Havemeyer v. Paul

• Decision Date: 18 June 1895
• Citation: 63 N.W. 932,45 Neb. 373
• Parties: HAVEMEYER ET AL. v. PAUL ET AL.
• Court: Nebraska Supreme Court

45 Neb. 373

63 N.W. 932

HAVEMEYER ET AL.

v.PAUL ET AL.

Supreme Court of Nebraska.

June 18, 1895.

Syllabus by the Court.

1. In a suit to foreclose a mortgage, the owner of the equity of redemption was personally served, and answered in the time fixed by statute, traversing the material allegations of the petition. After such answer day, by leave of court, but without notice to said defendant, the plaintiff filed a supplemental petition to recover moneys which he alleged he had paid out to insure the mortgaged property subsequent to the bringing of the suit. Held: (1) The court erred in permitting the supplemental petition to be filed without notice thereof to the defendant. (2) The defendant, having answered, was bound to take notice of any reply to such answer which the plaintiff might make, but he was not compelled to take notice of the supplemental petition filed in the case. (3) The defendant had a right to presume that the court would render no other or different decree in favor of the plaintiff than that prayed for by him in his original petition. (4) That, because the defendant had answered the petition of the plaintiff within the time required by law, it would not be presumed that he had actual knowledge of the filing of the supplemental petition. (5) That the plaintiff, by filing the supplemental petition, in effect brought another suit against the mortgaged property and all the parties to the original action; and the defendant, without notice of the filing of such supplemental petition, in the absence of some act of his by which he waived such notice, was no more concluded by the decree rendered thereon than he would have been by a decree rendered in favor of the plaintiff on his original petition, without the notice or service of summons. (6) The evidence examined and found insufficient to support the finding and decree of the district court in favor of the plaintiffon the cause of action set out in his supplemental petition.

2. To such suit a number of persons were made codefendants with said owner, but not served with process. After the answer day of such owner the codefendants filed answers, claiming liens upon the mortgaged property. No notice of the filing of these answers was given the owner either before or after they were filed. Held: (1) That though the Code abrogated the old chancery practice, requiring defendants claiming affirmative relief to file cross bills and serve notice thereof on parties to be affected thereby, it did not abolish the principle that a party is entitled to notice of judicial proceedings instituted against him or his property. (2) That the answers of the codefendants were in effect suits against the owner of the mortgaged property, and he was not charged with notice of the filing of such answers because he had been served with process and answered the petition of the plaintiff within the time required by law.

3. A party made defendant to an action, and duly served with process, is charged with notice of whatever answer any of his codefendants may file in the action only when such answer is filed by such codefendant within the time required by law. Arnold v. Lumber Co., 55 N. W. 269, 36 Neb. 841. and cases there cited, followed, and reaffirmed.

4. The mortgage bond made the subject of said suit drew interest at 6 per cent. per annum from date until maturity, and 10 per cent. per annum after maturity. Held, that a decree based on said bond drawing interest at 7 per cent. per annum was not one of which the mortgagor could complain.

5. Where a note provides for a lawful rate of interest from date until maturity, and a higher and lawful rate of interest afterwards, the rate of interest which the note draws from its date to maturity is the contract rate for that time, and the rate which the note draws after maturity is the contract rate from that date within the meaning of section 3, c. 44, Comp. St. 1893. First point of the syllabus in Richardson v. Campbell, 51 N. W. 753, 34 Neb. 181, overruled.

6. Said section 3 construed, and held: (1) Where parties to a contract for the payment of money have not agreed upon any rate of interest, or agreed upon a rate less than 7 per cent., the judgment based on such contract draws interest at the rate of 7 per cent. per annum from the date of its rendition. (2) Where the parties to a contract for the payment of money have agreed upon a rate of interest lawful, greater than 7 per cent., the judgment based on such contract will draw the contract rate of interest.

Appeal from district court, Douglas county; Ferguson, Judge.

Action by William F. Havemeyer and another against George J. Paul and others to foreclose mortgages. From a judgment determining the amount due the various plaintiffs and other defendants, defendant George J. Paul appeals. Reversed.

George W. Shields, for appellant.

Wharton & Baird, Mahoney, Minahan & Smyth, McClanahan & Halligan, John P. Breen, Wm. A. Redick, and Howard B. Smith, for appellees.

RAGAN, C.

William F. Havemeyer and W. F. R. Mills--the latter as receiver of the Hamilton Loan & Trust Company--brought this suit in equity to the district court of Douglas county, making William J. Paul, the Phenix Loan Association, George J. Paul, Fred Reumping, the Midland State Bank, George B. Christie, George L. Green, William D. Mead, Jr., and a large number of other persons whose connection with this case is immaterial here, parties defendant. Said William J. Paul had executed two mortgages to the Hamilton Loan & Trust Company, and it had assigned one of said mortgages to Havemeyer. The suit was brought to foreclose these two mortgages. The record does not disclose, nor is the inquiry material here, why or upon what theory Havemeyer and the receiver of the loan and trust company brought this action jointly.

The action was brought on the 8th day of January, 1894, and a summons was issued for all the parties made defendants. This summons was returned on the 13th of January, duly served on George J. Paul, the Midland State Bank, and Fred Reumping only. None of the other above-mentioned parties made defendants to the action, so far as the record shows, were ever served with process. The answer day fixed by the summons was February 12, 1894. On the 8th of February, 1894, George J. Paul filed his answer to “the petition” of Havemeyer and Mills, traversing its averments, and setting out that he was the owner of the mortgaged premises, having become such at a date subsequent to the date of the mortgages being foreclosed.

On the 30th of January, 1894, the Midland State Bank filed its answer and cross petition, claiming a lien upon the mortgaged premises. On the 15th of March, 1894, by leave of the court, but without any notice thereof ever having been served upon or given to George J. Paul, Havemeyer filed a supplemental petition in the action, setting out that since the bringing of the suit, in order to protect his mortgage lien, he had paid out $222.77, as insurance premiums on the mortgaged premises, and prayed that he might be given a lien for said sum and interest against the mortgaged property.

On the 24th of April, W. D. Mead, Jr., filed an answer and a cross petition, claiming a lien upon said mortgaged property. On the 25th of April, George L. Green filed an answer and a cross petition, claiming a lien. On the 27th of April George B. Christie filed an answer and a cross petition claiming a lien against said property. And on the 16th of June, the Phenix Loan Association filed an answer and a cross petition claiming a lien against said mortgaged property. It is to be observed that these last four answers and cross petitions were filed after the answer day, and without notice to George J. Paul or the other parties to the suit. The record does not disclose that George J. Paul ever appeared in the case, either personally or by counsel, after the filing of his answer on February 8th, until after the decree. The answer of Fred Reumping--if indeed he ever filed one--does not appear in the record.

On the 27th and 28th days of June, 1894, the court heard the evidence in the case, Havemeyer,Mills, the Midland State Bank, Mead, Jr., Green, Christie, and the Phenix Loan Association appearing. George J. Paul did not appear on the trial, either in person or by attorney. On the 30th day of June, 1894, the court made the following findings: (1) That there was due Havemeyer on his mortgage bond and coupons, and for insurance paid since the bringing of the suit, $37,415.92, and that he had a first lien upon the mortgaged property; (2) that there was due Mills, receiver, on his mortgage, $1,104.24, which was a second lien upon the mortgaged property; (3) that there was due the Phenix Loan Association, on the bonds and mortgages set out in its answer, $12,420.30, which was a third lien upon the mortgaged property; (4) that there was due Fred Reumping, on the judgment set out in his answer and cross petition, $496, which was a fourth lien; (5) that there was due William Mead, Jr., on the judgment set out in his answer and cross petition, $2,184.24, with 7 per cent. interest thereon from December 29, 1890, and costs taxed at $333.16, which was a fifth lien on the premises; (6) that there was due the Midland State Bank, on the judgment set out in its answer and cross petition, $419.80, with interest thereon at 10 per cent. per annum from January 6, 1891, which was a sixth lien on the premises; (7) that there was due G. L. Green, on the judgment set out in his answer and cross petition, $65, with interest at 7 per cent. per annum from May 11, 1891, which was a seventh lien; (8) that there was due George B. Christie, on the judgment set out in his answer and cross petition, $2,013.33, which was an eighth lien. The decree provided that unless the said sums found due should be paid within 20 days the mortgaged premises should be sold, and the amounts found due paid out of the proceeds of said sale. To reverse this decree ...