Johnson v. Knappe
| Decision Date | 17 November 1909 |
| Citation | 123 N.W. 857,24 S.D. 407 |
| Parties | JOHNSON v. KNAPPE SAME v. METZGER et al. |
| Court | South Dakota Supreme Court |
Appeal from Circuit Court, Davison County.
Consolidated actions by S. J. Johnson against Carl Knappe and against Gottlieb Metzger and another. From decrees for defendants and orders denying a new trial, plaintiff appeals. Affirmed.
M. L Sears and T. J. Spangler, for appellant.
A. E Hitchcock, for respondents.
The facts in these two cases being the same is so far as material to the issues therein, they were, by stipulation of the parties and consent of the trial court, submitted together and are likewise so submitted upon this appeal. These actions were brought to determine adverse claims to two pieces of real estate; both parties in each action claiming from the same common source-the plaintiff through a deed, and the defendants, through the foreclosure of a mortgage, which mortgage was given by plaintiff's grantor prior to the deed to plaintiff. The actions were tried to the court without a jury, and, the court having made its findings of fact and conclusions of law in favor of the defendants and entered decrees in conformity therewith, the plaintiff moved for a new trial in each action. Said motion being denied, he has appealed to this court from such decrees and orders denying a new trial.
There were contained in the bill of exceptions herein numerous assignments of error; some of them going to the question of the sufficiency of the evidence to support the findings of fact. Appellant, however, has abandoned the assignments alleging insufficiency of evidence by not discussing the same in his brief and attempting to point out in what respect the evidence was insufficient to support any designated finding or part thereof, and for this reason, while the appellant herein has in his brief, at times, referred to the evidence instead of to the findings, we are not concerned with any question of the sufficiency of evidence to support such findings. There are in such bill of exceptions numerous assignments of alleged errors of the court in its rulings upon admission of testimony. These also have been wholly abandoned by the appellant. Appellant assigns the insufficiency of the pleading to support some of the findings, but has apparently abandoned this assignment also failing to point out such insufficiency in his argument, and, moreover, we are fully satisfied that the pleadings of the respondents are amply broad and sufficient upon which to base the findings of the trial court. This leaves for our consideration the one question of whether or not the findings of fact herein are sufficient to support the conclusion of law and the decrees entered thereon.
The facts as found by the trial court are, briefly stated, as follows: One Daniel Nickish obtained a patent from the United States to these two pieces of land, and under such patents was the owner thereof when, on October 30, 1891, he and his wife executed and delivered a mortgage on said lands in favor of the Fidelity Loan & Trust Company, a corporation dealing in mortgage securities and transacting its business at Sioux City, Iowa. That on or about January 7, 1892, such loan company assigned said mortgage to one Moncreiff et al. as trustee, which assignment was recorded January 9, 1892, in the proper office for such recording. The acknowledgment attached to such assignment was defective, being in the form held insufficient by this court in the case of Holt v. Metropolitan Trust Co., 11 S.D. 456, 78 N.W. 947. On or about November 9, 1895, Nickish and wife by warranty deed conveyed these two tracts of land to plaintiff, which deed was soon thereafter placed on record, and which deed recited that the title was subject to the "incumbrances of record at this date." Plaintiff paid Nickish $25 for such deed. Beside the mortgage above mentioned, at the time plaintiff took his deed, a second mortgage was on record against said lands in favor of another company in no manner connected with the parties to this action, which second mortgage secured a considerable indebtedness. The first mortgage above mentioned remaining unpaid, foreclosure was commenced in the name of the trustees named in the assignment of such mortgage; the foreclosure being by advertisement, and the first publication being November 8, 1895. The notice of publication, the sheriff's affidavit, and the sheriff's certificate were duly filed for record on December 21, 1895, and such foreclosure proceedings were in every respect conceded to be regular and valid, save and except as affected by the faulty acknowledgment of the assignment. The purchase on foreclosure was made by Otto T. Bannard, and on December 22, 1896, he assigned the certificate of sale to one Geo. Edward Shaw, which assignment was duly recorded January 6, 1897. On December 30, 1896, sheriff's deed issued to Shaw and was recorded January 26, 1897. January 17, 1899, Shaw and wife conveyed one tract of this land to Herman Metzger by warranty deed, which deed was duly recorded March 1, 1899, and Metzger thereafter by warranty deed on January 23, 1903, conveyed this tract to the defendants in the second of these actions. Since said sale by Shaw, the Metzgers occupied the land and made improvements thereon. Such sale by Shaw was for a fair consideration price. After plaintiff received the deed from Nickish, he leased the lands to Nickish for the year 1896, receiving rentals $82.09 therefor. Plaintiff failed to redeem the land from foreclosure, made no improvements thereon, paid no taxes, and paid none of the mortgage indebtedness. He made no claim of title against the foreclosure until just prior to the commencement of this action, which was commenced in July, 1906. The total paid out by plaintiff was the $25 above referred to. Nickish when he gave the deed understood, from correspondence had in the negotiations leading up to such deed, that by giving such deed the land would not be foreclosed on, and the deed was given by him for the purpose of avoiding a sheriff's sale. From the time the original mortgage company was organized down to January, 1895, plaintiff was an employé thereof, being a clerk and traveling representative. January, 1895, the mortgagee failed, and its business passed into the hands of a receiver. It was part of plaintiff's duty while employed as above to collect the delinquent interest on loans, and he had charge of collecting the interest on the Nickish mortgage. He thus had full knowledge of the condition of such mortgage indebtedness, and in such employment plaintiff had correspondence with Nickish about the delinquent interest, prior to the time foreclosure was commenced and prior to the time he obtained his deed.
In 1895 parties holding securities which had been assigned organized a new corporation, known as "Fidelity Security Company." Said Fidelity Security Company was organized for the purpose of liquidating the assets derived from the other company. After this new company was organized, assets of the old company and all its records passed into the possession of the new company; and, while such new company was organized in the state of New York, the business of realizing on the assets of the company was conducted in the office at Sioux City, Iowa. Shaw and Bannard represented the holders of some of these securities. In July, 1895, one T. A Thompson of Sioux City, Iowa, was appointed as a general western agent for such Security company, and Bannard and Shaw, and thereafter Thompson, had full charge personally of the business of said company in relation to such securities, among which securities was this Nickish mortgage. Plaintiff continued in the employ of Thompson from July, 1895, up to 1900, with duties similar to those while under the employ of the old company. When the Nickish mortgage was placed with attorneys for the foreclosure, it was reported upon by plaintiff, and it was through him that the attorneys obtained the papers for the foreclosure. After foreclosure was completed, the title papers passed through plaintiff's hands and were by him forwarded to Shaw, who resided in New York City. Plaintiff on April 19, 1897, made an entry on the record books in the Sioux City office setting forth that he had forwarded the sheriff's deed to Shaw, together with the abstract and opinion thereon, and that there were no incumbrances against said land. The negotiations for transfer of the land to defendants and preparation of necessary papers to transfer title were had at Thompson's office, where plaintiff was employed, and plaintiff had full knowledge of such sale, but never disclosed, except just prior to commencing these actions, to defendants, or any one in their behalf, his having any interest in the land other than what would appear by an examination of the records in the office of the register of deeds. Plaintiff had no authority to purchase lands or securities held in Thompson's possession, and had been expressly prohibited from any speculation relative to securities and lands which passed through Thompson's hands for the purpose of liquidation. Except by recording his deed, plaintiff never revealed to Thompson, the Fidelity Security Company, Bannard, or Shaw that he claimed any interest in the land or any part thereof. This action was commenced July 25, 1906, prior to which plaintiff had in no manner asserted his claim to said land. Plaintiff was fully conversant with the business conducted by the old company and by the new, in liquidating the affairs of the old company. He was conversant with the manner of disposing of its securities, the details of the office work, and was continually in touch with the work connected with the collection of mortgage loans, foreclosure of mortgages, and disposition...
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