Baldwin v. Burt

• Decision Date: 03 January 1895
• Citation: 43 Neb. 245,61 N.W. 601
• Parties: BALDWIN v. BURT ET AL.
• Court: Nebraska Supreme Court

43 Neb. 245

61 N.W. 601

BALDWIN

v.BURT ET AL.

Supreme Court of Nebraska.

Jan. 3, 1895.

Syllabus by the Court.

1. Courts have not attempted to define the precise degree of diligence essential in attempting to procure the primary evidence of a material fact in order to establish the foundation for secondary evidence. But it is sufficient, as a rule, if the party offering such proof has exhausted all of the sources and means of discovery which the nature of the case would suggest, and which are accessible to him.

2. Evidence examined, and held, that a sufficient foundation had been established for the admission of secondary evidence of the mortgage alleged in petition.

3. A conveyance or mortgage without consideration and in fraud of the rights of creditors cannot be assailed by one not prejudiced thereby. Such a contract is void as to creditors, but only so far as may be necessary for their protection. It is effective for all other purposes.

4. Where a claim to real estate can be sustained only on the ground that the party asserting it is a subsequent purchaser or mortgagee in good faith, such person is required to show affirmatively that he purchased without notice of the equities of the adverse party, relying upon the apparent ownership of his grantor or mortgagor.

5. An action by a subsequent mortgagee to enforce his equities as against the mortgagor and purchaser through a decree foreclosing the prior mortgage, to which he was not made a party, may be brought at any time within 10 years after the cause of action accrued.

6. The action in such a case is upon the mortgage, and is governed, as to the time of commencement, by the provisions of section 6 of the Code.

7. One who, in pleading, has stated a legal conclusion instead of a material fact, cannot object to a denial thereof in the same terms on the ground that it is a conclusion of law, and not an allegation of fact.

8. The plea nil debet under our system puts in issue no fact, and cannot be regarded as a defense. Accordingly, held, that an answer to a petition for foreclosure, denying “that there is anything due on the note and mortgage,” tenders no issue.

9. B. purchased property at judicial sale to satisfy a decree of foreclosure in his own favor. Subsequently the holder of a second mortgage, who had not been made a party to B.'s foreclosure proceedings, commenced an action for an accounting against the mortgagor, and for leave to redeem from B. The latter answered, alleging a former action by L. to foreclose the same mortgage; that he (B.) had filed an answer therein, alleging in substance that L., the plaintiff, was not the party in interest; that said mortgage was without consideration, and denying that there was any sum whatever due thereon,--whereupon “it was, upon the merits thereof, adjudged and decreed that said action be dismissed.” Held: (1) The plea of no consideration was not available to B., whose rights were acquired through the prior mortgage. (2) The allegation that there was nothing due on the mortgage was a mere conclusion, and presented no issue. (3) The allegation that L. was not the party in interest did not involve the merits of the cause, but the plaintiff's capacity to sue.

Appeal from district court, Douglas county; Irvine, Judge.

Action by Eunice Baldwin against Wellington R. Burt and others to assert rights under a mortgage. From a judgment in favor of defendants, plaintiff appeals. Reversed.Cavanagh, Thomas & McGilton and Ambrose & Duffie, for appellant.

Kennedy, Gilbert & Anderson, Montgomery, Charlton & Hall, Wharton & Baird, Meikle & Perley, A. C. Wakeley, J. L. Kaley, G. M. O'Brien, Curtis & Shields, Geo. E. Pritchett, J. W. Carr, Saunders & Macfarland, B. G. Burbank, Guy A. C. Read, John Q. Burgner, J. W. Carr, Bradley & De Lamatre, and A. J. & W. S. Poppleton, for appellees.

POST, J.

On the 4th day of May, 1875, John Gallagher executed in favor of the defendant Wellington R. Burt a mortgage, whereby he conveyed to the latter certain real estate in Douglas county, to secure an indebtedness of $20,000. On the 10th day of August, 1875, Matthew Baldwin, who had in the meantime acquired the title to said property by deed from Galligher, conveyed the same by mortgage to Morgan Baldwin, to secure payment of a note of even date therewith for $12,500, payable six years from date, with annual interest at 6 per cent. Said mortgage was executed in the state of Illinois, and acknowledged before Henry Wisner, who, according to the certificate attached thereto, was at said time a commissioner for the state of Nebraska. It appears also to have been filed for record with the county clerk of Douglas county on the 7th day of October, 1875. On the 12th day of August, 1876, proceedings were instituted in the district court of Douglas county by Burt, the defendant herein, for the foreclosure of the mortgage first above mentioned, without naming Morgan Baldwin, who still held the mortgage last described, as a defendant, and which resulted in a decree for the plaintiff in the sum of $22,938.76 and costs, taxed at $451.30. To satisfy said decree, the mortgaged property was sold to the plaintiff therein, Burt, and a deed therefor executed in due form by the sheriff, pursuant to an order of the court. On the 5th day of August, 1891, the plaintiff herein, who had acquired title to the mortgage executed by Matthew Baldwin through the will of the mortgagee, commenced this proceeding for the purpose of asserting her rights thereunder. The relief asked is: First, an accounting, and decree of foreclosure as against the mortgagor; and, second, the right to redeem as against Burt and the defendants (nearly 300 in number), who claim through him.

Owing to the voluminous character of the pleadings, which comprise 133 pages of typewritten matter, it is impracticable to give in this connection more than a brief summary of the issues thereby presented. The answers, after showing the interests of the several defendants as purchasers of mortgages, deny the execution of the mortgage alleged by the plaintiff in terms admitted to be sufficiently specific to put the latter upon her proof. It is in all of them alleged that in the year 1881 proceedings were instituted in the circuit court of the United States for the district of Nebraska by one Henry M. Lewis as plaintiff for the foreclosure of said pretended mortgage, in which Wellington R. Burt, who then held the property in controversy through the sheriff's deed herein mentioned, was made a defendant. That issue was joined by the answer of said Burt and the reply of the complainant, Lewis, and that on the 28th day of May, 1883, a decree was entered in favor of defendants therein upon the merits of the cause, and dismissing the bill of the complainant, at his costs. For a third defense it is alleged that, if such a mortgage was in fact executed by Matthew Baldwin, it was without any consideration whatever, and in pursuance of a corrupt and fraudulent purpose of the said Matthew and his father, Morgan Baldwin, to defraud the creditors of the former. A fourth defense is the statute of limitations. It is also, in most of the answers, alleged that the defendants therein named purchased in good faith, relying upon the title of Burt, without notice of the mortgage which is the subject of this action. The plaintiff, in reply, admits the bringing of the action in the circuit court, as above stated, but alleges that the note and mortgage in controversy had previously been assigned to Lewis, the plaintiff therein, in order to enable the latter to prosecute foreclosure proceedings in that court, and that she (the plaintiff) was at said time the real party in interest. She denied also that the decree of dismissal therein involved the merits of the cause, in terms to which reference will hereafter be made.

1. The first question to which we will give attention is presented by the ruling of the district court in rejecting as evidence a copy of the mortgage described in the petition. Matthew Baldwin, in his deposition, after stating that the mortgage was given as security for money advanced and paid for his benefit by his father, the mortgagee, testified further as follows: “Mr. Baldwin, you may examine the paper which I now show you, a copy of which is marked ‘Exhibit A,’ and attached hereto as a part of this interrogatory, and state whether you have ever seen it before, and what it is. A. I have seen the paper. I wrote it, and it is a note which I gave to my father, accompanying the mortgage, in Douglas county, Nebraska. Q. You may examine the paper which I now show you, which is attached hereto as a part of this interrogatory, and marked ‘Exhibit B,’ and state what said paper is. A. This is a copy of the mortgage which I gave father on lands in Douglas county, Nebraska. Q. Now, Mr. Baldwin, you may state when and where this note and mortgage were delivered to your father. A. They were delivered to father some time in August, 1875, at Flint, Michigan, at the house of Mr. A. C. Jackson.” In connection with the deposition containing the evidence quoted, the paper therein referred to as “Exhibit B” was offered in evidence, and received, subject to the objection that it was “incompetent, immaterial, and not the best evidence.” The deposition of A. C. Johnson was then read, from which it appears that the witness was for more than 40 years the legal adviser of the deceased, Morgan Baldwin, and since the death of the latter had stood in the same relation towards the plaintiff, his widow. He fully corroborates Matthew Baldwin in respect to the delivery of the note and mortgage. He further testifies that said mortgage was placed in his hands for safe-keeping in the year 1880, soon after the death of the said Morgan Baldwin; that he last saw it in the fall of 1882, when it was still in his possession; and that he had never surrendered possession thereof to any person, although he is now unable to find it, after the...