Fidelity Securities Co. v. Martin

• Decision Date: 11 October 1921
• Docket Number: 16466.
• Court: Washington Supreme Court
• Parties: FIDELITY SECURITIES CO. v. MARTIN et al.

201 P. 301

117 Wash. 323

FIDELITY SECURITIES CO. v. MARTIN et al.

No. 16466.

Supreme Court of Washington

October 11, 1921

Department 1.

Appeal from Superior Court, King County; John S. Jurey, Judge.

Action by the Fidelity Securities Company, a corporation, against Orison Dickinson, Marie M. Martin, Rudolph Beck, as executor of the last will and testament of Theodore Zilinsky deceased, and others. Judgment for plaintiff, and the last two named defendants appeal. Reversed and remanded, with instructions.

Karl H Kober, Walter A. Keene, and Howard A. Adams, all of Seattle for appellants.

Wright, Kelleher, Allen & Hilen, of Seattle, for respondent.

FULLERTON J.

On November 18, 1911, Orison Dickinson and wife owned certain real properly situated in the city of Seattle. On that day they mortgaged the property to the First Mortgage & Savings Bank to secure a loan in the sum of $1,200, then made by the bank to them. Subsequent thereto the mortgage by assignments, duly and regularly executed, passed into the possession and ownership of the Fidelity Securities Company, the respondent on this appeal. No part of the principal of the loan was ever paid. Interest was paid thereon according to the terms of the loan down to the year 1916, but nothing more.

In the year 1914, Dickinson and wife conveyed the property to one William D. Ingalls, and subsequent thereto the title to the property passed by mesne conveyances through sundry holders to one Elizabeth M. Davis and one John Carrigan, in whom it was vested in the year 1919. In 1910, the city of Seattle authorized the construction of sewers in the streets and avenues abutting upon and adjacent to the property, providing in the ordinances that the cost of the sewers should be paid by assessment upon property benefited.

Pursuant to the ordinance the city of Seattle caused an assessment to be levied upon the property in question, payable in installments. One such installment was not paid, and subsequently the city caused the property to be sold under the lien of assessment. No other purchaser appearing at the sale, the city purchased the property for the amount of its lien thereon, and issued to itself a certificate of sale. On February 13, 1919, more than two years after the sale of the property to the city, C. V. Martin, acting pursuant to a contract entered into between himself and Theodore Zilinsky, purchased the certificate of sale in the name of Zilinsky. Immediately after the purchase of the certificate, notice was given in the name of Zilinsky to the owners of the property, under section 33, chapter 98, of the Laws of 1911, that Zilinsky was the holder of the certificate of sale, and that he would demand a deed to the property from the city. After service of the notice, and prior to the expiration of the 60-day period in which the owners are permitted under the statute to redeem from the sale, Martin in the name of Zilinsky took quitclaim deeds to the property from the owners. Between the time of the service of the notice and the delivery of the deeds Zilinsky died, a fact unknown to Martin. Zilinsky left a will in which Rudolph Beck was named as executor, and in due course he was appointed and confirmed as such by the superior court of King county. Acting in the name of the executor Martin applied to the city for a deed to the property. At that time the 60-day period in which Elizabeth M. Davis had the right to redeem by the terms of the statute had expired; Carrigan's time, however, had as yet some days to run. The city officers treated his quitclaim deed as a waiver of his right, and on May 12, 1919, one day prior to the time Carrigan's right to redeem expired, issued to the executor a deed to the property. Subsequently, and on May 29, 1919, the city issued to the executor another deed to the same property. This deed differed in no respects from the earlier deed, save that it had written on its margin the words, 'Correction Deed.'

By the terms of the contract between Zilinsky and Martin, Zilinsky agreed, in the case he should obtain title to the property, to deed the same to Martin 'or his daughter,' for the consideration of $300 in cash and a note for $1,500, payable three years after its date, with interest at 7 per centum, payable semiannually, secured by a mortgage on the property. On the execution of the deed to him from the city, the executor, pursuant to the terms of this contract and with the leave and approval of the court in which the probate proceedings were pending, conveyed the property to Marie M. Martin, a daughter of C. V. Martin, who, in turn, paid to the executor the sum of $300 in cash, and executed and delivered to him a note and mortgage in accordance with the terms of the agreement between Zilinsky and her father.

After the occurrence of these transactions, the respondent, as the owner and holder of the Dickinson mortgage, began the present action to foreclose the same. It made parties defendant to the action, among others, the executor Beck, C. V. Martin, and Marie M. Martin. The complaint was in the usual form, and contained allegations appropriate under our form of procedure to show a lien by mortgage on the property, and a right to its foreclosure. With reference to the defendants named, it was alleged that they had or claimed to have some interest in or title to the mortgaged property, but that such interests or liens, if any, were subject and inferior to the plaintiff's mortgage. The defendants named answered separately. C. V. Martin's answer was a disclaimer of interest. Marie M. Martin answered, setting up title herself, claiming title superior to the lien of the plaintiff's mortgage in virtue of the deed from the city to the executor and the deed from the executor to her. The executor's answer was to the same effect.

The cause was tried on the issues as thus framed, at the conclusion of which the court made among others, the following findings of fact:

'I. All of the allegations of the plaintiff's complaint are true and correct.'

'IV. The mortgage described in the plaintiff's complaint is a valid lien upon the the property described in the plaintiff's complaint to secure said sums and each of them, and said sums and all of them are due, owing, and unpaid.

'V. Theodore Zilinsky at the instigation of C. V. Martin purchased the record title of certain delinquent tax certificates, the record title of which, after the death of Theodore Zilinsky, descended to Rudolph Beck, as executor of the last will and testament of Theodore Zilinsky, deceased, subject to an agreement whereby the title to said property was to become vested in said C. V. Martin, the said C. V. Martin to pay said Theodore Zilinsky $300 in cash and to execute a mortgage to him on said property for the sum of $1,500 as compensation to said Theodore Zilinsky for the use of his name and money.

'VI. Subsequent to the death of Theodore Zilinsky, C. V. Martin, acting for himself and as attorney for said Rudolph Beck, as executor of the last will and testament of Theodore Zilinsky, deceased, for the purpose of obtaining a tax deed to said premises prior to the expiration of the period of redemption, and for the purpose of securing the entire title of said property in order to convey the entire title to Marie M. Martin, C. V. Martin's daughter, purchased for a valuable consideration the fee of said premises from the owners thereof prior to the expiration of the right of redemption from said delinquent tax certificates, and with the knowledge both of himself and said Rudolph Beck, executor of the last will and testament of Theodore Zilinsky, deceased, of the death of said Theodore Zilinsky, erroneously filled in the name of Theodore Zilinsky as grantee, on May 11, 1919, the deeds having been delivered to said C. V. Martin with the names of the grantees in blank and authority having been given to him to fill in the blanks.

'VII. Rudolph Beck, as executor of the last will and testament of Theodore Zilinsky, deceased, acting through C. V. Martin as his attorney, acquired deeds from John Carrigan and Elizabeth M. Davis, the owners of said property, for the purpose of inducing the treasurer of the city of Seattle to issue the said tax deeds prior to the expiration of the period of redemption, and represented to the treasurer of the city of Seattle that in obtaining said deeds Rudolph Beck, as executor of the last will and testament of Theodore Zilinsky, deceased, became the owner of the fee to said premises.

'VIII. The use of the names of Theodore Zilinsky and Marie M. Martin were merely assumed names of C. V. Martin, said C. V. Martin being the real party in interest.'

As conclusions of law, the court found that the answering defendants were estopped to deny that the executor became the owner of the fee to the property prior to the date of the issuance of the deed from the city on the certificate of sale; that the title acquired by the deed from the city merged in the legal title acquired from such owners; that this title was subsequent and inferior to the lien of the plaintiff's mortgage; and that the plaintiff was entitled to a decree of foreclosure in accordance with the prayer of its complaint. A decree was entered accordingly, from which this appeal is prosecuted.

There is much in the court's findings for which we can find no support in the evidence. It is found that Theodore Zilinsky purchased the certificate of sale from the city of Seattle at the 'instigation' of C. V. Martin....