Dormitzer v. German Sav. & Loan Soc.

• Decision Date: 07 November 1900
• Citation: 23 Wash. 132,62 P. 862
• Court: Washington Supreme Court
• Parties: DORMITZER et al. v. GERMAN SAVINGS & LOAN SOC. et al.

62 P. 862

23 Wash. 132

DORMITZER et al. v. GERMAN SAVINGS & LOAN SOC. et al.

Supreme Court of Washington

November 7, 1900

Appeal from superior court, Spokane county; William E. Richardson Judge.

Suit by Dora May Dormitzer and another against the German Savings &amp Loan Society and others to set aside the release of a mortgage, and to foreclose the mortgage, and for other and further relief. From a decree in favor of the defendants plaintiffs appeal. Reversed.

Anders and Fullerton, JJ., dissenting.

Nash & Nash, W. A. Lewis, and William M. Murray, for appellants.

Happy & Hindman and Struve, Allen, Hughes & McMicken, for respondents.

WHITE J.

The issues tried in the court below are set forth in the respondents' brief, which, for convenience, we accept as a substantial statement of the same, and were as follows:

The plaintiffs, Dora May Dormitzer and William L. Tull, filed their complaint in the action on the ___ day of April, 1897, making the respondent the German Savings & Loan Society, together with F. M. Tull, P. D. Tull individually and as guardian of Ernest B. Tull, and Ernest B. Tull, a minor, and others, defendants. The complaint sets out two causes of action.

The first cause, omitting the formal part, alleges: That the plaintiffs and the minor defendant, Ernest B. Tull, are the children of F. M. Tull. That on the 3d day of July, 1888, the defendant P. D. Tull petitioned the probate court of Spokane county to be appointed guardian of the person and estate of the said minor children, and that on the 24th day of that month said P. D. Tull was appointed their guardian, and he thereupon assumed, and has ever since assumed, to exercise the duties of guardian for them, and that at the time of his appointment as such guardian Dora May was 10 years of age William L. 14, and Ernest B. 5 years of age, and all of them resided with their father, and that P. D. Tull is a brother of F. M. Tull. That on the 1st day of March, 1880, said F. M. Tull made, executed, and delivered to P. D. Tull, as said guardian, his promissory note for the sum of $14,000, due five years after date, with interest at 10 per cent. per annum, and secured the same by a mortgage to said guardian of even date therewith, upon the property described in said cause of action, which mortgage was filed for record on the 8th day of March, 1889. That on the 7th day of September, 1889, the said guardian released and satisfied said mortgage, which release was filed for record on the 11th day of September, 1889. That the release of the said mortgage by said guardian was executed without any order or judgment of the court authorizing him to execute the same, and without bringing the same to the attention or knowledge of the probate court, and was made without the payment of the debt secured thereby, and that the same is undischarged and unsatisfied. That said release and satisfaction was made in pursuance of a conspiracy made and entered into by the defendants F. M. Tull, P. D. Tull, and the German Savings & Loan Society, some time in the year 1888, with the fraudulent intent, among others, to cheat and defraud these plaintiffs and their brother. That on the 18th day of July, 1888, the plaintiffs and defendant Ernest B. Tull were the owners and seised in fee simple of the property described in said mortgage. That P. D. Tull and F. M. Tull then and there conspired together for the purpose of cheating the plaintiffs and their brother Ernest B. Tull out of the said real estate, procuring the appointment of the said P. D. Tull as guardian, and by the filing of a petition in the probate court of Spokane county, falsely alleging that it would be beneficial to the plaintiffs and their brother to sell the interest in real estate above mentioned. That in pursuance of the said petition, and influenced thereby, and acting upon the same, said probate court ordered and decreed that the guardian sell said property for cash, to the highest bidder at public sale, which order was made on the 3d day of September, 1888, and pursuant to said order said guardian did sell said real estate on the 26th day of November, 1888, to F. M. Tull, and reported said sale to the court, which report was approved by the court on the 27th day of November, 1888. That P. D. Tull, as guardian, made, executed, and delivered to F. M. Tull a guardian's deed, purporting to convey thereby to F. M. Tull all the right, title, and interest of the said plaintiffs and their brother in and to said real estate, which deed was filed in the auditor's office on the 30th day of November, 1888, and recorded December 1, 1888. That said sale was not for cash, or for any consideration passing at that time, or at the time said deed was executed. That all the proceedings taken in said case, and proceedings relative to the sale of said property, were brought about by the defendants F. M. Tull and P. D. Tull, for the purposes and object, among others, of securing to F. M. Tull the whole estate and undivided title and interest in and to the real estate, and for the purpose of cheating and defrauding plaintiffs and defendant Ernest B. Tull. That the purchase price of $14,000, the purported consideration for said real estate, was grossly inadequate, and that at the date of the said transaction the interest of the plaintiffs and their brother was worth $35,000 and upwards. That 20 days after said guardian's deed was filed said F. M. Tull mortgaged said real estate to the German Savings & Loan Society, to secure F. M. Tull's promissory note of $40,000, which mortgage was executed by F. M. Tull on the 6th day of December, 1888, and filed in the auditor's office on the 21st day of January, 1889. That the said mortgage had been negotiated, and its terms and conditions had been agreed and determined upon, by the parties previous to the said guardian's proceedings. That previous to the 1st day of August, 1888, the date when P. D. Tull, as guardian, filed his petition to sell said real estate, the German Savings & Loan Society knew the condition of the said property, and all about the title to the same, and that the guardianship proceedings aforesaid were arranged, conceived, and all such details were settled and agreed upon, by F. M. and P. D. Tull and their attorneys, and the German Savings & Loan Society and its attorneys, and that the attorneys of these several defendants jointly drew up and indited the various petitions and orders drawn up and presented in said case No. 219. That the German Savings & Loan Society, at the time of the execution of the guardian's deed, and in all the proceedings leading up thereto, knew that plaintiffs' and their brother's interest in said property was worth the sum of $35,000 and upwards, and that the decree authorizing said sale was a subterfuge arranged by F. M. Tull for his own benefit and advantage. That, when said guardian's sale was reported to have been made for cash, the German Savings & Loan Society knew that said report was false, and that said sale was not for cash or anything of value, and that said report was made by said guardian, was false and fraudulent, and, as a part of the fraudulent purpose of F. M. Tull, said order of sale and guardian's deed were procured in order to allow F. M. Tull to mortgage said real estate, for his own benefit and advantage, to the German Savings & Loan Society for $40,000. That on the 7th day of March, 1889, the guardian, P. D. Tull, reported to the probate court that he had invested the proceeds of said sale in the notes of F. M. Tull dated March 1, 1889, and secured by a mortgage on real estate, which is the same note and mortgage heretofore mentioned. That the said report of the guardian committed a fraud upon said court and plaintiffs, and that he did not state in said report whether the said mortgage was a first or second mortgage on said real estate, when in truth and in fact said mortgage was a second mortgage on said real estate, to wit, second to the mortgage of $40,000 held by the German Savings & Loan Society, and said society knew that the said guardian had perpertrated said fraud upon the court and plaintiffs. That on the 5th day of November, 1889, the said the German Savings & Loan Society released said $40,000, and said release was filed on the 11th day of November, 1889. That on the 26th day of October, 1889, F. M. Tull gave to the German Savings & Loan Society a mortgage on said property to secure his promissory note for $50,000, which was recorded on the 25th day of November, 1889. That on the 13th day of May, 1892, said $50,000 was duly and regularly released by a release deed filed May 20, 1892. That on the 6th day of May, 1892, F. M. Tull mortgaged the real estate above described, and other real estate, to the German Savings & Loan Society, to secure F. M. Tull's note for $100,000, which mortgage was recorded in the auditor's office of Spokane county; which mortgage was thereafter foreclosed by the German Savings & Loan Society, and, under and by virtue of a deed executed in pursuance of said foreclosure proceeding, said the German Savings & Loan Society claimed to be the owner of the said real estate. That said guardian made no reports or entered and account as such guardian after December 10, 1889. That in the guardian's petition in case No. 219, filed August 1, 1888, the defendant P. D. Tull, as guardian, described and mentioned said real property of the plaintiffs and their brother, and alleged that said property was mortgaged for $20,000, which was false. That there was no mortgage on said property, and the German Savings & Loan Society knew that fact. That the said property mentioned, and the real estate described herein, was fraudulently sold and disposed of to the German Savings & Loan Society, and which sale is made...