Lane v. Holmes

57 N.W. 132, 55 Minn. 379, 1893 Minn. LEXIS 219
CourtSupreme Court of Minnesota
DecidedNovember 29, 1893
DocketNo. 8540
StatusPublished
Cited by10 cases

This text of 57 N.W. 132 (Lane v. Holmes) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lane v. Holmes, 57 N.W. 132, 55 Minn. 379, 1893 Minn. LEXIS 219 (Mich. 1893).

Opinion

Buck, J.

The plaintiff and her husband executed to the defendant a promissory note as follows:

“13,000. Moorhead, July 10, 1885. Five years after date I promise to pay to the order of John W. Holmes three thousand dollars, at Fulton Bank, New York, value received, with interest before and after maturity at the rate of-per cent, per annum until paid.. Alpheus F. Lane. Mary Cole Lane.”

At the same time they executed a mortgage on the northeast quarter of section thirty two (32) T. 139 E. 48, in Clay county, to secure the payment of said note, which mortgage contains this-clause: “Provided, nevertheless, that if said Mary Cole Lane and Alpheus F. Lane, parties of the first part, their heirs, shall well and. truly pay or cause to be paid to the party of the second part, his-heirs, the sum of three thousand dollars and interest, according to-the conditions of one promissory note in the amount of $3,000, made, executed, and delivered by said Mary Cole Lane and Alpheus F„ Lane to said John W. Holmes, due five years after date, which said note is without interest, bearing even date herewith.”

There being default in the payment of the note, or any part thereof, the defendant, residing in the state of New York, sent the note and mortgage to an attorney of Moorhead, Minn., with instructions to foreclose the mortgage, but without instructions as to-the amount due. The attorney foreclosed the mortgage, and in the notice of such foreclosure proceedings it was claimed that there was due upon said note and mortgage the sum of $4,102, which amount was arrived at by computing interest upon the note at the rate of seven per cent, per annum from the date thereof to the date of the notice of foreclosure sale; and the said premises were bid off, December 15, 1890, for that sum, with expense of foreclosure added, amounting to $4,222.34. The premises were bid in by the-[382]*382defendant’s attorney for and in tbe name of defendant in good faith, and .without any design on the part of the defendant or his said attorney to defraud or injure plaintiff, or prejudice her interests or rights in the premises, as the said premises at the time of such foreclosure sale were not of greater value than $2,500, and never were, at any time between the time of such sale and the time of the commencement of this action, of greater value than $3,000. The defendant did not know until after such foreclosure sale that such interest had been included in the amount for which said premises were so bid in for him by his attorney, as it was the purpose and intent of the defendant by such foreclosure to extinguish the indebtedness of the plaintiff and her husband to him under said note and mortgage; and that the only instructions he gave to his said attorney in the foreclosure proceedings were that the premises should be bid in for the defendant for the full amount due, regardless of the value of the mortgaged premises, it not being the intention of the defendant at the time of the execution of the mortgage to charge interest upon the indebtedness thereby secured, nor the understanding of the plaintiff that interest should be charged the: e. pon. The re was no redemption from such foreclosure sale, and the plaintiff did not have actual notice of the sale or the amount bid until six months subsequent to the time of such sale, although her brother was her tenant, and cultivating the premises during the foreclosure proceedings, and boarded near said farm, and upon whom due notice of foreclosure proceedings were served as the party actually in possession, as required by law. The plaintiff never objected to the sale on account of the amount claimed in the notice of sale being in excess of the amount legally due upon the mortgage debt, and she has never tendered to plaintiff any amount upon said mortgage debt, and the defendant did not at the time of sale, nor at any other time, ever receive from the sheriff or other person any money as the proceeds of said sale.

This action was commenced in the month of November, 1892, to recover the sum of $1,032.80, being interest so added to the principal of said note, and claimed to be the surplus over and above the amount actually due on said note and mortgage at the time of such, foreclosure sale. On the trial in the court below the defendant in open court tendered to the plaintiff a deed of conveyance to the [383]*383plaintiff of tbe premises described in said mortgage upon tbe payment to tbis defendant of tbe sum of $3,000, without interest or costs of said foreclosure suit, wbicb tender was refused by tbe said plaintiff. Briefly, tbe case is tbis: Plaintiff or lier husband, on July 10, 1885, or before that time, received of defendant $3,000, wbicb sum was to be without interest, as they claim, and payable in five years, secured by a mortgage on her land, worth at tbe time of tbe foreclosure sale, December 5, 1890, not exceeding tbe sum of $2,500, and at no time since of greater value than $3,000; and they now assert their legal right to pay and satisfy tbe note and mortgage with accrued interest from tbe maturity of tbe note, July 10, 1890, with tbe mortgaged property of less value than tbe amount legally due on tbe mortgage, and then, in addition to tbis, to recover a judgment against tbe defendant of $1,032.80, an alleged surplus on tbe foreclosure sale, and wbicb accrued, if at all, by an error or mistake on the part of defendant’s attorney in tbe computation of tbe interest on the note and mortgage. If tbis action is sustained, the plaintiff will recover a judgment for $1,032.80, for which she never paid any consideration whatever. We have no hesitation in saying that such a claim is unconscionable, and it would be a reproach to our jurisprudence if tbe defendant cannot be afforded relief.

In view of tbe admission of tbe parties as to tbe agreement not to pay interest on tbe $3,000, we are not necessarily called upon to decide whether tbe note drew legal interest; but when we examine tbe mortgage, and find therein a clause wherein it is stated that it is given to secure tbis note of $3,000 and interest, and then also stating that the mortgage is given to secure tbe same note without interest, we are not surprised that tbe attorney construed tbe note as drawing interest. In tbe case of Hoopes v. Collingwood, 10 Colo. 107, (19 Pac. Rep. 909,) tbe court assumes that a note similar in form to tbe one in tbis case drew legal .interest. Such uncertainty as to whether tbe note and mortgage drew interest would fully justify tbe findings of tbe court below that tbe interest so added was done in tbe utmost good faith by tbe attorney, and we do not decide but what be was legally right in such computation, so far as relates only to tbe interest on tbe note. But, in addition to tbis complex question of tbe payment of interest involved by tbe terms of tbe [384]*384note and mortgagé, it now appears that at the time of tbe execution of the note and mortgage the parties understood that neither the note.nor mortgage should draw interest at any rate. Of this latter fact the defendant’s attorney does not appear to have been notified, or aware of that fact at the time he so computed the interest on the note or at the time of the foreclosure sale. If he had known of this important and conceded fact, it would have thrown such light upon the question as would undoubtedly have induced him to have foreclosed the mortgage without any claim for the five-years interest, and thus have prevented this unfortunate litigation.

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Cite This Page — Counsel Stack

Bluebook (online)
57 N.W. 132, 55 Minn. 379, 1893 Minn. LEXIS 219, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lane-v-holmes-minn-1893.