Baart v. Martin

• Decision Date: 31 August 1906
• Docket Number: 14,709 - (94)
• Citation: 108 N.W. 945,99 Minn. 197
• Parties: P. A. BAART v. KATHERINE MARTIN and Others
• Court: Minnesota Supreme Court

108 N.W. 945

99 Minn. 197

P. A. BAART v. KATHERINE MARTIN and Others

Nos. 14,709 - (94)

Supreme Court of Minnesota

August 31, 1906

Appeals by defendants John Carl and Josephine Carl, and intervenor, Clarence H. Deane, from an order of the district court for Hennepin county, Brooks, J., denying their separate motions to amend and make new findings of fact and strike out and add conclusions of law, or for a new trial. Affirmed.

On September 27, 1897, Katherine Martin and Michael Martin made their promissory note, whereby they promised to pay to Casper Ernst, or order, $1,850, on September 27, 1900. To secure the payment of this note, the Martins executed and delivered to Ernst a first mortgage on lot 1, block 4, in Morrison's addition to Minneapolis.

The mortgage was recorded in the office of the register of deeds for Hennepin county on November 2, 1897. The note and mortgage were assigned by Ernst to the respondent, Baart, and the assignment was duly recorded in the office of the register of deeds on August 27, 1898. The papers were thereafter in the respondent's possession at his home in Michigan until the commencement of this action. The time of payment was extended, and the interest on the note was regularly paid to respondent up to September 27, 1903. The respondent has resided at Marshall, state of Michigan, since 1883.

On January 31, 1899, Casper Ernst, or some person in his behalf forged respondent's name to a power of attorney to A Mueller, an employee of Ernst, purporting to authorize Mueller to foreclose the Martin mortgage. Acting under this forged power of attorney, Mueller went through the form of foreclosing the mortgage because of an alleged default in the payment of interest, amounting to $74, due on September 27 1898. At the sale on March 22, 1899, the property was bid in in the name of respondent for $2,102.82. At the time of the alleged foreclosure there was no default in the mortgage. Respondent had no notice or knowledge of the power of attorney or the attempted foreclosure until November 15, 1903. On March 21, 1901, Casper Ernst, or some person in his behalf, forged respondent's name to a deed purporting to convey said land to appellant John Carl. Respondent had no notice or knowledge of the existence of this forged deed until November, 1903. In November, 1903, respondent, being then in Minneapolis, arranged with McGowan & Mahoney, of Minneapolis, to look after his matters, including this mortgage, and through them he sent a letter to appellant John Carl, on November 21, 1903. Shortly after this letter was sent, Carl called at McGowan & Mahoney's office and had a conversation with McGowan, in which he said that he had come in response to that letter. McGowan told him they held the Baart mortgage, and that the interest would be payable at their office. Carl was there some time engaged in conversation with McGowan. He appeared nervous and worried over this mortgage. Carl applied to the Minnesota Title Insurance & Trust Company, and obtained a policy of title insurance on said lot for $2,500, dated December 5, 1903. On December 15, 1903, he made and verified his application in writing to have the title to the lot registered under the Torrens law. The application was filed in the office of the clerk of the district court for Hennepin county on January 23, 1904, and in the office of the register of deeds on January 25, 1904. On January 29, 1904, the application was referred to an examiner, who reported an unincumbered fee title in Carl. The respondent had no knowledge of the pendency of registration proceedings.

This action to foreclose said mortgage was commenced January 2, 1904, and the summons and complaint were served upon Carl and his wife on February 7, 1904. Carl took the summons and complaint so served upon him to the Minnesota Title Insurance & Trust Company on February 18, and made a claim on account of said policy of insurance. The company turned the summons and complaint over to its attorneys, and they prepared the answer to the complaint for Carl and wife. Respondent made his reply thereto, dated March 21, 1904. A notice of lis pendens in the foreclosure suit was filed in the office of the register of deeds on March 3, 1904. March 5, 1904, Carl elected to proceed with his registration proceedings, and the summons was issued in accordance with the examiner's report, and served and published. The respondent, Baart, was not named, but the usual reference was made to persons unknown. The proceedings for registration came before the court for hearing on May 10, 1904. There was no defense, and, on May 11, 1904, a decree was made and the title registered in John Carl as the owner in fee. On September 22, thereafter, Carl deeded the land to the intervenor, Deane. Carl's owner's duplicate certificate was surrendered and the lot was registered in the name of Deane.

The trial court found:

"(a) That as soon as said plaintiff received notice of said forged power of attorney and need and said power of attorney and deed and said unauthorized foreclosure, he caused notice of the facts aforesaid to be given to said John Carl. And ever since December 1, 1903, said John Carl has at all times had full notice and knowledge of the plaintiff's name and address and of all facts hereinbefore set forth, and that said plaintiff had and owned an unsatisfied first lien upon said premises under and by virtue of said mortgage, to secure said sum of $1,850, with interest thereon, together with the sum paid for insurance as hereinbefore set forth, and that neither said forged deed, or any other paper or writing pertaining to said unauthorized foreclosure, was lawfully of record, and that eliminating such writings, theretofore unlawfully and wrongfully placed of record, said defendants Martin appeared of record to be, as they in fact were, the owners of the fee of said land, and that said plaintiff appeared also of record to be, and was in fact, the owner and the holder of a lien upon said land, unsatisfied and undischarged as hereinbefore stated and shown.

"(b) That immediately upon so receiving notice and knowledge of the facts aforesaid, said John Carl obtained from the Minnesota Title Insurance & Trust Co., a corporation doing business in the city of Minneapolis in said county, its policy or contract of insurance, wherein and whereby said company promised and agreed to pay to said John Carl the sum of $2,500, in case his title to said land should prove to be defective and he be ejected therefore.

"(c) That thereupon said John Carl, with full notice and knowledge of all the facts aforesaid, sought to secure a registration of his title, under and pursuant to the provisions of chapter 237 of the Laws of 1901, and acts amendatory thereof, and with intent to defraud said plaintiff of his said mortgage lien, sought to obtain such registration in such manner that no notice of the proceedings theretofore should be given to or received by said plaintiff until more than sixty days should elapse after the entry of the decree therein. And with such intent, and having such purpose in view, said John Carl on January 23, 1904, made application to this court to have the title to said land registered, which application was made in writing, was signed and verified by the oath of said John Carl as applicant, and was filed with the clerk of this court on the day last stated; a duplicate thereof being also, upon the same day, filed in the office of the register of deeds. That although when said John Carl, as such applicant, verified and filed such application, he was fully advised of all the facts above stated, he omitted to make any reference therein to plaintiff's said mortgage, or to his lien upon said premises existing by reason thereof, and, on the contrary, falsely and corruptly averred in said application that he was the owner in fee of said premises; that no person except himself appeared of record to have any title, claim, estate, lien, or interest, in, to, or upon said premises; that the same were not subject to any lien or incumbrance; and that no person except himself had any estate or claimed any interest therein or thereto.

"(d) That thereupon said plaintiff, having no knowledge of the pendency of said registration proceedings, or any notice thereof, except such constructive notice, if any, as should be implied from the fact that a duplicate copy of said Carl's application therein was on file in the office of the said register of deeds, brought this action; the summons and complaint therein being personally served upon said defendants Carl early in the month of February, 1904, and being thereupon, and on the 18th day of said month delivered by Carl to his attorneys herein, who were and are also attorneys for the said Title Insurance & Trust Company. And on March 4, 1904, said plaintiff duly filed in the office of said register of deeds a notice of the pendency of this action.

"(e) That because of the false and corrupt statements of fact set forth in said application of said John Carl, hereinbefore mentioned, and not otherwise, the examiner of titles, by his report in said proceedings, made pursuant to section 17, of said chapter 237, did not, as he would have otherwise done, make report that said applicant had no title proper for registration, but did, on the contrary, report that said Carl had title in fee to said premises, free and clear of any incumbrance whatsoever, and did not, as he would otherwise have done, make report that said plaintiff should be made a party defendant therein.

"(f) That on March 5, 1904, said John Carl caused to be filed in said registration proceedings an affidavit of his attorney therein, praying that a summons might issue in said matter and caused it to be falsely stated and set forth in...