Am. Bldg. & Loan Ass'n v. Stoneman

• Citation: 54 N.W. 1115,53 Minn. 212
• Court: Supreme Court of Minnesota (US)
• Decision Date: 09 May 1893
• Parties: AMERICAN BLDG. & LOAN ASS'N v STONEMAN ET AL.

53 Minn. 212

54 N.W. 1115

AMERICAN BLDG. & LOAN ASS'NvSTONEMAN ET AL.

Supreme Court of Minnesota.

May 9, 1893.

(Syllabus by the Court.)

1. Rule applied that, as against strangers to it, a judgment is evidence only of its own existence, and not of any of the facts upon which its recovery was based.

2. Association v. Waleen, (Minn.) 53 N.W. Rep. 867, followed, to the effect that if a mortgagee, holding a bond of mere indemnity against paramount liens, has foreclosed, and bid in the mortgaged premises for the full amount of his debt, he has no cause of action on the bond.

Appeal from district court, Hennepin county; Lochren, Judge.

Action on a bond by the American Building & Loan Association against Orville A. Stoneman and others. From an order sustaining a demurrer to his answer, defendant H. B. Latham appeals. Reversed.

I. A. Barnes and Savage & Purdy, for appellant.

C. M. Cooley and Rea & Hubachek, for respondent.

MITCHELL, J.

This was an action upon a bond in all respects substantially the same as those recently considered by this court in Loan Co. v. Bartsch, 53 N. W. Rep. 764, and in Association v. Waleen, Id. 867. This appeal is from an order sustaining a demurrer to the answer of defendant Latham, who was one of the sureties on the bond. Under the familiar rule that a demurrer reaches back to the first defective pleading, this demurrer should have been overruled, for the reason that the complaint does not state a cause of action. It has been decided, in the cases already cited, that a bond like this is merely one of indemnity against paramount mechanics' liens. It was therefore incumbent on the plaintiff to allege facts showing that there were such liens, and that he was damnified thereby. All that the complaint alleges in that respect is that certain parties flied statements of account, in which they claimed such liens on the premises; that subsequently one of them brought an action to enforce his lien, to which the other lien claimants, the mortgagor, and this plaintiff, the mortgagee, were made or became parties defendants, and in which judgment was duly rendered adjudging that such claimants had liens on the premises superior to the lien of plaintiff's mortgage. But Latham was no party to that action, and there is no allegation that any notice was given him of its pendency, or that plaintiff ever called on him to assume its defense. The judgment was therefore, as to defendant, res acta inter alios, and evidence only of the...