiff does not seem to have raised the objection at the trial; and, if the case were to turn on that point, it would not be favored on appeal. But our decision rests on other grounds.

The judgment will be affirmed as to the defendants Edward F. and Martin M. Pulver, and reversed as to the other defendants.

(Opinion published 53 N. W. Rep. 1137.)