John Perry, Receiver of the National Bank of Kansas City, Missouri v. Baker

• Decision Date: 22 May 1901
• Docket Number: 9,599
• Citation: 86 N.W. 692,61 Neb. 841
• Parties: JOHN PERRY, RECEIVER OF THE NATIONAL BANK OF KANSAS CITY, MISSOURI, APPELLANT, v. ACHILLES BAKER ET AL., APPELLEES
• Court: Nebraska Supreme Court

86 N.W. 692

61 Neb. 841

JOHN PERRY, RECEIVER OF THE NATIONAL BANK OF KANSAS CITY, MISSOURI, APPELLANT, v. ACHILLES BAKER ET AL., APPELLEES

No. 9,599

Supreme Court of Nebraska

May 22, 1901

APPEAL from the district court for Greeley county. Heard below before THOMPSON, J. Affirmed.

AFFIRMED.

Bell & Robinson, for appellant.

W. T Thompson, contra.

SEDGWICK C. OLDHAM and POUND, CC., concur.

OPINION

SEDGWICK, C.

This action was brought to foreclose a mortgage given by defendant Baker and wife to Mary E. Kelley on land in Greeley county to secure a negotiable note for $ 800. The mortgage was subject to a mechanic's lien for materials sold Baker prior to the execution of the mortgage. Mary E. Kelley indorsed the note in blank and delivered it to A. E. Cady, together with an assignment of the mortgage. The assignment was duly recorded. Afterwards, on the 5th day of May, 1890, Mr. Cady sold and delivered the note to the National Bank of Kansas City. The bank was an innocent purchaser of the same; and this plaintiff, who is receiver for said bank and is seeking to foreclose this mortgage, holds this note as an innocent purchaser for value. The mechanic's lien on the premises was foreclosed, the decree being regularly entered in the district court of Greeley county on the 13th day of October, 1891. At the time of the commencement of the mechanic's lien foreclosure the mortgage sued upon herein and the assignment to Cady were of record in Greeley county, and Cady and Mary E. Kelley were made parties defendant to the foreclosure proceedings. On the sheriff's sale, under the decree, Cady purchased the property, and the surplus proceeds of the sale, amounting to $ 638.43, was treated as belonging to Cady and allowed him by the sheriff on his bid, the money never having passed through the hands of the sheriff. Afterwards, Cady and his wife conveyed the land by quitclaim, and the defendant, Jensen, derived his title from Cady through mesne conveyances, all of which were warranty deeds. Mr. Jensen purchased the land for full value and without any actual notice of the mortgage sued on, the deed to him being a warranty deed, and Jensen took possession of the premises on the 4th day of April, 1895, immediately upon receiving his deed, and has ever since had possession. The petition was in the ordinary form of a mortgage foreclosure, alleging also that the bank was an innocent purchaser of the note, and the answer admitted these allegations of the petition, and states the foregoing matters in defense. Defendant Rounds claims under a mortgage executed by a grantee of Cady, and the title of defendant Jensen is subject to her mortgage. The district court found generally in favor of the defendants, ordered the plaintiff's mortgage canceled and quieted the title in Jensen, subject to the mortgage of the defendant, Rounds. From this decree the plaintiff appeals.

It appears from the record that the plaintiff filed a general demurrer to the defendants' answer, on the ground that it did not state facts sufficient to constitute a defense, which was sustained by the court. The defendants then took leave to amend their answer instanter; and amended by interlining the allegation that the bank did not become the owner of the note and mortgage until after the commencement of the mechanic's lien foreclosure. To this answer so amended the plaintiff filed a reply, and upon trial the undisputed evidence shows that the bank did become the owner of the note and mortgage on the 5th day of May, 1890, which was before the commencement of the mechanic's lien foreclosure; and the plaintiff now insists that the ruling of the court upon the demurrer determines the law of the case to be that the defendants have no defense in this action unless they make it appear from the evidence that Cady was the owner of the mortgage at the time of the mechanic's lien foreclosure, and as the defendants have failed in that respect, the decree must for that reason, be in favor of plaintiff. We think this position is untenable. In Richman v. Board of Supervisors, 77 Iowa 513, 42 N.W. 422, the supreme court of Iowa said (page 426): At the trial in the district court there was a demurrer to the petition, which was overruled, after which the defendants made a return to the writ, as required by its terms. At the further hearing there was a change in the personnel of the court, and it is urged that the issues presented by the return were the same as those arising on the demurrer to the petition, and that there was a readjudication thereof against the objection of appellants, and its correctness is urged for our consideration. We think the change of judges makes no difference. It is the same court. We are not prepared to hold that if during the trial of the issues of an action a court becomes convinced of an error he may not correct it. It would be a serious impediment to a fair and speedy disposition of causes...