Carlton v. Hulett
| Decision Date | 11 April 1892 |
| Citation | 49 Minn. 308 |
| Parties | ISABELLA J. CARLTON <I>vs.</I> NEHEMIAH HULETT. |
| Court | Minnesota Supreme Court |
On February 14, 1874, Webster M. Carlton, since deceased, was the husband of the plaintiff, Isabella J. Carlton, and owned the north half of the southwest quarter of section five, (5,) in Township forty-eight (48) north, of Range fifteen (15) west, in St. Louis County, and thirteen lots fronting on Third street, in the Village of Fond du Lac, in that county. There was a dwelling house on one of the lots, and he and his family resided in it. The trial court found that he was then sick, and had been confined to his house all the winter; that he was poor, and had difficulty in procuring the necessaries of life; that there was then a past-due mortgage on all his real estate; that it and unpaid taxes amounted to $475. Defendant then was, and long had been, Treasurer of St. Louis County, and was often consulted by Carlton and wife regarding their business matters. They requested him to assist them in obtaining a loan of money to pay the mortgage and taxes. He thereupon offered to loan them the money, and stated to them that it was his custom to require a person obtaining a loan of money from him to buy of him some town lots, and include the price in the mortgage he took as security. He stated to plaintiff and her husband that he had a good tax title to ten lots on Minnesota Point, and that he would convey them by quitclaim deed to the husband for $200, and include the price in the mortgage; that the lots were worth that sum, and were increasing in value. Carlton and his wife believed and relied upon Hulett's statements, and were thereby induced to give him a mortgage on all their real estate for $675, due $300 on August 14, 1875, and the balance in three years with interest annually at the rate of twelve per cent. He gave Mr. Carlton a quitclaim deed of the lots, and promised to pay the prior mortgage and taxes on their property. He had just prior to this bought of one Thomas, the holder, the prior mortgage, at a discount of $58, which fact he concealed from the Carltons.
Defendant had no valid title to the lots on Minnesota Point. He only had a tax deed of them, which was void on its face. This court, in 1869, held a similar tax title invalid, in Greve v. Coffin, 14 Minn. 345, (Gil. 263,) and he knew of it. With perfect marketable title the ten lots were then worth no more than $50. There was no market for them, nor were they rising in value, and defendant then knew these facts.
In May, 1877, defendant foreclosed the mortgage under the power of sale therein, and bid in the property at the sale for the sum due on the mortgage and costs and taxes. Twelve months passed, but no redemption was made. Webster M. Carlton died testate, August 29, 1879, and his will was admitted to probate on April 21, 1890. By it he devised and bequeathed all his property to the plaintiff, his widow, and appointed her sole executrix. She first discovered in January, 1890, that her title to the ten lots on Minnesota Point was invalid and worthless. By this action she asked that the mortgage and its foreclosure be adjudged fraudulent and invalid, and that they be canceled; that defendant account for the value of any part of the property sold by him; and that it be applied in payment of the money actually advanced by him to her husband; and for such other relief as should seem to the court equitable. Defendant denied the fraud and misrepresentations, and pleaded the statute of limitation of actions.
The trial occurred June 22, 1891. Six questions were submitted to a jury. The fourth, fifth, and sixth were as follows. The fourth and sixth were answered "Yes," the fifth was answered "No," by the jury.
4. Did the defendant, at the time of the delivery of the deed for the Minnesota Point lots, represent to the [husband of] plaintiff that the quitclaim deed conveyed a good title to said lots, and that such title was worth the sum of $200?
5. Were the representations of the defendant that the quitclaim deed for the lots conveyed a good title, and worth $200, true?
6. Did the plaintiff, [and her husband] at the time of executing the mortgage, rely on the representations of the defendant as to the title and value of the lots on Minnesota Point?
After the verdict on these questions was returned, the court heard further evidence, and found that Webster M. Carlton did not have notice in his lifetime that defendant had no title to the Minnesota Point lots, and further found that plaintiff did not have notice thereof until 1890, and directed judgment that the mortgage and its record and all proceedings under it were null and void, and that plaintiff is the owner of the property described in it. Defendant moved for a new trial, and, being denied, appealed.
Roger S. Powell, for appellant.
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Douglas & Davis and J. W. Bull, for respondent.
Counsel for appellant has argued quite a number of assignments of error, but aside from one, which is sustained, in so far as may be requisite in order for this court to direct a modification of the conclusion of law of the court below, they really need no special consideration. This one is the assignment which questions the principal finding of fact, as unsupported by the evidence. This finding was based upon the answers returned by a jury to certain specific questions of fact, which answers were, in effect, that when conveying the ten (10) lots on Minnesota Point to Mrs. Carlton, the defendant falsely and fraudulently stated and represented to her and to her husband, since deceased, that he had good title to all of said lots, which title was worth the sum of $200; that both plaintiff and her said husband believed and relied upon the statements and representations, and were thereby induced to and did accept from defendant his quitclaim deed to the lots, in lieu of $200 in money, when executing and delivering the mortgage in question upon certain real estate, including their homestead. From other findings, which we regard as sustained by the testimony, it appears that plaintiff and her husband were residing upon the property in question in the month of February, 1874. Mr. Carlton was sick, and had been disabled for about one year, most of the time confined to his house and bed. The family, a husband, wife, and a small child was in straitened circumstances, had great difficulty in obtaining the necessaries of life, and plaintiff was obliged to nurse and care for her husband both day and night. She was in great distress of mind and body, and pregnant, giving birth to a child in the spring of that year. There were an unpaid and past-due mortgage and unpaid taxes resting upon the land, amounting in all to about $475. The defendant was the county treasurer, an old acquaintance, a frequent guest at their home, with whom plaintiff and her husband freely consulted concerning their business affairs, and in whom they seemed to have had implicit confidence. Just previous to February 14, 1874, Mr. Carlton, his residence being fifteen miles from the county seat, requested defendant to assist him in obtaining a loan of money sufficient in amount to pay said past-due mortgage and the unpaid taxes, the loan to be secured by a mortgage upon the same land, including the homestead. On February 14, 1874, defendant went to the residence of the Carltons, taking with him a notary public and the mortgage in question. He informed them that he had concluded to loan the money himself, but that it was his custom to require any person obtaining a loan to take some lots from him as part of the consideration of the mortgage to be given as security. He thereupon produced a quitclaim deed of the ten lots before mentioned, and made it a condition that they accept said deed in lieu of the sum of $200. The balance of the amount represented by the note, to secure which the mortgage was to be given, $475, was to be used by defendant in behalf of the Carltons in paying off the mortgage incumbrance then resting on the premises, the taxes, and contemplated insurance. As a matter of fact, unknown to the Carltons, the defendant had already procured an assignment of the unpaid mortgage at a discount of $58. He reserved the full amount due thereon out of the $475, using the balance, as agreed upon, for taxes and insurance upon the buildings.
It stands undisputed, then, that the sole consideration for the note and mortgage executed by the Carltons was the quitclaim deed, consideration fixed at $200, and $475 in cash, and out of this defendant made a profit of $58, as before stated. There was testimony sufficient to sustain plaintiff's contention, although the same was emphatically contradicted by defendant, that her husband, at first, refused to take any lots from defendant, as he had too much of that sort of property then on hand, and that he yielded to the imposed conditions only when he found that defendant persisted in them, and would not make a loan otherwise; and while the defendant denies this, as before stated, he admitted, upon cross-examination, that at the time of this transaction the Carltons had a large number of town lots, and, as he expressed it, were "land poor."
The defendant's mortgage was regularly foreclosed by advertisement in May, 1877, and at the sale he purchased the tracts of land. There was no redemption. Mr. Carlton died testate in August, 1879. His will, wherein plaintiff was duly named sole devisee, was duly probated and allowed in this state, April 21, 1890. Mrs. Carlton removed from the state in 1880, remaining absent about ten years. As a matter of...
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