First Nat. Bank of Waseca v. Paulson

• Decision Date: 03 November 1939
• Docket Number: No. 6592.,6592.
• Parties: FIRST NAT. BANK OF WASECA v. PAULSON et al.
• Court: North Dakota Supreme Court

69 N.D. 512

288 N.W. 465

FIRST NAT. BANK OF WASECA

v.PAULSON et al.

No. 6592.

Supreme Court of North Dakota.

Nov. 3, 1939.

Syllabus by the Court.

1. On an appeal, where there is no new trial in the Supreme Court, the findings of the trial court are presumed to be correct; appellant has the burden of showing error, and a finding based upon parol evidence will not be disturbed, unless shown to be clearly opposed to the preponderance of the evidence.

2. There is a distinction between the obligation of a contract, and the remedy given by the Legislature for the enforcement of such obligation. The contract clauses of the State, and of the Federal, Constitution forbid the enactment of a State law impairing the obligations of contract; but the Legislature may modify, limit, or alter the remedy for the enforcement of a contract without impairing its obligations, provided that in so doing it does not deny all remedy or so circumscribe the existing remedy with conditions and restrictions as seriously to impair the value of the right.

3. The district courts are vested with original jurisdiction (except as otherwise expressly provided in the Constitution) of all causes both at law and equity; and they have all the powers according to the usages of courts of equity “necessary to the full and complete jurisdiction of the causes and parties and the full and complete administration of justice and to carrying into effect their judgments, orders and other determinations.” N.D.Const., Sec. 103; C.L.1913, Sec. 7349.

4. An action to foreclose a mortgage invokes the equity jurisdiction of the district court.

5. It is within the power of the district court which made a decree of foreclosure to vacate or set aside the sale made thereunder, on proper and timely application, and the showing of sufficient ground therefor.

6. A State statute (Laws 1937, Ch. 161, Sec. 3) which provides that “when any mortgage or other lien has been foreclosed by action, the Court shall, on the coming in of the report of sale, on the request of any party who has been personally served with a summons or who has appeared, cause notice of hearing thereon to be served on the parties to the action, who have appeared, and fix the time and place for hearing on said report”; and that “before granting an order confirming said sale, the Court shall, if it appears upon due examination that the sale price is unreasonable and unfairly inadequate, or that justice has otherwise not been done, order a re-sale,” does not unconstitutionally impair contract obligations, as applied to a mortgage executed and delivered before, but made payable and foreclosed after, the enactment of such statute.

Appeal from District Court, Stutsman County; McFarland, Judge.

Action by the First National Bank of Waseca against William L. Paulson, as administrator with the will annexed of the estate of A. P. Paulson, deceased, and others, to foreclose a mortgage. From an order setting aside a mortgage foreclosure sale and ordering another sale, the plaintiff appeals.

Order affirmed.

NUESSLE, C. J., and BURR, J., dissenting.Wm. R. Pearce and L. A. Stephan, both of Valley City, for appellant.

Roy A. Ployhar, of Valley City, for respondents.

CHRISTIANSON, Judge.

This is an appeal by the plaintiff from an order of the District Court of Stutsman County setting aside a mortgage foreclosure sale and ordering another sale.

The plaintiff is the owner of a mortgage on 480 acres of land in Stutsman County in this State. The mortgage was executed in October, 1934. Default was made in payment of the debt secured by the mortgage, and in January, 1938, the plaintiff instituted this action in the District Court of Stutsman County to foreclose the mortgage. The defendants appeared and interposed an answer. Thereafter, on July 20th, 1938, the plaintiff and the defendants, through their respective attorneys, entered into a written stipulation whereby it was agreed that the defendants' answer should be withdrawn and that plaintiff might proceed to enter judgment; and that the attorney for the plaintiff would give the attorney for the defendants at least five days notice in writing of the time of the sale of the premises and “at least five days notice in writing of the time and place where plaintiff will apply to the above named court for a confirmation of said sale.”

Thereafter plaintiff submitted proof, and the trial court found that there was due and owing to the plaintiff on the indebtedness secured by the mortgage the sum of $5,913.47; and the court directed judgment to be entered for the foreclosure of the mortgage and that-“All and singular the mortgaged premises * * * or so much thereof as may be sufficient to raise the amount adjudged to be due * * * be sold, * * * That the Sheriff give public notice of the time and place of said sale, according to law * * * and that said Sheriff execute and deliver to the purchaser or purchasers at said sale the usual Sheriff's Certificate of Sale, as provided by law, * * * and that he make a report of his proceedings and file the same with the Clerk of this Court.”

The Sheriff caused notice of sale to be published. The notice stated that the sale would be held at 2 o'clock in the afternoon on October 24th, 1938. On October 7th, 1938, plaintiff's attorney served upon the attorneys for the defendants a notice, in accordance with the stipulation heretofore mentioned, to the effect that a sale of the premises described in the judgment in this action “will be held by the Sheriff of Stutsman County, North Dakota, at the front door of the Court House in the City of Jamestown, County of Stutsman and State of North Dakota, at the hour of 2 o'clock in the afternoon of Monday, the 24th day of October, 1938, and * * * that on the same day, to-wit: the 24th day of October, 1938, at 3 o'clock in the afternoon of that day, the plaintiff will apply to the District Court, County of Stutsman, State of North Dakota, at the chambers of said Court in said Court House, for an order confirming the sale to be so held as above set forth.” The notice further recited that it was given pursuant to the stipulation between the parties dated July 20th, 1938.

The report of the Sheriff shows that he first offered the land in forty acre tracts, then in eighty acre tracts, then in one hundred and sixty acre tracts, but received no bids; and that thereupon he offered the premises for sale as a whole and received a bid of $1,680 from the plaintiff for the premises as a whole, and that thereupon the premises were struck off and sold to the plaintiff who was the highest bidder. The report of the Sheriff further shows that he executed and delivered to the purchaser the usual Certificate of Sale.

At the time of the sale there were outstanding taxes against the premises amounting to approximately $720.

At 3 o'clock in the afternoon on October 24th, 1938-the same day on which the sale was had-the plaintiff and defendants appeared before the trial court by their respective counsel, in accordance with the notice theretofore served upon defendants' counsel. The District Judge who ordered the judgment of foreclosure, presided at the hearing of the application to confirm the sale. The plaintiff presented to the court the Sheriff's report of sale and asked for confirmation. The defendants filed written objections to the confirmation, and asked that the sale be set aside on the ground, among others, “that the amount bid by the plaintiff in this case, which according to the Sheriff's report of sale is the sum of $1,680.00, is wholly inadequate and represents an unfair and improper value to be placed upon the property sold, in that the property sold represents three quarter sections of land in the eastern part of Stutsman County which is worth at least the amount of the encumbrance against it.”

After defendants had presented their objections to the confirmation of the sale, both parties produced witnesses who testified before the trial court. At the conclusion of the testimony, arguments were presented by counsel for the plaintiff and the defendants, respectively. Immediately following the arguments, the trial court said: “I feel that this sale should be set aside and a new sale ordered for the reason that the amount bid is unconscionable * * * *. The Court is not altogether unfamiliar with the matter of values-we have presided here in this county in the past year in 100 Federal Farm Loan mortgage foreclosures; we have presided here in the foreclosure of hundreds of other mortgages; and in no case in the Court's memory has the sale bid been as low-some $1680.00 for three quarter sections of land lying within two miles of Barnes County, the best section and best part of Stutsman County in location. * * In this case I have no hesitancy in setting it (the sale) aside as being unconscionable, * * *.”

Later the trial court made and filed a written order adjudging that the sale be vacated and set aside and that a re-sale be made. In such order the court found as a fact that, on the day of the sale, the reasonable market value of the real property involved here was not less than $5,760, and that the amount bid by the plaintiff was “wholly inadequate and unconscionable.” The plaintiff has appealed from such order, and contends:

(1) That the price bid by the plaintiff was adequate;

(2) That mere inadequacy of price was not a sufficient ground for setting the sale aside and ordering a re-sale; and,

(3) That if Section 3, Chapter 161, Laws 1937 (which provides that “before granting an order confirming said sale, the Court shall, if it appears upon due examination that the sale price is unreasonable and unfairly inadequate, or that justice has otherwise not been done, order a re-sale”), authorizes a court to order a re-sale on the sole ground of inadequacy of price, then such statute, as applied to mortgages executed before its enactment, operates to impair contract obligations in contravention of Section 16 of...