Franklin v. Zarmstorf

• Decision Date: 07 July 1944
• Docket Number: 31758.
• Citation: 15 N.W.2d 190,145 Neb. 21
• Parties: FRANKLIN et al. v. ZARMSTORF et al.
• Court: Nebraska Supreme Court

15 N.W.2d 190

145 Neb. 21

FRANKLIN et al. v. ZARMSTORF et al.

No. 31758.

Supreme Court of Nebraska

July 7, 1944

Syllabus by the Court.

1. Under section 20-202, Comp.St.1929, a prior mortgage not extended beyond the limitation fixed by the statute in the manner provided therein but attempted to be extended by unrecorded written agreement between the parties was effective as an extension between the parties and continued the priority of such mortgage over a subsequent mortgage where the subsequent mortgagee had notice of the unrecorded extension agreement.

2. By section 20-202, Comp.St.Supp.1941, which is amendatory of section 20-202, Comp.St.1929, a prior mortgage not extended beyond the limitation fixed by the statute in the manner provided therein but attempted to be extended by unrecorded written agreement between the parties is effective as an extension as between the parties, but is ineffective as to subsequent purchasers and encumbrancers for value notwithstanding such subsequent purchasers or encumbrancers may have had notice of such agreement.

3. Where the performance of a contract is impossible and a decree for specific performance cannot be enforced, the court will deny the remedy.

N H. Mapes and E. L. Mahlin, both of Fremont, for appellants.

Sidner Lee & Gunderson, of Fremont, for appellees.

Heard before SIMMONS, C. J., and PAINE, CARTER, MESSMORE, YEAGER CHAPPELL, and WENKE, JJ.

YEAGER Justice.

This is an action by Ella Zarmstorf Franklin, Lily Zarmstorf, Elmer Zarmstorf, Edward Zarmstorf and Frederick Zarmstorf plaintiffs and appellees, against Mary Zarmstorf, defendant, William Niewohner, Nora C. Heyne Foy and Frank A. Foy, defendants, cross-petitioners and appellants, wherein plaintiffs sought foreclosure of certain mortgages upon the north half of the southwest quarter of section 20 and the east half of the southeast quarter of section 19, township 20, range 6, east of the sixth P.M. in Dodge county, Nebraska, given to secure the payment of certain promissory notes claimed to be owing by Mary Zarmstorf to the plaintiffs. In the petition it was declared that the other defendants claimed some interest in the real estate, hence they were made parties to the action. By answer and cross-petition the defendant William Niewohner claimed that he had an interest in 120 acres of the described real estate by virtue of a written contract of sale entered into by and between him and Mary Zarmstorf, which contract he was entitled to have specifically enforced, and that one of the mortgages sought to be foreclosed was unenforceable and conclusively presumed to have been paid and discharged. By answer and cross-petition the defendant Nora C. Heyne Foy claimed that she had an interest in 40 acres of the described real estate created in the same manner as was claimed by Niewohner, and she made the same claim with reference to one of the mortgages. She also asked for specific performance. Frank A. Foy was the real estate agent in the transaction and he claims there is a commission due him of $572. He prays that if specific performance is decreed that this commission be credited on the purchase price payable by Nora C. Heyne Foy, and in the event that specific performance be not decreed that judgment be entered for that amount against Mary Zarmstorf with 6 per cent interest and that such judgment be a lien against an interest in the land which came to Mary Zarmstorf by reason of the death of a daughter after the execution of the mortgage declared by the defendants Niewohner and Foy to be unenforceable and discharged.

The cause was tried to the court and decree was entered granting foreclosure of the mortgages and denying all relief prayed by the defendants Niewohner and Foy in their answers and cross-petitions.

An appeal was perfected by said defendants Niewohner and Foy. The appeal has been abandoned by the defendant Niewohner, hence it now proceeds as to the defendants Foy alone. They will be referred to herein as appellants.

In the brief are found nine assignments of error. The gist of those which are of first importance is that appellant Nora C. Heyne Foy has a written contract for the purchase of real estate which she is entitled to have specifically enforced, and that the contract creates such an interest in the real estate as to permit her to have a decree declaring the mortgage hereinbefore referred to, and which will be hereinafter specifically identified, unenforceable and discharged.

In order that there may be a proper understanding of the issues it becomes necessary to set forth a history of certain incidents leading up to the commencement of this action.

On or about April 14, 1926, Mary Zarmstorf, defendant, being the owner in fee of the real estate hereinbefore described, and the mother of Ella Zarmstorf, Lily Zarmstorf, Elmer Zarmstorf, Edward Zarmstorf, Frederick Zarmstorf and Blanche Zarmstorf, executed and delivered six promissory notes, each for $2,780.89, payable in five years with interest at the rate of 5 1/2 per cent until maturity and 10 per cent after the due date. One note was to Ella, one to Lily, and four to William Werblow, as guardian of Blanche, Elmer, Edward and Frederick. These four were, at the time, minors. To secure the payment of the six promissory notes she executed and delivered three mortgages upon the real estate described herein. One was to secure the note to Ella, one to secure the note to Lily, and the third to secure the other four notes. The mortgages, or at least the one securing the four notes, appear to have been duly recorded on September 10, 1926. No principal or interest was ever paid on any of the notes. On April 1, 1937, the defendant Mary Zarmstorf executed and delivered a new note for $2,780.89 to Ella Zarmstorf payable in five years with interest at 5 1/2 per cent per annum. On the same day a note for like amount was executed and delivered to Lily Zarmstorf. These notes were secured by mortgages on the described real estate. These notes and mortgages were in the nature of renewals and were to take the place of the notes and mortgages to the same parties given on April 14, 1926, and recorded September 10, 1926.

The mortgage to Ella contained the following recital: 'This mortgage is concurrent with two other mortgages executed by said Mary Zarmstorf, widow, on the same date herewith,--one for $2,780.89 to Lily Zarmstorf and one for $11,123.55 to William Werblow, Guardian.' The one to Lily contained the following recital: 'This mortgage is concurrent with two other mortgages executed by said Mary Zarmstorf, widow, on the same date herewith,--one for $2,780.89 to Ella Zarmstorf and one for $11,123.55 to William Werblow, Guardian.' The record does not disclose that on this date or on any other date after April, 1926, a mortgage to William Werblow, guardian, was ever executed or delivered. However the $11,123.55 was the face amount of the four notes given to the guardian in April, 1926, and doubtless the statement represents the unexecuted intention of Mary Zarmstorf to renew and displace those four notes. We can only speculate upon the failure of execution of this intention. One fact does appear which stood in the way and that is that one of the wards had died in 1935, and probably one or more of those who were minors in 1926 had attained his majority before April, 1937. The following endorsement appears on the back of the notes given to William Werblow as guardian for Elmer, Edward and Frederick: 'The debt and interest represented by the within note not having been paid, the time of payment is hereby extended to April 1st, 1942. Mary Zarmstorf.' A like endorsement appears on the mortgage given to secure these notes. Blanche is the one who died in 1935 and the fact is, as disclosed by the record, that at the time of her death she had no husband or child, hence under the law Mary Zarmstorf, her mother, succeeded to such interest as she had in the 1926 note and mortgage. The record does not disclose the date when these endorsements were made.

On or about January 24, 1943, defendant Mary Zarmstorf executed a document in which she certified that she had sold the real estate in question to William Niewohner and Nora C. Foy and in which document she agreed to pay Frank A. Foy the standard commission for selling the land. This document was witnessed by Frank A. Foy. Appended to the document are the signatures of Wm. Niewohner and Nora C. Foy. Thereafter on January 25, 1943, a formal written contract was entered into between Mary Zarmstorf, party of the first part, and William Niewohner, party of the second part, whereby the party of the first part agreed to convey to the party of the second part 120 acres of the land described for the consideration of $85 per acre, payable on or before March 1, 1943, or as soon thereafter as the first party could furnish abstract showing merchantable title of record. It was agreed that the second party should go into possession 'in about a week' from the date of the contract. A like contract was entered into between Mary Zarmstorf and Nora C. Heyne Foy for the remaining 40 acres. This contract in addition contained the following provision: 'As part of the consideration there shall be applied by second party the amount of commission owing by first party to Frank A. Foy earned in connection with the sale of said land and also the 120 acres this day being sold to William Niewohner, which commission shall be on the basis of 5% on the first $10,000 and 2% on the balance thereof.'

No abstract showing merchantable title was ever presented. No part of the consideration was ever paid by either of the parties and no deed was ever tendered.

On March 13 1943, this action in foreclosure was instituted by the plaintiffs. The...