Hagen v. Altman

• Citation: 79 N.W.2d 53
• Decision Date: 26 October 1956
• Docket Number: No. 7605,7605
• Parties: Alf HAGEN, Selma Camile Kopperud, Johan Edgar Hagen, Agnes Elida Toso, Oscar Hagen, Anne Ovedia Pratt, Jennie Evely Anderson, and Ingvald Hagen, Plaintiffs and Respondents, v. Minnie ALTMAN and G. A. Altman, her husband, Williams County, North Dakota, a public corporation, and all other persons unknown claiming an estate or interest in, or lien or encumbrance upon the real property described in the Complaint, Defendants and Appellants.
• Court: North Dakota Supreme Court

Page 53

79 N.W.2d 53

Alf HAGEN, Selma Camile Kopperud, Johan Edgar Hagen, Agnes

Elida Toso, Oscar Hagen, Anne Ovedia Pratt, Jennie

Evely Anderson, and Ingvald Hagen, Plaintiffs and Respondents, v. Minnie ALTMAN and G. A. Altman, her husband, Williams

County, North Dakota, a public corporation, and all other

persons unknown claiming an estate or interest in, or lien

or encumbrance upon the real property described in the

Complaint, Defendants and Appellants.

No. 7605.

Supreme Court of North Dakota.

Oct. 26, 1956.

Syllabus by the Court.

1. Where a motion to open and set aside a default judgment is made, and an affidavit of merits and proposed answer is served, setting up a meritorious defense, it is error to anticipate that the proposed answer is subject to the defense of the statute of limitations, as such defense must be pleaded, Section 28-0139, NDRC 1943, and under this statute this is the case although it may be apparent from the face of the pleading that it is subject to the statute of limitations.

2. In an application for relief from a default judgment the plaintiffs will not be permitted to combat any defense claimed by the moving parties; and the determination that the proposed answer is subject to the defense of the statute of limitations is an adjudication of the issues upon the merits which is not before the court in an application for relief from a default judgment.

3. Section 32-1713, NDRC 1943 is remedial in nature and is entitled to a liberal construction and application.

4. Since this court views with favor the trial of cases upon the merits, where in an action to quiet title, relief is sought within a year after the rendition of a default judgment obtained on constructive service concerning which the moving parties had no knowledge, and it appears from the showing made that the moving parties have shown reasonable diligence in seeking relief, the judgment should be opened and vacated and the moving parties permitted to answer and defend.

Ilvedson, Pringle & Herigstad, Minot, for Victor V. Stiehm, Adele Stiehm, Irma Stiehm Goldy and Emilie Stiehm, as Trustees of the Stiehm Inv. Co., appellants.

Burk & O'Connell, Williston, for respondents.

JOHNSON, Judge.

This is an action to quiet title to real property located in Williams County, North Dakota, commenced on the 12th day of August 1954. Judgment by default was entered on the 15th day of October 1954. On October 13, 1955, Victor V. Stiehm, Adela Stiehm, Irma Stiehm Goldy and Emilie Stiehm, as trustees of the Stiehm Investment Company, a defunct corporation, noticed a motion to open up and set aside the default judgment entered in this action and to permit them, as trustees of the Stiehm Investment Company, to file an answer, a copy of which was attached to the motion.

The notice of motion and the motion, together with an affidavit of merits and a copy of the proposed answer were served upon the attorneys for the plaintiff on the 14th day of October 1955. The plaintiffs resisted the motion, filed counter affidavit to the affidavit of merits made by Mr. Victor v. Stiehm, one of the trustees of the Stiehm Investment Company, and upon the hearing on the motion also took oral testimony of Mr. Stiehm and another witness.

On January 6, 1956, the District Court of Williams County denied the motion to open and set aside the default judgment and permit the parties to file answer and defend the action. The moving parties, Victor V. Stiehm, Adela Stiehm, Irma Stiehm Goldy and Emilie Stiehm, as trustees of the Stiehm Investment Company, appeal to this court from the order denying the motion to open and set aside the judgment and permit them to defend.

The trial court's first ground for denial of the motion was thus stated:

'* * * it clearly appears from the evidence adduced by affidavit and cross-examination of Victor V. Stiehm and from the moving Defendants' Proposed Answer that the cause of action of the moving Defendants against the Plaintiffs and their predecessor in interest accrued more than six years prior to the service of the Notice of Motion to Vacate the Judgment.'

It also based its order of denial upon the ground that the Stiehm Investment Company had not acted with reasonable diligence in presenting its motion after Victor V. Stiehm became aware of the significance and effect of the judgment with respect to the possible interest of the Stiehm Investment Company in the real property involved in this action.

The appellants specify as error that the trial court can go no further than to determine whether a meritorious defense is presented by the affidavit of merits and the proposed answer, and that it may not anticipate a defense of the statute of limitations; this statute is an affirmative defense which must be pleaded. The appellants also specify as error that though the statute of limitations might be considered by the trial court in determining the motion to open and set aside the judgment, the situation as to the state of the title indicates a constructive trust in favor of the appellant to the title of the property, and that the only statute of limitations involved, if any, is the twenty-year statute, NDRC 1943, 28-0104; and that the court erred in determining that reasonable diligence was not exercised by the moving parties.

For a complete understanding of the situation it is necessary to set forth the essential facts giving rise to the application of the appellants to open up and set aside the default judgment entered in this action.

The quiet title action involves a 40-acre tract of land described as the Northeast Quarter of the Northwest Quarter (NE 1/4 NW 1/4) of Section 23, Township 158 North of Range 95 West of the 5th P.M. At the time of the commencement of the action and prior to its forfeiture for taxes to Williams County, North Dakota, the record title to the land was in Mrs. Minnie Altman. The taxes for 1931 became delinquent and were sold on December 13, 1932, at public auction. Williams County, North Dakota, took tax title to the property involved on March 1, 1940, for nonpayment of the 1931 taxes. It sold the land in September 1943 to Ansten O. Hagen by contract for deed. On February 5, 1945, the county executed and delivered a tax deed to him. This deed was recorded in the office of the register of deeds, Williams County, North Dakota, on April 6, 1945. Ansten O. Hagen died after the acquisition of this property, and his estate was probated and decreed to his widow, Oline Hagen, on the 14th day of November, 1949. A few years later Oline Hagen died, and the property involved in this action was decreed to her children, the plaintiffs in this action.

Service of the summons and complaint in this action was made by publication and registered mail upon the defendants Minnie Altman and G. A. Altman, her husband. Service was obtained by publication as to 'all other persons unknown claiming an estate or interest in, or lien or encumbrance upon the real property described in the complaint.'

Mr. Victor V. Stiehm, in his affidavit, states that the judgment in this action was taken without any notice to him or to any of the other trustees of the Stiehm Investment Company, or any of its officers or agents. The record title would indicate that they were unknown parties, and if served, were served by publication of the summons. Mr. Stiehm further sets out that neither he nor the other trustees of the Stiehm Investment Company, nor its officers and agents had any notice whatsoever of the tax deed proceedings, the sale of the land to Williams County, and the purchase of the property by Ansten O. Hagen from the county, or the pendency of the action and the entry of the judgment therein. He further states that it was not until on or about September 1, 1955, when his wife located some papers in connection with this land that had been lost, to wit a deed and a lease, that an investigation was made concerning the title.

It appears that on the 24th day of September 1927, and before Mr. Stiehm took over the management of the Stiehm properties, Minnie Altman and G. A. Altman, her husband, deeded the property involved in this action to the Stiehm Investment Company. He states he had no knowledge of the deed and lease until about September 1, 1955. The deed was never recorded. On the 28th day of February 1929, the Stiehm Investment Company, as lessor, leased the property to Ansten O. Hagen for a period of three years commencing on the 1st of April 1929, and ending on the 1st day of April 1932. The lease provided that the first party, Ansten O. Hagen, pay as rent for the premises, 'the sum of 1928 taxes, 1929 taxes and 1930 taxes, payable in three installments, * * * 1928 taxes before March 1, 1929, 1929 taxes before March 1, 1930, 1930 taxes before March 1, 1931.' Although he apparently retained possession of the land under the lease, he did not pay the 1931 taxes.

As far as the record is concerned there was no notice given by Ansten O. Hagen of his intent to purchase the property from Williams County.

The answer proposed and submitted with the moving papers, by the appellants, sets forth generally the facts hereinbefore related; that the Stiehm Investment Company acquired title to the property, and was the owner of it under the unrecorded deed mentioned; that it had entered into the lease with Ansten O. Hagen; that Ansten O. Hagen had remained in possession after the expiration of the specific term specified in the lease, and that the same was renewed thereafter from year to year by operation of law; that he had the use and occupation of the property as tenant all through the farming years of 1930 to 1940; that on or during all this time the tenant, Ansten O. Hagen, failed and neglected to pay the real estate taxes on the property as he was legally and morally bound to do, and that he wrongfully breached the covenants of his lease and permitted the property to go to tax deed; and that contrary to his duty and good faith and...