Hebden v. Bina

116 N.W. 85, 17 N.D. 235, 1908 N.D. LEXIS 41

• Court: North Dakota Supreme Court
• Decided: April 3, 1908
• Status: Published

Opinion

Fisk, J.

This is the statutory action to determine adverse-claims to real property. The complaint is in the usual form, alleging plaintiff’s ownership in fee of the property in question, and that defendant claims a certain estate or interest therein adversely to plaintiff, and containing the usual prayer for relief. The defendant, Bina, answered, denying plaintiff’s title, -but admitting that he claims an estate or interest in the property as alleged, without setting out the nature or source of such adverse interest, and he •prayed merely for a dismissal of the action with costs. For the purpose of proving title plaintiff introduced in evidence the record of a receiver’s receipt, issued for the property by the United States to defendant, dated August 27, 1890 ; also the record of a mortgage from defendant, Bina, to the Bank of Minot, dated September 4, 1890; also the record of a mortgage from defendant, Bina, to the Bank of Minot, dated September 4, 1890, as recorded in Book 15 of Mortgagees, at page 556, together with the record of an assignment -by the Bank of Minot to one Nelson of a mortgage claimed to be the mortgage aforesaid, but which describes the same as. “the mortgage executed by Matj Bina and his wife to the said Bank of Minot, and recorded in Book F of Mortgages on pages 556-558 in the office of the' register of deeds of the county of Walsh, state of North Dakota.” Then followed record proof of foreclosure-proceedings by advertisement of the mortgage aforesaid, culminating in the issuance to said Nelson of a sheriff’s deed; also the record proof of a warrant)' deed of the pemises from Nelson to plaintiff. No question is raised as to the regularity of such foreclosure proceedings, provided the assignment of the mortgage to Nelson was sufficient to authorize him to foreclose such mortgage by advertisement; it being respondent’s contention that such assignment was insufficient for this purpose, and hence that the foreclosure proceedings are void. It is appellant’s contention that such proof was sufficient to show title in him as alleged, but, even If this is not true, that he sufficiently proved title by showing possession of the premises from which possession his title is presumed, and also that defendant is estopped to assert title as against him on account of the contract relations between them of landlord and tenant arising through certain written leases offered in evidence. Appellant also contends that defendant’s answer is insufficient to raise any issue, because it fails to set forth defendant’s adverse claim to the property, and contains merely a denial of plaintiff’s title. Tjhe trial court held plaintiff’s proof insufficient to show title as alleged, and entered judgment dismissing the action without prejudice, from which judgment this appeal is prosecuted.

These questions will be disposed of in the order presented in appellant’s brief. 'Was plaintiff’s proof of title, based upon the foreclosure proceedings, sufficient? In answering this question we shall assume (without deciding) that if the plaintiff, through the warranty deed from Nelson to him and the foreclosure proceedings under the mortgage, acquired all of defendant’s interest in the property under the receiver’s receipt, he is entitled to maintain this action. We are therefore required to determine, first, whether the assignment of the mortgage to Nelson conferred upon him the legal title to the mortgage, so as to authorize him to foreclose the same by advertisement; second, if -this is answered in the negative, then whether there is any other sufficient proof of plaintiff’s title; third, whether defendant is estopped by reason of the leases which were introduced in evidence from questioning plaintiff’s title; and, lastly, whether the defendant’s answer, which embraces merely a denial, is sufficient to raise an issue .as to plaintiff’s title. We are agreed that each of these questions must be answered in respondent’s favor, and we will briefly give our reasons for so holding.

1. The assignment of the mortgage was insufficient to authorize Nelson, the assignee, to foreclose by advertisement, for the reason that such assignment did not operate to vest in such assignee the legal title to the mortgage. ' The assignment did not describe the mortgage with sufficient definiteness. It described it as a mortgage executed and delivered by Matj Bina and wife, and recorded in Book F of Mortgages, while the mortgage foreclosed was exe.cuted and delivered by Matj Bina, and was recorded in Book 15 of Mortgages. The proof shows that there were two mortgages executed and delivered by Bina to the Bank of Minot and recorded in Book 15. If we assume, as -contended by appellant, that the intention was to assign the mortgage which was foreclosed, and which was a mortgage executed by Matj Bina alone, and which was recorded in Book 15, instead of Book F, we are confronted with the fact that the record of such assignment fails to impart such information to the public. From an inspection of the record of such assignment it is impossible to say with any degree of certainty that the mortgage assigned was intended to be the same mortgage which was foreclosed. Our statute (section 7457, Rev. Codes 1905) -provides: “To entitle a party to make such foreclosure [by advertisement] it shall be requisite: * * * Subd. 3. That the mortgage containing such power of sale has been duly recorded, and if it shall have been assigned, that all the assignments thereof have been duly recorded.” A similar statutory provision is in force in our sister states of Minnesota and South Dakota, and these statutes have been- repeatedly construed, both in this state and in the state aforesaid, to mean that before a person can foreclose a mortgage by advertisement he must be the owner and holder of the record title of the mortgage. Morris v. McKnight, 1 N. D. 266, 47 N. W. 375; Brown v. Comonow (N. D.) 114 N. W. 728; Backus v. Burke, 48 Minn. 260, 51 N. W. 284; Lowry v. Mayo, 41 Minn. 388, 43 N. W. 78; Burke v. Backus, 51 Minn. 174, 53 N. W. 458; Dunning v. McDonald, 54 Minn. 1, 55 N. W. 864; Clarke v. Mitchell, 81 Minn. 438, 84 N. W. 327; Thorpe v. Merrill, 21 Minn. 336; Ross v. Worthington, 11 Minn. 438 (Gil. 323), 83 Am. Dec. 95; Johnson v. Sandhoff, 30 Minn. 197, 14 N. W. 889; Martin v. Baldwin, 30 Minn. 537, 16 M. W. 449; Van Meter v. Knight, 32 Minn. 205, 20 N. W. 142; Benson v. Markoe, 41 Minn. 112, 42 N. W. 787; Hickey v. Richards, 3 Dak. 345, 20 N. W. 428; Langmaack v. Keith, 19 S. D. 351, 103 N. W. 210. In Morris v. McKnight, supra, it was said: “From the adjudicated cases and the wording of the statute we conclude that, when a party seeks' to foreclose his mortgage in this state by advertisement,, claiming such right as assignee, the record must show complete legal title to such mortgage in such assignee. Otherwise such foreclosure will be a nullity.” And quoting with approval from a Minnesota case the court further said: “The statute authorizing this, method of foreclosure evidently designs that there shall be of record a legal mortgage, and that the record shall be so complete as, to satisfactorily show the right of the mortgagee or his assignee to invoke its aid.” In Morrison v. Mendenhall, 18 Minn. 232 (Gil. 212), it was held, construing a similar statute, that: “The manifest purpose of this requirement of the statute was to make the' contents of the mortgage, and, as far as the statute goes, to make the title of the mortgage, a matter of record; and, as it was for such purposes, it follows that they must be in writing. A mere equitable or parol assignment would not answer.” Appellant’s counsel says in his brief that Morris v. McKnight, has been expressly-departed from in McCardia v. Billings, 10 N. D. 373, 87 N. W. 1008, 88 Am. St. Rep. 729, in so far as it follows the doctrine of the early Minnesota decisions which lay down the rule of strict and. literal compliance with the statute in mortgage foreclosures by advertisement. Counsel is in error in assuming that any such rule-was announced or followed in the Morris-McKnight case, as an examination of the opinion in that case will disclose. Not having-the legal title to the mortgage, Nelson could not foreclose the same by -advertisement, and hence the sheriff’s deed to him was a. mere nullity, and plaintiff therefore acquired no title through the warranty deed from Nelson. This sufficiently disposes of appellant’s, first contention.

But appellant contends that respondent is estopped by his laches from questioning the validity of the foreclosure, and in support of his contention he confidently relies upon the decision of this court in Higbee v. Daeley, 15 N. D. 339, 109 N. W. 318. It was there-held that a foreclosure by advertisement, made in the name of the-mortgagee by the assignee, who.se assignment was unrecorded, is voidable merely, and not a nullity. It was also held under the facts-in that case that a party desiring to have such foreclosure adjudged' void is guilty of laches if he neglects to assert his rights promptly-upon discovering the facts, and for such reason is estopped from asserting title as against third persons, who, in good faith, have purchased what upon its face appeared to be a perfectly good title to-the land, and who, in reliance thereon, have gone into possession and made valuable improvements thereon. The facts in the c-ase at bar widely differ from those in the case last referred to-. In the case at bar the record upon its face discloses an irregular or void foreclosure. In other words, it discloses a foreclosure in the name of one Nelson, and it fails to disclose any ownership in him of the mortgage foreclosed. The plaintiff is in a' court of equity, asking affirmative relief, based upon an alleged title acquired through such foreclosure proceedings, and he cannot be considered a good faith purchaser, as he took his deed necessarily with full knowledge of such irregular foreclosure as disclosed by the public records. On the other hand, in Higbee v. Daeley, the defendant was the. person asserting title under the .foreclosure which, as before stated, was in all things regular upon its face. He had a right to invoke the doctrine of estoppel as a defense, while in the case at bar the plaintiff, who is required to establish a legal title, is seeking to do so 'by urging defendant’s laches in failing to affirmatively attack such foreclosure proceedings. Defendant was not obliged to act in order to protect his rights, but could wait, as he in fact did, until his title was attacked by plaintiff.

It is next contended that plaintiff proved possession of the land prior to the commencement of the action, and that this was sufficient proof of title, for the reason that the law presumes title from possession, in the absence of other proof. The difficulty in the way of giving force to this contention is the fact that plaintiff wholly failed to show such possession. Plaintiff sought to show such possession by the introduction in -evidence of certain written leases of the premises signed by the defendant, -being three in number, covering the period from November 1, 1898, to September 1, 1903. The first two relate to the -time prior to October 18, 1902. These were objected to upon the ground that no proper foundation foi their introduction had been laid by proof of their execution. We think this objection was well taken, and hence they cannot be considered. The third lease upon its face recites that it was made -by Bina as party of the first part and one “Thomas J. Baird, owner of the real estate” described, as party of the second part, and it was signed by said persons individually. Plaintiff offered certain testimony tending to show, however, that Baird was acting as plaintiff’s agent in making these leases, but he failed in proving such fact by competent testimony. Plaintiff’s only proof of such fact consists of the testimony of the witness Frazer, as follows: “Q. Mr. Frazer, I notice that in Exhibit B Mr. Baird, the lessor, is named as agent, and that he appears as lessor in Exhibits A and C. State whether or not, so far as you know, Mr. Baird was acting in this matter as representing Mr. Hebden, the plaintiff in this suit.” This question was objected to as “immaterial, irrelevant, calling for a conclusion of the witness,” and upon other grounds, after which the witness answered: “He was acting as representing Mr. Hebden.” This testimony falls far short of proving such fact. There was no proof that the witness possessed any personal knowledge regarding the fact sought -to be established, and the question did not call for an answer based upon any such knowledge. All this testimony amounted to, at the most, was 'to show that the witness had no knowledge that Baird was acting for any one other than Hebden in signing the' leases. It did not amount to a statement that he was, as a matter of fact, acting for Hebden. We conclude, therefore, that plaintiff wholly failed in any respect to prove title to the property as alleged.

Appellant’s third contention to the effect that defendant is es-topped to question plaintiff’s title is based upon the theory that the relation of landlord and tenant existed between the parties through the leases aforesaid. This contention is sufficiently answered by what we have just stated regarding plaintiff’s failure to prove any such relation. The proof, at the most, discloses that Bina was the tenant of Baird, and not Hebden. But, conceding that appellant succeeded in establishing that defendant was holding merely as his tenant, it is well settled that a tenant is not estopped to deny his landlord’s title in air action such as this, but he is thus estopped merely in actions arising out of the relation of landlord and tenant. 18 Am. & Eng. Enc. Law, 419-421; 24 Cyc. 942, and cases cited; Jochem v. Tibbells, 50 Mich. 33, 14 N. W. 690; Shaw v. Hill, 83 Mich. 322, 47 N. W. 247 21 Am. St. Rep. 607; Kuefel v. Daly, 91 Ill. App. 321; Young v. Severy, 5 Okl. 630, 49 Pac. 1024; McKie v. Anderson, 78 Tex. 207, 14 S. W. 576; Van Winkle v. Hinckle, 21 Cal. 342; Franklin v. Merida, 35 Cal. 558, 95 Am. Dec. 129.

Lastly it is contended by appellant’s counsel that defendant’s answer, which in effect contains a bare denial of plaintiff’s alleged title, is insufficient to raise an issue, and therefore the trial court erred in denying his motion to strike the same out. This contention is based upon the language of section 7526, Rev. Codes 1905, as follows : “In an action to determine adverse claims a defendant in his answer may deny that the plaintiff has the estate, interest, lien or incumbrance alleged' in the complaint, coupled with allegations setting forth fully and particularly the origin, nature and extent of his own claim to the property; * * * or he may likewise set forth his right in the property as a counterclaim,” etc. We are clear that this contention is erroneous. It is an unwarranted construction of this statute to say that the legislature intended thereby to resrict defendant’s answer in such cases to such denials only as are coupled with allegations setting forth the origin, nature and extent of his own claim to the property. This court in Larson v. Christianson, 14 N. D. 476, 106 N. W. 51, in effect held contrary to such contention, and we think the clear weight of authority is in accordance with the rule there announced. See Pennie v. Hildreth, 81 Cal. 127, 22 Pac. 398; Adams v. Crawford, 116 Cal. 495, 48 Pac. 488; United Land Ass’n v. Improvement Co., 139 Cal. 374, 69 Pac. 1064, 72 Pac. 988; Reed v. Murry, 95 Cal. 48, 24 Pac. 841, 30 Pac. 132; Wheeler v. Paper Mills, 62 Minn. 429, 64 N. W. 920.

(116 N. W. 85.)

It follows from the views herein expressed that the judgment appealed from was correct, and must therefore be affirmed, and it is so ordered.

All concur.