Farm Credit Bank of St. Paul v. Brakke

• Decision Date: 23 March 1992
• Docket Number: Nos. 900417,910211 and 910212,s. 900417
• Citation: 483 N.W.2d 167
• Parties: FARM CREDIT BANK OF ST. PAUL, f/k/a Federal Land Bank of St. Paul, a federally chartered instrumentality of the United States, Plaintiff and Appellee, v. Chester A. BRAKKE and Alice Brakke, Defendants and Appellants. FARM CREDIT BANK OF ST. PAUL, f/k/a Federal Land Bank of St. Paul, a federally chartered instrumentality of the United States, and Kirk Cossette, Plaintiffs and Appellees, v. Chester A. BRAKKE, Alice Brakke, individually and as a trustee of Pioneer Life Trust, Nancy Bye, Ronald D. Brakke, individually and as a trustee of E.L. Price Trust, Pioneer Life Trust, Harold Bergman, individually and as a trustee of Common Title Bond & Trust, Common Title Bond & Trust, E.L. Price Trust, Elaine Price Trust, and E.L. Price Bank, Defendants, Alice Brakke, Defendant and Appellant. FARM CREDIT BANK OF ST. PAUL, f/k/a Federal Land Bank of St. Paul, a federally chartered instrumentality of the United States, and Kirk Cossette, Plaintiffs and Appellees, v. Chester A. BRAKKE, Alice Brakke, individually and as a trustee of Pioneer Life Trust, Nancy Bye, Ronald D. Brakke, individually and as a trustee of E.L. Price Trust, Pioneer Life Trust, Harold Bergman, individually and as a trustee of Common Title Bond & Trust, Common Title Bond & Trust, E.L. Price Trust, Elaine Price Trust, and E.L. Price Bank, Defendants. Ronald Brakke, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 167

483 N.W.2d 167

FARM CREDIT BANK OF ST. PAUL, f/k/a Federal Land Bank of St.

Paul, a federally chartered instrumentality of the

United States, Plaintiff and Appellee, v. Chester A. BRAKKE and Alice Brakke, Defendants and Appellants.

FARM CREDIT BANK OF ST. PAUL, f/k/a Federal Land Bank of St.

Paul, a federally chartered instrumentality of the

United States, and Kirk Cossette, Plaintiffs and Appellees, v. Chester A. BRAKKE, Alice Brakke, individually and as a

trustee of Pioneer Life Trust, Nancy Bye, Ronald D. Brakke,

individually and as a trustee of E.L. Price Trust, Pioneer

Life Trust, Harold Bergman, individually and as a trustee of

Common Title Bond & Trust, Common Title Bond & Trust, E.L.

Price Trust, Elaine Price Trust, and E.L. Price Bank,

Defendants,

Alice Brakke, Defendant and Appellant.

FARM CREDIT BANK OF ST. PAUL, f/k/a Federal Land Bank of St.

Paul, a federally chartered instrumentality of the

United States, and Kirk Cossette, Plaintiffs and Appellees, v. Chester A. BRAKKE, Alice Brakke, individually and as a

trustee of Pioneer Life Trust, Nancy Bye, Ronald D. Brakke,

individually and as a trustee of E.L. Price Trust, Pioneer

Life Trust, Harold Bergman, individually and as a trustee of

Common Title Bond & Trust, Common Title Bond & Trust, E.L.

Price Trust, Elaine Price Trust, and E.L. Price Bank,

Defendants.

Ronald Brakke, Defendant and Appellant.

Civ.Nos. 900417, 910211 and 910212.

Supreme Court of North Dakota.

March 23, 1992.

As corrected April 21, 1992.

Michael D. Nelson (argued) of Ohnstad Twichell, West Fargo, for plaintiffs and appellees.

Alan J. Sheppard (argued), Fargo, for defendants and appellants.

ERICKSTAD, Chief Justice.

Alice and Ronald Brakke appeal from a district court judgment quieting title to two tracts of land and permanently enjoining them from interfering with the legal owners' use of that land. Chester and Alice Brakke also appeal from a county court judgment evicting them from one of the tracts of land. We affirm the county court judgment, and we affirm the district court judgment in part, reverse in part, and remand.

In the early 1980's Chester and Alice were tenants in common, each holding an undivided one-half interest in the two contiguous tracts of land in Cass County involved in these actions, the Cossette land ¹ and the Federal Land Bank [FLB] land. ² Chester personally guaranteed agricultural loans made by Dakota Bank & Trust Co. of Fargo [Dakota Bank], to his son, Ronald. When Ronald defaulted on his loans, Dakota Bank sued Ronald and also commenced a separate action against Chester to recover on the guaranty.

In 1985 Dakota Bank obtained a judgment against Chester and executed on Chester's undivided one-half interest in the two tracts of land. On February 11, 1986, Dakota Bank purchased Chester's undivided one-half interest in the two tracts of land at a sheriff's sale, and after the one year redemption period expired, Dakota Bank received a sheriff's deed. Dakota Bank and Alice then each held an undivided one-half interest in the two tracts of land. However, several documents purporting to convey Chester's interest in the two tracts of land were filed with the Cass County Register of Deeds, and in 1987, Dakota Bank commenced a quiet title and partition action to adjudicate its interest in the two tracts of land.

In Dakota Bank & Trust Co. v. Federal Land Bank, 437 N.W.2d 841 (N.D.1989) [Dakota Bank I ], we affirmed a judgment quieting title to an undivided one-half interest in both tracts of land in Dakota Bank and appointing a referee to partition the land. The judgment in Dakota Bank I specified that Dakota Bank's interest in the FLB land was subject to a mortgage given by Alice to Federal Land Bank. In Dakota Bank & Trust Co. v. Federal Land Bank, 453 N.W.2d 610 (N.D.), cert. denied, --- U.S. ----, 111 S.Ct. 188, 112 L.Ed.2d 151 (1990) [Dakota Bank II ], we affirmed a partition judgment awarding the Cossette land to Dakota Bank and the FLB land to Alice, her successors and assigns. On April 30, 1990, Dakota Bank conveyed the Cossette land to Kirk Cossette by warranty deed.

Meanwhile, the Farm Credit Bank [FCB] ³ commenced a mortgage foreclosure action against Alice to foreclose her interest in the FLB land. In Federal Land Bank v. Brakke, 447 N.W.2d 329 (N.D.1989), we affirmed a judgment foreclosing Alice's interest in the FLB land. FCB purchased Alice's interest in the FLB land at a sheriff's sale and received a sheriff's deed on June 13, 1990.

While the partition action was pending and during the redemption period on the FLB land, various entities asserted conflicting interests in the Cossette land and the FLB land. Joane Kuball and Ronald were convicted of theft of property and attempted theft of property after they harvested some crops and attempted to harvest other crops from the two tracts of land in the summer of 1989. In State v. Brakke, 474 N.W.2d 878 (N.D.1991), this court reversed the convictions, holding that a criminal prosecution was not an appropriate means of resolving an ownership dispute between Dakota Bank and Alice, a cotenant in possession.

On January 22, 1990, Alice recorded a "Notice of Lis Pendens" on the FLB land with the Cass County Register of Deeds. The notice was signed by Alice as "co-trustee" of Pioneer Life Trust and asserted that Pioneer Life, a party in FCB's action to foreclose Alice's interest in the FLB land, had an interest in the FLB land. The "Notice of Lis Pendens" identified a pending federal court action in Minnesota which was subsequently dismissed. Euerle Farms v. Farm Credit Services of St. Paul, 928 F.2d 274 (8th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 179, 116 L.Ed.2d 141 (1991).

Additionally, a "Notice of Foreclosure and Trustee's Sale" was published in the Fargo Forum on July 2, 9, and 16, 1990. In that notice, Common Title Bond & Trust Company, "by Harold Bergman, Trustee," sought to sell both the Cossette land and the FLB land. Bergman executed a "Trustee's Deed," dated July 17, 1990, which purported to convey the two tracts of land from Common Title Bond & Trust to E.L. Price Trust.

FCB and Kirk then commenced this district court action to quiet title to both tracts of land and to enjoin the defendants from interfering with their use of that land. The district court granted a temporary restraining order and a temporary injunction in July 1990, prohibiting the defendants from entering the land to harvest crops, or for any other purpose. On May 6, 1991, the district court quieted title to the FLB land in FCB and to the Cossette land in Kirk. The district court also permanently enjoined the Brakkes from interfering with FCB and Kirk's ownership of the two tracts of land.

Meanwhile, FCB also commenced an action in county court to evict Chester and Alice from the FLB land. After a hearing on September 27, 1990, the county court ordered Chester and Alice, and all persons on the FLB land with their consent, to vacate the premises and to remove their personal property.

These consolidated appeals followed.

The Brakkes assert that neither the district court, nor the county court, had jurisdiction to hear these actions because FCB is not registered with the Secretary of State, and under Section 10-22-19, N.D.C.C., it cannot sue them in North Dakota. In Farm Credit Bank v. Rub, 481 N.W.2d 451 (N.D.1992), we recently reexamined this issue and once again concluded that FCB is a federally chartered corporation rather than a foreign corporation under Section 10-22-19, N.D.C.C., and that FCB is not required to obtain a certificate of authority from the Secretary of State in order to maintain an action in state court. The Brakkes' argument is without merit.

Relying upon Dieter v. Fraine, 20 N.D. 484, 128 N.W. 684 (1910), the Brakkes claim that the district court and county court actions violated their homestead rights under Article XI, Sec. 22, N.D. Const. In Dieter, 128 N.W. at 686, this court held that "[a]n execution for the enforcement of a judgment obtained upon a debt not within the classes enumerated [in the predecessor statute to Section 47-18-04, N.D.C.C.] may be levied upon the homestead only in case it appears after due application to the court and an appraisement had that the property ... exceeds in value the amount of the homestead exemption." Dieter involved an execution levy for a money judgment upon a creditor's claim for services rendered to an absent husband and did not involve a mortgage foreclosure. In Farm Credit Bank v. Stedman, 449 N.W.2d 562 (N.D.1989), we distinguished Dieter and held that Art. XI, Sec. 22, N.D. Const., does not prohibit the enforcement of a real estate mortgage against a homestead. See also, Farm Credit Bank v. Rub, supra. The Brakkes mortgaged their homestead and therefore their homestead rights were not violated.

The Brakkes contend that the district court erred in quieting title to the FLB land in FCB and to the Cossette land in Kirk. They assert that Common Title Bond & Trust sold the two tracts of land to E.L. Price Trust pursuant to advertisement and "Trustee's Deed." They argue that the district court erred in determining that the trustee's deed was ineffective and that E.L. Price Bank did not have any interest in the property. They also claim that the district court erred in cancelling and discharging the Notice of Lis Pendens filed by Alice.

Neither E.L. Price Bank, nor E.L. Price Trust, have appealed from the district court judgment and any issue about their interest in the property is not properly before us. Baukol-Noonan, Inc. v. Bargmann, 283 N.W.2d 158 (N.D.1979). Moreover, contrary to the Brakkes' argument, Dakota Bank I, Dakota Bank II, and Federal Land Bank v. Brakke, are not a "farce on their face." Dakota Bank obtained the Cossette land in Dakota Bank I and Dakota Bank II, and Kirk obtained that land by a warranty deed from Dakota Bank. Although Alice was awarded the FLB land in the partition judgment in Dakota Bank II,...