Berkman v. Weckerling

• Court: Minnesota Supreme Court
• Writing for the Court: FRANK T. GALLAGHER
• Citation: Berkman v. Weckerling, 247 Minn. 277, 77 N.W.2d 291 (Minn. 1956)
• Decision Date: 11 May 1956
• Docket Number: Nos. 36569--36571,s. 36569--36571
• Parties: Robert BERKMAN, Appellant, v. O. F. WECKERLING, Respondent.

Page 291

77 N.W.2d 291

247 Minn. 277

Robert BERKMAN, Appellant, v. O. F. WECKERLING, Respondent.

Nos. 36569--36571.

Supreme Court of Minnesota.

May 11, 1956.

Syllabus by the Court.

1. Where a particular mode of service is provided for by statute, if that mode of service is under the circumstances reasonable and appropriate to the case it is due process of law. It is a fundamental requirement of due process in any proceeding which is to be accorded finality that notice be given reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action to afford them opportunity to present their objections. Held under the facts and circumstances of this case the defendant should have taken further steps in commencing the actions which are here under attack.

2. An action brought under M.S.A. § 548.14 is equitable in its nature and governed by equitable principles. Under § 548.14 the right to have a judgment set aside is not an absolute one and it is the duty of the court to award such relief as the facts may require under the particular circumstances of each individual case. Held under the circumstances of this case the plaintiff is not entitled to have the judgments under attack set aside, and therefore the case is remanded for further proceedings in accordance with the opinion.

Robert Berkman, pro se.

McCabe, Clure, Van Evera & Donovan, Duluth, Wangensteen & Bangs, Chisholm, for respondent.

FRANK T. GALLAGHER, Justice.

Appeal from a judgment of the district court in favor of O. F. Weckerling, defendant, and against Robert Berkman, plaintiff. This is an action to vacate three judgments quieting title in defendant to certain properties located at Chisholm, Minnesota. It is alleged by plaintiff that these prior actions were entered without jurisdiction and were obtained by fraud in that plaintiff and his father, C. E. Berkman, were not named as parties in those actions.

The facts necessary to a determination of this case are as follows: The properties involved in these actions prior to 1936 were in the McNiven Land Company. All of the stock in this corporation was owned by J. H. McNiven. In that year J. H. McNiven moved from Chisholm, Minnesota, leaving the operation of the corporation in his brother, Walter McNiven.

It is alleged by the defendant in this action that in the same year and after J. H. McNiven moved from Chisholm he entered into an oral contract with Walter McNiven. Under this contract it is further alleged that Walter McNiven had agreed to convey all of the real property to which the McNiven Land Company had title. It is undisputed that in 1937 J. H. McNiven filed a petition in bankruptcy.

In 1939 the statutory life of the McNiven Land Company expired, and shortly after the expiration of this corporation C. E. Berkman purchased from the trustee in bankruptcy the 500 shares of stock of the McNiven Land Company owned by J. H. McNiven. This transaction was accomplished by a bill of sale running from the trustee in bankruptcy to C. E. Berkman. In December of 1942 C. E. Berkman assigned his interest in the stock to his son, Robert Berkman.

The record also shows that all of the lands involved have a long history of nonpayment of taxes. Some of these taxes were paid by C. E. Berkman after his purchase of the stock although the exact amount is disputed. The record further shows that C. E. Berkman had entered into a repurchase agreement ¹ with the county auditor on some of the lots in August 1939. By the terms of this agreement it was contemplated that the state would convey title to C. E. Berkman within ten years after the payment of the back taxes was completed and the current taxes were paid.

The record indicates that defendant had full knowledge of all the facts giving rise to Berkman's claimed interest in the property. There is considerable correspondence in the record during the years 1943 and 1944 between defendant's attorney and the Berkmans indicating that negotiations were in progress between the parties to either buy or sell the other's interest in all of the land involved.

Some time in 1944 two actions to quiet title to a considerable portion of this property were commenced by defendant. At that time service was made upon the McNiven Land Company by serving one Ernest Drew as secretary of the corporation. Later it was claimed by defendant that he had served Drew in reliance upon a statement by C. E. Berkman that Drew was secretary of the corporation. These actions were prosecuted to judgment.

Upon learning of this C. E. Berkman engaged and attorney to move that the judgments in those actions be vacated. After this motion was made there was more correspondence in the record between Berkmans and the attorney for defendant. The clear implication of this correspondence was to the effect that the parties would either get together and reach an amicable settlement or that the actions would be retried inasmuch as all concerned agreed that Drew was not the secretary of the corporation and that, therefore, no jurisdiction had been acquired over the McNiven Land Company. It must also be noted that in the pleadings of those two actions the name of C. E. Berkman was included as the controlling stockholder of the McNiven Land Company and it was alleged that as such he had attempted to deprive defendant of his property and to repudiate the title of defendant.

In 1945 defendant commenced three new actions to quiet title to all of the property now involved. In those actions service was made upon the corporation by serving the secretary of state of the State of Minnesota. Neither of the Berkmans were named as parties in the new actions nor were their names included any place in the pleadings. No notice of these actions was ever given to the Berkmans.

In February of 1946 the Berkmans, who were then living in California and whose address was fully known to both defendant and his attorney, returned to Minnesota for the purpose, according to them, of trying the first actions to quiet title on their merits. It was at this time that they discovered that three later actions to quiet title had been commenced and that judgment had been entered in each of those actions. Various motions were made after this to vacate those judgments, and an appeal was finally prosecuted to this court upon a denial of those motions and this court held in Weckerling v. McNiven Land Co., 231 Minn. 167, 42 N.W.2d 701, that the orders appealed from were not appealable.

At about this time the present action was commenced under M.S.A. § 548.14. The district court concluded that it had jurisdiction in the three latest actions to quiet title; that the judgments entered in those actions were valid and subsisting; that these judgments were not obtained by fraud and that the plaintiff's claim should be dismissed on its merits with prejudice. On appeal to this court the plaintiff claims that the district court erred (a) in not finding that he was entitled to notice in the actions quieting title to the land here involved and (b) in not finding the judgments null and void in those actions on the grounds that they were obtained without due process of law and by fraud.

1. The present issue for our consideration is whether the manner in which the second set of actions to quiet title were commenced and prosecuted was legally sufficient. In other words was the defendant in this action required to do more when he commenced the three new actions to quiet title.

At the time the latter actions were brought, the record title to the property was in the name of the McNiven Land Company. The corporation had expired in 1939. According to the general statute under which the corporation was organized, its corporate life was automatically extended for a period of three years for the purpose of winding up its affairs. ² Thus during this period there was in existence a corporation capable of prosecuting or defending actions. In 1941 the legislature passed, as it had in prior legislative sessions, a statute extending the period of life of expired corporations for the purpose of winding up their affairs for a further two-year period. L.1941, c. 128.

It is significant that in 1943 the legislature did not pass a law extending the life of expired corporations. However, in April 1945, the legislature again passed a law extending for a period of two years the life of corporations whose existence terminated on or before July 1, 1941, for the purpose of winding up its affairs. L.1945, c. 379. Thus there was a two-year period between 1943 and 1945 when there was no law extending the life of this corporation.

In May of 1945, about one month after the April 1945 legislative act was passed, the three new actions were commenced by the defendant to determine adverse claims of the land under consideration. Service of the McNiven Land Company in those actions was made under M.S.A.1949, § 543.08. The pertinent portion of that statute reads as follows:

'If the action be against a private domestic corporation, the summons may be served by delivering a copy thereof to its president, vice-president, secretary, cashier, or treasurer, or to any director or managing agent thereof.

'If such domestic corporation have no officer within the state upon whom service can be so made, of which fact the return of the sheriff that none can be found in his county shall be conclusive evidence, service of the summons upon it may be made by depositing two copies thereof with the secretary of state, which shall be deemed personal service upon such corporation. One of such copies shall be filed by such secretary, and the other forthwith mailed by him to the corporation, if the place of its main office be known to him or be disclosed by the files of his office.'

It is claimed by the plaintiff that bare compliance with the terms of that statute was a violation of due process and a fraud on the court or himself. In this connection the plaintiff...