Gandrud v. Bremer

• Decision Date: 11 May 1945
• Docket Number: No. 33936.,33936.
• Citation: 18 N.W.2d 687,220 Minn. 10
• Parties: GANDRUD et al. v. BREMER.
• Court: Minnesota Supreme Court

18 N.W.2d 687

220 Minn. 10

GANDRUD et al. v. BREMER.

No. 33936.

Supreme Court of Minnesota.

May 11, 1945.

Appeal from District Court, Ramsey County; Albin S. Pearson, Judge.

Suit by Oluf Gandrud and another, as trustees of the trusteed assets of Swift County Bank, Inc., against Paul G. Bremer to recover a portion of the amount paid by plaintiffs to obtain from defendant as assignee of a mortgage on realty a satisfaction thereof. Findings of fact and conclusions of law were made in favor of plaintiffs, and from an order denying defendant's motion for a new trial, he appeals.

Reversed with directions to enter judgment for defendant.

Cummins & Cummins, of St. Paul, and Thorwald Hansen, of Duluth, for appellant.

George L. Barnard, of Dubois, Idaho, and Frank A. Barnard, of Benson, for respondents.

LORING, Chief Justice.

This was a suit to recover $540 and interest from the defendant. It was in the nature of an accounting and was tried before the court without a jury. Findings of fact and conclusions of law were made in favor of plaintiffs, and defendant comes here on appeal from an order denying his motion for a new trial.

This case is a sequel to Gandrud v. Hansen, 210 Minn. 125, 297 N.W. 730, to our opinion in which reference is made for a statement of the preliminary facts. It is necessary, however, to supplement the facts therein stated by a short statement of the occurrences that led up to this lawsuit. The property involved in the prior Gandrud case was subject to three mortgages, the first of which, together with an assignment of the rents as additional security, had been assigned to defendant. In that case, he was held to be a mortgagee in possession and entitled to retain possession and collect the rents, which it was his duty to apply upon the debt secured by the first mortgage. It was held that the subsequent lienholders were entitled to have such application made. The second mortgage was foreclosed, and the then owner of the fee claimed the right, during the year of redemption, to collect the rents from the property for himself, and he refused to turn them over to Bremer. The plaintiffs, as holders of the third mortgage, which they foreclosed, redeemed from the second mortgage and sought to pay and get a satisfaction of the first mortgage. In seeking the satisfaction, they demanded of Bremer an accounting of the rents and of the amount remaining due on the first mortgage. In the negotiations which followed the suit, Bremer refused to credit them with the $540 which the former fee owner had collected during the year of redemption from the foreclosure of the second mortgage. It is this $540 that is involved in this lawsuit. Plaintiffs claim that it was Bremer's duty to collect it and credit it on the first mortgage debt. There was no deception used by Bremer in the transaction under which plaintiffs sought to pay up and cancel the first mortgage. He fully disclosed the facts, and plaintiffs knew that the former fee owner had collected the rents for himself and had refused to turn them over to Bremer. There is no element of mistake with regard to the accounting or as to the amount required to satisfy the mortgage. There was merely a bona fide dispute as to Bremer's responsibility for the rent collected by the fee owner. Plaintiffs, knowing all the facts and Bremer's contention that he was not responsible for the rents paid to the fee owner, paid Bremer the amount he claimed due on the first mortgage, giving plaintiffs no credit for...