Hellstrom v. First Guaranty Bank

209 N.W. 212, 54 N.D. 166, 45 A.L.R. 1487, 1926 N.D. LEXIS 130
CourtNorth Dakota Supreme Court
DecidedJanuary 7, 1926
StatusPublished
Cited by13 cases

This text of 209 N.W. 212 (Hellstrom v. First Guaranty Bank) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hellstrom v. First Guaranty Bank, 209 N.W. 212, 54 N.D. 166, 45 A.L.R. 1487, 1926 N.D. LEXIS 130 (N.D. 1926).

Opinion

The plaintiff seeks to recover from the defendant damages for a breach of an alleged contract to effect redemption on plaintiff's behalf of his land from a mortgage foreclosure sale. The jury returned a verdict in favor of the defendant. The plaintiff moved the court below for a new trial, which was denied. From a judgment of dismissal, the plaintiff has appealed.

From the record it appears that in the month of December, 1919, the plaintiff, F.O. Hellstrom, was the owner of a tract of land comprising some 154 acres, described as the south-west quarter of the northwest quarter, and lot four, in section four, and the south-east quarter of the north-east quarter, and lot one, in section five, township one hundred forty-seven, range thirty-nine, west of the fifth principal meridian, in Polk county, Minnesota, situated some six miles from the city of Fosston. On December 10, 1919, the plaintiff executed to the defendant bank a second mortgage upon this property for $3,000. A first mortgage of $1,500 upon the premises being held by the Capital Trust Savings Bank of St. Paul. In June, 1921, plaintiff not being able to pay the first mortgage, the same was foreclosed, and a sheriff's certificate of sale issued, the redemption period expiring about the 24th of June, 1922. Partial payments had been made by the plaintiff on the $3,000 mortgage to the defendant bank, but in June, 1922, there remained an unpaid balance of about $1,100. The plaintiff failed to redeem from the foreclosure made by the Capital Trust Savings Bank of St. Paul, and in June, 1922, the defendant, in order to protect its second mortgage, effected a redemption and secured a sheriff's deed to the property.

The plaintiff in his complaint alleged, and also contended at the trial, that in the month of May, 1922, he entered into an oral agreement with *Page 169 the defendant bank, through its president, Mr. F.A. Lahr, whereby it was covenanted and agreed by the defendant that the defendant would redeem the premises from the foreclosure sale under its second mortgage and hold the title in trust for the benefit of the plaintiff, and that the defendant would negotiate and accept from the plaintiff as redemption payment a first mortgage loan in the sum of $1,800 and in addition thereto a second mortgage from the plaintiff for the balance remaining unpaid on the first and second mortgages. That the plaintiff in good faith relied upon such agreement and took no further steps to effect a redemption of the property. That on the 29th day of June, 1922, Mr. E.T. Burke, acting as attorney for the defendant bank, notified plaintiff that the mortgages and notes under this agreement were ready to be executed and asked him to go to the bank and sign the same. That the plaintiff went to the bank and looked the papers over, that they appeared to be two mortgages and notes ready for his signature. That Mr. E.V. Lahr, the cashier of the bank, and Attorney E.T. Burke, were present. His testimony as to what occurred at this meeting is as follows: "I said to Mr. Lahr: `These papers seem to be all right as far as I can see, but I have another proposition which I will give you which you can consider. If you want the money instead of these notes and mortgages I can pay you off in full the entire amount.' `Well, of course,' he says, `we would rather have the money.' He says, `How soon are you going to get that money?' I said that money can be had in two hours and a half. And he said, `The sooner the better, and the better we will be satisfied.' So I went ahead and made my arrangements with Mr. Wilson. He was cashier of the Merchants National Bank of Mandan. I called him over the long distance 'phone, told him that I could make that arrangement, and if the bank still was going to go through with the deal with me that we had talked, to come over right away, that we had to have the money right away and be able to settle with them in order to get the redemption." The plaintiff claims that Mr. Wilson came over with a cashier's check, that he tendered the amount of money necessary to redeem to E.T. Burke, attorney for the defendant bank, and that it was refused, that the bank was closed and Mr. Lahr not to be found, and that the defendant, instead of complying with the terms of this agreement, took title to itself and refused to permit the plaintiff to redeem. That the premises were reasonably *Page 170 worth at the time of the expiration of the period of redemption, $11,200, and that the plaintiff has been damaged by reason of the breach of such contract in the sum of $8,428, less the sum of $2,500, the amount due upon the foreclosure sale and defendant's second mortgage.

The defendant bank, through its officers, in its answer, and at the trial, specifically and positively denied the making of any such agreement, but admitted that after the period of redemption had expired, and about the 29th of June, 1922, the bank agreed to deed the land to the plaintiff upon his paying the full amount due on the first and second mortgages, and upon his agreeing to dismiss certain litigation then pending between the plaintiff and the defendant in the district court of Burleigh county. That the plaintiff refused to accept this proposition and that later, and in the month of August, 1922, they sold the land to the Merchants National Bank of Mandan for less than the First Guaranty Bank had invested in the first and second mortgages.

The plaintiff has assigned sixteen specifications of error. They all relate to the admission or rejection of testimony.

The first six assignments may be considered together, as they relate entirely to the cross-examination of the witness George F. Wilson, the cashier of the Merchants National Bank of Mandan. Mr. Wilson was called as a witness by the plaintiff for the purpose of showing, apparently, that Mr. Wilson had come to Bismarck from Mandan on the evening of June 29th, 1922, for the express purpose of paying to the defendant bank the amount of money necessary to effect a redemption of the mortgages held by the defendant. On cross-examination this witness was permitted to testify over the objection of the plaintiff that on the 29th of June, 1922, the plaintiff, Hellstrom, was indebted to the Merchants National Bank of Mandan in the sum of $5,000, and that the Mandan Bank was not so much interested in advancing money to Mr. Hellstrom to effect a redemption as it was to secure whatever equity there might be in the Polk county land as additional security to its own claims against Mr. Hellstrom, and that later, and in the month of August, 1922, the bank actually did purchase this land from the First Guaranty Bank for a consideration of $3,400, clear of incumbrance.

The plaintiff strenuously contends that this was prejudicial error, that this cross-examination went far beyond the scope of the examination in chief, went into matters that were entirely irrelevant to any *Page 171 question asked the witness, Wilson, on direct examination, and that such evidence adduced on cross examination could not but prejudice the jury against the plaintiff for the reason that the jury might naturally conclude that the defendant Bank not having made any profit on the transaction, that therefore it should not be mulcted in damages.

We have analyzed the testimony of Mr. Wilson very carefully. Just prior to calling Mr. Wilson to the stand, the plaintiff had called for cross-examination under the statute, Mr. E.V. Lahr, cashier of the defendant bank, and had examined him minutely as to all transactions between the bank and Mr. Hellstrom in reference to the $3,000 mortgage on the Polk county land and the redemption of the same, and also asked the witness Lahr these questions:

Q.

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Bluebook (online)
209 N.W. 212, 54 N.D. 166, 45 A.L.R. 1487, 1926 N.D. LEXIS 130, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hellstrom-v-first-guaranty-bank-nd-1926.