Eynon v. Thompson

Decision Date29 October 1921
PartiesEYNON v. THOMPSON et al. (BEISEKER, Intervener.)
CourtNorth Dakota Supreme Court
OPINION TEXT STARTS HERE
Syllabus by the Court.

Where a mortgage is given by one in possession of realty under an agreement with a guardian of an estate to sell and to deliver title through a judicial sale, and where, thereafter, pursuant to the agreement, a guardian's sale is held, and a guardian's deed is issued to one who is entitled to retain title as trustee of the mortgagor for advances made prior to the execution of the mortgage, it is held that the prior recording of the mortgage did not establish precedence, under the recording statutes, to the title and lien of the trustee.

Appeal from District Court, Wells County; Coffey, Judge.

Action by A. W. Eynon against Bessie Thompson and others to foreclose a mortgage, in which T. L. Beiseker intervened. Judgment for plaintiff, and the intervener appeals. Judgment modified.John A. Layne and Arthur L. Netcher, both of Fessenden, for intervener.

B. F. Whipple, of Fessenden, and John O. Hanchett, of Valley City, for respondent.

BRONSON, J.

Statement.-This is an action to foreclose a mortgage. The intervener has appealed from a judgment in favor of the plaintiff, and demands a trial de novo. The facts disclosed by the evidence are as follows: One Norton, an incompetent under guardianship, was the owner of three vacant lots in the town of Chaseley. The guardian testified that he first had a talk with defendant Thompson, one Sheppard and one Knoble about purchasing these three lots. They wanted to build upon the lots. He made a price of $250 for the lots. They told him the money would be deposited at the bank of the defendant Swanson. He told them that he would guarantee a deed, so they proceeded to build. Thompson built a hotel and garage upon the west 25 feet of the lots in 1916. The plaintiff, Eynon, testified that the bank, of which he was formerly president, loaned to the defendants, Mrs. Thompson and Mr. Thompson, her husband, $300 on October 3, 1916, upon a note and mortgage covering the entire three lots executed by Bessie Thompson and J. H. Thompson, her husband, defendants. Then they were occupying the hotel building and in possession of the property. They represented that the lots were paid, and there was nothing against the property; that it was in the hands of an estate, and they would not get a deed until that fall or later. He further testified: That, during the following week, he talked with the defendant Swanson about this property and the mortgage. That Swanson stated that he had a plain note against Thompson, and wanted Eynon to protect it. Later, when the guardian's sale of this property was being advertised, he saw Swanson. Swanson said he intended to bid in the property. That he agreed that if Eynon would not appear at the sale, he would take up the mortgage. Further, he testified that he knew before the loan was made that Sheppard was in possession of a portion of these lots and had buildings thereon. Also Knoble was in possession with a building thereon. That he never had any intention of bidding in Knoble's and Sheppard's portions of the lots. That he became owner of the note and mortgage, and Swanson subsequently refused to pay the same.

On February 25, 1916, the guardian made a written agreement with Swanson to deliver a warranty deed covering the lots for a consideration of $250. He further testified: He had no talk with Thompson concerning how much of the lot he should have. That the talk between him and Swanson was that Swanson should bid in the lots himself for the parties to whom he had sold them. That the buildings on the lots were completed before the sale proceedings were finished. That before the deed was issued Swanson stated he would pay the Eynon mortgage. Swanson testified that he had been cashier of the Chaseley State Bank. That prior to the execution of the written agreement with the guardian he had a talk with Sheppard. He then determined to purchase these three lots. The talk was had with Thompson after the time of the written agreement. Previously, he had agreed to deed a portion of the lots to Sheppard, and another to Knoble, and to reserve the west 25 feet for himself. Then he talked with Thompson. He wanted him to build a hotel on the west 25 feet. Thompson did not have enough money. The agreement was made that Thompson should pay enough money to invest in the lot, and the bank would finance him, holding the lot and hotel as security. That these deals concerning the lots were made to help build up the town. That Thompson paid for his portion of the lot $75.00. Sheppard and Knoble around $80.00. That Thompson proceeded to build the hotel. The bank financed him, furnishing $975 in various items, between March 18 and July 24, 1916, evidenced by notes maturing October 1, 1916. This portion of the lot after construction of the hotel buildings was worth about $1,500 or $1,600. On October 3, 1916, Thompson renewed these notes by a new note for $975, and upon the next day left town. That he made these advances,being assured through the written agreement of the guardian. That he first learned, concerning plaintiff's mortgage, through the weekly commercial report of mortgages on record. That he made the arrangements with the guardian about the sale. That he had no talk with Eynon about his not bidding upon the lots. That he did not agree to pay the mortgage. That he did tell him that they would take no action on their claim without first taking it up with him so that he would have a chance to protect himself. The bank's claim for $975 is now held by the intervener, who together with Swanson in an answer and counterclaim, asserts the validity of Swanson's legal title for purposes of the claim concerned over plaintiff's mortgage. Plaintiff's mortgage was recorded October 4, 1916. The guardian's deed is dated March 9, 1917, and was recorded May 8, 1917. It recites therein the making of an order authorizing private sale dated October 24, 1916, the holding of the sale on November 27, 1916, and the offering of the property in separate parcels and the order...

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3 cases
  • Magnuson v. Breher
    • United States
    • North Dakota Supreme Court
    • March 20, 1939
    ... ... subsequent purchasers or encumbrancers, not to create rights ... not possessed, either of record or in fact. Eynon v ... Thompson, 48 N.D. 390, 184 N.W. 878 ...          Chapter ... 153, supra, is entitled "An Act to provide that real ... estate [69 ... ...
  • Magnuson v. Breher
    • United States
    • North Dakota Supreme Court
    • March 20, 1939
    ...as against subsequent purchasers or encumbrancers, not to create rights not possessed, either of record or in fact. Eynon v. Thompson, 48 N.D. 390, 184 N.W. 878. [5][6] Chapter 153, supra, is entitled “An Act to provide that real estate mortgages not renewed or extended of record within 15 ......
  • Welsch v. Lee, 152.
    • United States
    • U.S. District Court — District of North Dakota
    • February 21, 1941
    ...as against subsequent purchasers or encumbrancers, not to create rights not possessed, either of record or in fact. Eynon v. Thompson, 48 N.D. 390, 184 N.W. 878." Magnuson v. Breher, 69 N.D. 197, 284 N.W. 853, In the instant case the defendants had actual knowledge of the existence of the m......

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