Green v. Northwestern Trust Company
| Decision Date | 18 December 1914 |
| Docket Number | 18,999 - (27) |
| Citation | 150 N.W. 229,128 Minn. 30 |
| Parties | J.S. GREEN v. NORTHWESTERN TRUST COMPANY and Another |
| Court | Minnesota Supreme Court |
Action in the district court for Ramsey county to restrain defendant land company from paying to the Northwestern Trust Co. and the trust company from receiving from the land company any interest upon the land company's indebtedness, and to restrain the trust company from instituting proceedings to foreclose a mortgage given by the land company to the trust company to secure the payment of certain notes and interest. The case was tried before Kelly, J., who made findings and ordered judgment in favor of defendants. From an order denying plaintiff's motion for a new trial, he appealed. Affirmed.
Appeal and error -- no reversal for exclusion of evidence, when.
1. Though the trial court in an equity case erroneously excludes testimony bearing upon material facts in issue, and rejects offers to prove them, the case will not be reversed for such errors if, with the facts taken as the party offering the proof claims them to be, there could be no result in the case other than that reached by the trial court.
Usury -- presumption of legality, when.
2. Where notes are claimed to be usurious, and there is no expressed or actual intent as to whether the governing law of the transaction is the law of one state or another, to either of which it may with propriety be referred in part, and there is no attempt to evade the usury law, the court will indulge the presumption that the law of the state which upholds the transaction is the law intended by the parties; and applying this rule it is held that the law of Montana, under which the transaction involved was valid, was the proper law of the contract where purchase money notes were made to a corporation of that state, secured on lands located there sold to a South Dakota corporation, having an office in Minnesota, under the laws of which the transaction was invalid, though the negotiations were had in Minnesota, and the notes executed and payable there, and the trust deed securing them executed there to a Minnesota trust company as trustee.
Harris Richardson and Walter Richardson, for appellant.
Butler & Mitchell, for respondent.
This action was brought by the plaintiff, a stockholder in the Cartersville Irrigated Land Co. against that company and the Northwestern Trust Co. to enjoin the Cartersville company from paying and the trust company from receiving interest upon certain notes made by the Cartersville company to the Rosebud Land & Improvement Co., secured by a purchase money mortgage in the form of a trust deed made by the Cartersville company to the trust company as trustee, and to enjoin the trust company from proceeding to enforce the mortgage. There were findings for the defendants and the plaintiff appeals from an order denying his motion for a new trial.
1. On November 23, 1911, the Rosebud Co. and the plaintiff Green entered into a contract for the sale of certain Montana lands, the contract setting forth the agreement in detail. This contract Green assigned to the Cartersville Co. on December 6, 1911. On December 20, 1911, the Rosebud Co. conveyed the lands to the Cartersville Company.
During the summer of 1911 negotiations were had in Montana between the Rosebud Co. and Green relative to the disposition of these lands. The Rosebud Co. claimed that these negotiations had reference to a sale to Green and that they resulted in the conveyance to the Cartersville Co. Green claimed that he was acting as agent for the Rosebud Co.; that if he made a sale he was to have a commission; that the contract of November 23, 1911, which was acknowledged by the company on November 18, was executed for the purpose of enabling him to dispose of the lands to certain Minneapolis people; that these people did not complete the proposed purchase; that he then associated himself with other parties, with whom he was to have a joint interest, and that the contract was delivered to him by the Rosebud Co. as a matter of convenience in completing this transaction; and that the negotiations with reference to this transaction, which was completed when the conveyance to the Cartersville Co. was made, were had in Minnesota.
The real question in the case being whether the transaction was governed by the Minnesota law or by the Montana law, as is explained hereafter, the inquiry as to the nature and place of these negotiations was important. The court found that Green was not the agent of the Rosebud Company. There was evidence that he was and that he was not. The court sustained objections to pertinent questions put by plaintiff's counsel upon the issue, and sustained objections to plaintiff's offers to prove the facts as he claimed them to be, both as to Green's agency and as to the negotiations culminating in the deed to the Cartersville Co. In this the court erred. Ordinarily such an error, infecting as it did material facts in issue, results in a new trial. If, however, from the facts properly found, and the other facts found as the plaintiff claims them to be, including the facts in proof of which evidence was rejected, there could be but one result, and that the one reached by the trial court, a new trial should not be had; that is, if from the facts properly found, and the other facts taken to be as the plaintiff claims them, the law declares the transaction a valid one, a new trial is unnecessary. This is such a case. Therefore, in reciting the facts, additional to those properly found, they are assumed to be as the plaintiff by his rejected proofs offered to show them.
2. The ultimate question, upon which the rights of the parties depend, is whether the Montana law or the Minnesota law is the governing law of the transaction brought in question.
The facts, as we have them for the purposes of this appeal, are not in controversy and are not complicated.
The Rosebud Co. is a Montana corporation. It has no office elsewhere. Its officers and stockholders reside in Montana. The plaintiff Green is a resident of Montana. The trust company is a Minnesota corporation. The Cartersville Co. is a South Dakota corporation, organized there in December, 1911. It does business and has its principal office in Minneapolis, though it did not obtain the required license until after the transactions here involved. Its connection with the state of its birth has never been more than nominal.
On November 23, 1911, the Rosebud Co. and the plaintiff Green entered into a contract of sale of certain Montana lands, the contract before mentioned. This contract was executed in Montana by the Rosebud Co. and was delivered by its president J. E. Edwards to Green at Minneapolis and was by the latter signed there. It was then returned to Montana. It was delivered as the result of negotiations had in Minnesota. It was originally executed for use in a sale attempted by Green as agent of the Rosebud Co., which was not completed. One C. H. Wagner and one W. O. Williams were interested with Green in this contract. This the Rosebud Co. knew. It was at the time contemplated by Green and his associates that a corporation would be organized to take over the lands included in the contract. The Cartersville Co. was organzied under the laws of South Dakota for this purpose. Green, Wagner and Williams, together with a resident of South Dakota, were its incorporators.
The contract of November 23, 1911, contained this provision relative to the trust deed:
"Said trust deed or mortgage, trust deeds or mortgages, executed in conformity with the terms hereof, in other respects to contain such terms and provisions as are ordinarily contained in like indentures and instruments within the state of Montana, and to be in such form as the party of the first part shall desire and elect at the time of the execution thereof."
On December 6, 1911, Green made a formal assignment of the contract to the Cartersville Company. On December 20, 1911, the Rosebud Co. deeded the Montana lands to the Cartersville Company. Edwards, the president of the Rosebud Co., executed the deed in Minnesota and delivered it. It was attested by Beattie, the secretary of the company, and the corporate seal attached, apparently in Montana.
On December 20, 1911, the Cartersville Co. executed and delivered to the trust company a mortgage in the form of a trust deed to secure the promissory notes representing the unpaid purchase price. The notes ran to the Rosebud Co. They were delivered to Edwards at Minneapolis and by him given to the Rosebud Co. in Montana. Of the purchase price $25,000 was paid in cash or in notes accepted in lieu of cash. The balance of the purchase price was represented by notes. One note for the sum of $25,000 was payable on January 1, 1913, and one for $772.21 and one hundred and sixty-three for $1,000 each were payable on January 1, 1918. The amount secured by the trust deed was $188,772.20. These notes drew interest at the rate of six per cent per annum, payable annually, and the usual coupons were attached. The notes contained this provision:
"And it is agreed that any unpaid principal or interest after the same becomes due shall bear interest at the rate of eight per cent. per annum, payable annually."
The coupons contained this provision:
"This coupon note bears interest at the rate of eight per cent. per annum after maturity."
The Minnesota statute provides as follows:
"Contracts shall bear the same rate of interest after they become due as before, and any provision in any contract, note, or instrument providing for an increase of the rate of interest after maturity, or any increase therein after making and delivery, shall work a forfeiture of the...
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