Casper National Bank v. Swanson

• Decision Date: 23 September 1930
• Docket Number: 1623
• Citation: 291 P. 812,42 Wyo. 113
• Parties: CASPER NATIONAL BANK v. SWANSON, ET AL. [*]
• Court: Wyoming Supreme Court

291 P. 812

42 Wyo. 113

CASPER NATIONAL BANK v. SWANSON, ET AL. ^[*]

No. 1623

Supreme Court of Wyoming

September 23, 1930

APPEAL from District Court, Natrona County; BRYANT S. CROMER, Judge.

Action by Casper National Bank as guardian of the estate of John M Crawford, an insane person, against Jessie Swanson and others. From a judgment for plaintiff, defendant Nebraska Central Building & Loan Association appeals. The material facts are stated in the opinion.

Affirmed.

For the appellant, there was a brief and an oral argument by Robert N. Ogden, Jr., of Casper, Wyoming.

The finding of the trial court that the improvements erected on the lots were for the most part paid for out of funds belonging to Crawford in the hands of defendant Fred Swanson as guardian is unsupported by the evidence; appellant was not a bona fide purchaser; the finding that none of the defendants are bona fide defendants is contrary to the evidence; appellant was justified in assuming that the court order of February 7, 1923, was valid. The reasons argued for its invalidity are technical. They were not recognized by the judge granting the order. A subsequent purchaser is not chargeable with notice where the grantees recorded deed, and possession give no indication of fraud. 27 C. J. 697. Ahrenberg v. Brown, (Md.) 139 A. 280. Crawford gave possession of the property to the Swansons while sane; at the time of the trial they had lived on the premises continually and to the exclusion of everyone else, for fourteen years such prior possession is sufficient evidence of title. Bentley v. Jenne, 33 Wyo. 1; Allen v. Houn, 30 Wyo. 186. A mortgagee of realty is a bona fide purchaser. Hays & Co. v. Pierson, 32 Wyo. 416; Kesner v. Trigg, 25 L.Ed. 83. Appellant was without notice sufficient to remove it from the status of a bona fide purchaser. The entire fund advanced by appellant was used to pay the cost of the building, taxes and insurance and it is entitled to compensation. 3 Freeman on Judgments, 5th Ed. pp. 2476, 2477; 31 C. J. 314, 315; Cowper v. Weaver, Admr., (Ky.) 69 L. R. A. 1; Re Hagadorn Co., 155 P. 381-385, 9 C. J. 1267; Harding v. Handy, 6 L.Ed. 429; Gates v. Cornett, (Mich.) 40 N.W. 740; 1 Pomeroy's Eq. Jr., 4th Ed. 722; Peck v. Dyer, (Ill.) 35 N.E. 479; Brooks v. Wertz, (Okla.) 160 P. 903. The court's findings as to improvement liens on lot 20 and the claim of Wyoming Trust Co., et al., are inconsistent with the general principle it followed as to lot 21. 21 C. J. 206-7. Plaintiff is estopped from denying validity of appellant's liens. Plaintiff and other interested parties acquiesed in the order made August 29, 1927. Poston v. Delfelder, 39 Wyo. 163; Ions v. Harbison, (Calif.) 44 P. 572. The jurisdiction of the District Court in probate matters conferred by Section 10, of Article V of the Constitution is not limited to such express functions as may be provided by the legislature. This case is appealed from the identical court which entered the guardianship orders.

For the respondent there was a brief and an oral argument by R. R. Rose, of Casper, Wyoming.

The District Court was without jurisdiction to make an order authorizing the guardian to transfer Crawford's title to Mrs. Swanson. 32 C. J. 715; Hamilton v. Traber, 27 A. 229, 44 A. S. R. 258; In Re Baltes, 64 N.Y.S. 613. Appellant acquired no interest in lot 21, or the improvements thereon by reason of its loans to Mrs. Swanson because, (a) it was not in the position of a bona fide occupying claimant within the terms of 6241-6251 C. S.; (b) the evidence fails to show that the money loaned by appellant was used in the construction of improvements on lot 21; (c) the evidence shows that the money loaned by appellant was used in the liquidation of a prior void mortgage, and an open account owed by Swanson to Nicolayson Lumber Company; (d) appellant had constructive notice that Mrs. Swanson's title to lot 21, was defective. 31 C. J. 317. Appellant is not entitled to subrogation. 31 C. J. 83; Armstrong v. Ashley, 22 App. (D. C.) 368; Wheeler v. Merriam, (Minn.) 15 N.W. 665. Appellant occupied no better position than the Swansons. 37 Cyc. 363; Hayden v. Hoff, 83 N.W. 920. The finding of the court as to the use of Crawford's money in the construction of improvements on lot 21 is supported by the evidence; appellant cannot claim right as an occupying claimant under Sec. 6241, C. S.; Preston v. Brown, 35 O. S. 18; Taylor v. Admr., 22 Ohio 255. Moreover it was shown that the value of the property had greatly depreciated on the date of trial and was less than the amount of Crawford's money which had entered into the improvements before the mortgage was given to the Wyoming National Bank. The fraud of Swanson and his wife was an open book and appellant was charged with notice thereof. Appellant is not entitled to relief under the occupying claimant's statute, nor to relief in equity. It has no standing under the rule of subrogation, since it could only be subrogated to the rights of the mortgagor, who as the court found, had no standing in equity. Someone must sustain a loss due to shrinkage in the value of the property. Shall it be Crawford, or this investment concern which loaned its money on a void title?

RINER, Justice. BLUME, C. J., and KIMBALL, J., concur.

OPINION

RINER, Justice.

The plaintiff and respondent, Casper National Bank, a corporation, as guardian of the Estate of John M. Crawford, an insane person, hereinafter designated as the "plaintiff," obtained a judgment in the District Court of Natrona County against the defendants Jessie Swanson, Fred Swanson, Nebraska Central Building and Loan Association, a corporation, Wyoming Trust Company, a corporation, and Leo A. Dunn. From that judgment the Nebraska Central Building and Loan Association alone has brought the cause here by direct appeal for review and will be subsequently mentioned herein as "appellant."

The facts leading up to this litigation are in brief as follows: In 1916 one John M. Crawford entered into a contract with J. M. Carey and Brother for the purchase of Lots 20 and 21 in Block 100 of the city of Casper, Wyoming, at the agreed price of $ 200 per lot. At that time the purchaser made a payment of $ 50 on each lot. Sometime during that year Jessie Swanson, Crawford's sister and the wife of Fred Swanson, about two or three weeks before he bought these lots, as she testified, loaned her brother the sum of $ 200, as "he wanted to invest something so he could get started." No note was given Mrs. Swanson--the only agreement on the part of Crawford being that he would "make it right; he would fix it up" by giving her the lots; that he would return the money or the lots. Further, as a witness on the trial, she stated that the lots were to be given her as security for the money, though there was no written agreement of any sort whatsoever in the matter and that her brother kept "putting it off"; also that on Lot 20 neither she nor her husband paid anything personally to J. M. Carey and Brother and that on Lot 21 she paid "one or two installments"--how much she did not remember.

In 1917 Crawford received a deed to Lot 20, recorded June 28, 1917. He remained in Casper until July, 1918, when he enlisted in the United States army. Prior to his departure he constructed a small frame two-room house on Lot 20 and lived there for some time, while the Swansons lived on Lot 21 in a covered wagon. Mrs. Swanson claims to have loaned her brother some small additional amounts "to fix up" the property he bought, though she was unable to state just how much these were. At the time Crawford enlisted, Lot 20 was renting for $ 20 a month and thereafter the entire property was left in charge of his sister by Crawford, and she continued to collect and retain the rentals until at least April, 1923. They seem never to have been accounted for. Although Mrs. Swanson knew that her brother had received a deed to Lot 20, and that he was leaving for military service, she never demanded that he transfer these lots to her. Sometime after he had entered the Government service, a deed was issued to Crawford for Lot 21.

During the course of his military service, Crawford became incurably insane and the subject of care in various Government hospitals. Compensation for both total disability and on account of War Risk Insurance, was awarded him by the Government, and the several payments accruing on account of these items were receipted for by Fred Swanson, who, upon his wife's application to the District Court of Natrona County, Wyoming, was, on September 26, 1919, appointed and duly qualified as guardian of Crawford, as an insane ward.

Commencing in May, 1922, Swanson began to improve the two lots in question, and, according to his testimony, placed on Lot 20 a house costing approximately $ 6500, and on Lot 21 a house and garage costing about $ 13,000. Until April 4, 1923, when it was closed, he kept an account as guardian of Crawford in the National Bank of Commerce and the Wyoming National Bank of Casper, Wyoming. Thereafter his banking account was maintained in his own name and in it he commingled his own funds obtained from his business as truck driver, loans that he obtained from the banks, and Government payments to him as Crawford's guardian. The money to finance the improvements, he drew from these several accounts as was necessary. It appears to be undisputed that at least $ 3,000 of the insane ward's funds were employed in the erection of the buildings placed on Lot 21. The record would perhaps justify the inference that more than this amount was used for that purpose, but in view of Swanson's methods of handling all funds which came into his hands, it is impossible to say how much this might be.

On February 9, 1923, as the improvements aforesaid...