Reitz v. Petersen

269 N.W. 811, 131 Neb. 706, 1936 Neb. LEXIS 275
CourtNebraska Supreme Court
DecidedNovember 20, 1936
DocketNo. 29758
StatusPublished
Cited by35 cases

This text of 269 N.W. 811 (Reitz v. Petersen) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reitz v. Petersen, 269 N.W. 811, 131 Neb. 706, 1936 Neb. LEXIS 275 (Neb. 1936).

Opinion

GOSS, C. J.

This is a controversy over the priority of mortgage liens on a quarter section of land. One of the defendants appeals [707]*707because her mortgage was awarded second place instead of first.

This suit was begun January 27, 1934, against Petersen and wife, the mortgagors, and against Flora Kruger, as administratrix of the estate of Emma L. Mueller, who had died. Plaintiff alleged that his lien was first and that of Emma L. Mueller, represented by defendant Kruger, was second. Plaintiff alleges estoppel against the Mueller mortgage. He alleges that Earl R. Petersen, the mortgagor, owning the south 100 acres of the quarter section, and desiring to purchase the north 60 acres from a third party, approached Mrs. Mueller, informed her of his situation and that it would be necessary for him to borrow enough to pay her off and $6,000 additional; that she said she had no place or investment in mind to use it, that the quarter section would be ample security for the whole sum of $13,000, that she would be willing to release her $7,000 mortgage and allow Petersen to borrow from some one' $6,000 on a first mortgage on the entire quarter section, and that she would accept a new mortgage of $7,000 to be expressly inferior and subsequent to the lien of a $6,000 loan to be obtained by Petersen. Whereupon Petersen, relying upon said agreement, made application to plaintiff for a loan of $6,000, representing to plaintiff that it would be secured by a first lien and that the $7,000 mortgage on the south 100 acres would be released by Mrs. Mueller; that when the transaction was consummated on March 1, 1930, the $7,000 new mortgage, drawn by the officers or employees of a bank, through inadvertence and mistake, did not expressly recite that it was inferior and subsequent to the $6,000 mortgage; that an officer or employee of said bank delivered the original $7,000 mortgage and a release thereof to Petersen with full knowledge that Petersen would exhibit said papers for the purpose of procuring a first mortgage loan from some person, and probably plaintiff, on the quarter section.

The administratrix sets up Mrs. Mueller’s mortgage, traverses the allegations of the petition, alleges that on March 1, 1930, that mortgage purported to be a first mortgage, and [708]*708alleges that Petersen and wife are incompetent to deny that the Mueller mortgage is first. She further alleges that plaintiff or his agents acting for him discovered prior to March 5, 1930, that the Mueller mortgage was on record in the office of the register’ of deeds prior to plaintiff’s mortgage and by some means unknown to this defendant they caused the record to be changed so as to allow plaintiff’s mortgage to be filed first. Defendant Kruger further alleges that the taking of the note ánd mortgage by Mrs. Mueller on March 1, 1930, constituted merely an extension for the term of two years of the debt due her from Petersen; that this defendant is entitled in equity to a lien upon the south 100 acres by virtue of the original mortgage and is entitled to a lien upon the north 60 acres by virtue of the mortgage of March 1, 1930.

The answers of Petersen and wife to the petition and cross-petition are general denials. Plaintiff filed a reply to the answer of the administratrix. It is chiefly an amplification of the allegations of the petition as to the issues of priority.

Prior to March 1, 1930, defendant Earl R. Petersen owned the south 100 acres of the quarter section involved and Mrs. Emma L. Mueller, of whose estate defendant Kruger is administratrix, held a $7,000 mortgage lien on that 100 acres. This mortgage was dated February 26, 1918, and was due March 1, 1933. It was released March 1, 1930. The release was recorded March 6, 1930, at 11 a. m.’ On March 1, 1930, the north 60 acres of the quarter séction was deeded to Petersen; that same day Petersén and wife made and delivered to Mrs. Mueller their mortgage on the entire quarter to secure loan of $7,000, and made and delivered to Reitz, plaintiff, their mortgage on the entire quarter section to secure a loan of $6,000. The $7,000 Mueller mortgage was actually filed for record in the office of the register of deeds of Madison county, Nebraska, on’ March 3, 1930, at 9 a. m., and the $6,000 Reitz mortgage was actually filed for record in the office of the register of deeds of Mádison county, Nebraska, on March 6, 1930, at 9 a, m.

[709]*709The note made by Petersen and wife to Mrs. Mueller for $7,000 on March 1, 1930, specifically states, and the statement is partly 'typewritten, as follows: “This note is secured by first mortgage bn thé SW14 sec. 9,' town 23, range 4, in Madison' county, Nebraska.” The $6,000 Petersen note to Reitz‘does hot purport to be secured by a first mortgage on the land. That note contains the following: “This note is secured by mortgage on the SW14 sec. 9, twp. 23, r. 4,' west, in Madison county, Nebraska.”

The Mueller mortgage was actually filed before plaintiff’s mortgage. Neither mortgage contains any recital as to their priority. These facts of' record, considered alone, would make the Mueller mortgage a first lien on the quarter section. We must look 'to the other evidence to find justifi-.. cation for the judgment of the trial court giving plaintiff’s mortgage priority.

E. H. Shumacher, 39, had been connected with the First National Bank of Tilden for 16 years and had been its cashier for six or seven years. He had known Mrs. Mueller about 10 years. She had a checking account, was a stockholder, and had a safe deposit box in the bank where she kept her papers and occasionally advised with the witness as to her business affairs. Probably not over 30 days prior to March 1, 1930, Mrs. Mueller-called the bank on the telephone and asked that the witness stop at her house, which he did when he went to dinner. We quote his exact language, when asked to' give their conversation: “Mrs. Mueller said to me that Earl Petersen had called at her home and informed her he was buying sixty acres of land adjoining the one hundred acres that he already owned, the one hundred acres being covered by this $7,000 first mortgage, and that Mr. Petersen had asked her if she could furnish him with $6,000 additional funds as the purchase of this additional sixty acres involved about that amount; and that she had told Mr. Petersen that she didn’t have the $6,000. Then Mr.' Petersen asked her if she would accept the payment of the $7,000 mortgage and that she said she would rather not. Then Mr. Petersen asked her if she would take a second mortgage [710]*710subject to $6,000 on the entire one hundred and sixty acres, on the hundred acres that he already owned and the sixty acres that he was buying. Mrs. Mueller asked my advice concerning this transaction. I told her I would not consider doing that if I were her. Then she told me she had already informed Mr. Petersen she would make this kind of a deal with him. Of course, there was nothing further for me to advise her since she had already agreed to make the transaction. That was about all of the conversation.”

The witness further testified that the $7,000 mortgage of Earl R. Petersen and his wife, Olive A. Petersen, to Emma L. Mueller, dated March 1, 1930', was drawn up in his bank and their signatures were witnessed by him and he took their acknowledgment as a notary public in the bank on that day; that on the same day he witnessed the signature of Emma L.

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Cite This Page — Counsel Stack

Bluebook (online)
269 N.W. 811, 131 Neb. 706, 1936 Neb. LEXIS 275, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reitz-v-petersen-neb-1936.