Knaak v. Brown

• Decision Date: 14 February 1927
• Docket Number: 24363
• Citation: 212 N.W. 431,115 Neb. 260
• Parties: THEODORE KNAAK, APPELLEE, v. LESLIE B. BROWN ET AL.: HERMAN STATE BANK, INTERVENER, APPELLANT
• Court: Nebraska Supreme Court

212 N.W. 431

115 Neb. 260

THEODORE KNAAK, APPELLEE, v. LESLIE B. BROWN ET AL.:

HERMAN STATE BANK, INTERVENER, APPELLANT

No. 24363

Supreme Court of Nebraska

February 14, 1927

APPEAL from the district court for Cedar county: GUY T. GRAVES JUDGE. Affirmed, and remanded, with directions.

AFFIRMED, AND REMANDED, WITH DIRECTIONS.

J. A Singhaus, for appellant.

P. F O'Gara, contra.

Heard before ROSE, DEAN, DAY, GOOD, THOMPSON and EBERLY, JJ.

OPINION

EBERLY, J.

This was originally the usual action to foreclose a purchase money mortgage upon a certain business property situated at Coleridge, Cedar county, Nebraska, brought by Knaak, as plaintiff, against Leslie B. Brown et ux. and Floyd Van Valin et ux. as sole defendants. The Herman State Bank sought to intervene after decree of foreclosure was entered, statutory stay thereof taken, and after a claimed dismissal had been entered by plaintiff, followed by his motion to vacate the same and reinstate decree of foreclosure. The allegations of the bank's amended petition in intervention were placed in issue by appropriate pleadings, and upon hearing thereof by the district court for Cedar county, June 16, 1924, relief was denied and the petition of intervention dismissed. This order was journalized June 18, 1924. This last named order only the intervener superseded and from it an appeal is prosecuted. In its assignment of error contained in its brief, intervener adds a further assignment covering the denial by the trial court of its motion to set aside an order made in said cause, December 14, 1923, setting aside the dismissal of said action and reinstating said decree of foreclosure. No motion for new trial was filed, and the cause is here for trial de novo.

A brief recital of certain facts of the transaction may assist in properly presenting the question requiring our attention: Brown and wife executed the mortgage foreclosed. At the time of the entry of the decree of foreclosure, Van Valin had become the owner of the property by purchase from Brown, and under the terms of his conveyance had assumed, as part of the consideration, the payment of the mortgage debt, and was in possession of the property. About the time of the expiration of the statutory stay, Van Valin made an application to the Occidental Building & Loan Association of Omaha for a loan on the mortgaged premises which, to the extent of $ 2,500, was, at least, conditionally accepted by that company. Notes and mortgage evidencing that amount were forwarded to Van Valin and wife, executed by them, and this mortgage recorded by the loan company.

Contemporaneous with these negotiations an agreement for settlement of the foreclosure decree had been arrived at. In accordance therewith, Van Valin prepared a check for the sum of $ 500 payable to Knaak, a note of $ 660.75 secured by a chattel mortgage, likewise payable to Knaak, and had placed these instruments in possession of Mr. Gray, a banker, trusted by both parties. Under the arrangement between Van Valin and plaintiff Knaak, upon the expected receipt of the proceeds of the $ 2,500 loan, Mr. Gray was to deliver the same, together with the $ 500 check, the note of $ 660.75, and chattel mortgage securing the same, to Knaak, who was thereupon to execute a proper satisfaction of his decree of foreclosure. The foregoing constituted the substantial terms of the settlement agreed upon.

It was discovered, however, that the requirements of the loan company were such that it was necessary for Knaak to release the decree of foreclosure of record before the proceeds of the $ 2,500 loan would be paid over by the loan company. To accomplish this purpose the following entry was made by Knaak's attorney upon the appearance docket of the district court for Cedar county, page 44: "Settled and dismissed April 3, 1923, by order of P. F. O'Gara, attorney for plaintiff. P. F. O'Gara. D. F. Crouch, Clerk. April 4, 1923, received of P. F. O'Gara, $ 19.30 bal. costs in this case. D. F. Crouch, Clerk."

The Occidental Building & Loan Association reconsidered and concluded to decline to make the loan, and refused to pay over the money represented by the mortgage of $ 2,500 and the note of that amount it had received. These papers were returned to the makers with a release of its $ 2,500 mortgage recorded by it on April 25, 1923. Owing to the impossibility thus created, the settlement agreement between plaintiff and defendant was never carried out, and no delivery thereunder was ever made by Gray to Knaak of the property herein referred to.

It appears that on April 21, 1923, in a cause that had been pending in the district court for Washington county, Nebraska, wherein the Herman State Bank was plaintiff, and Floyd Van Valin was defendant, a judgment for a deficiency was entered against Van Valin and in favor of the bank for $ 2,753.60. A transcript of this judgment was filed in the district court for Cedar county on April 24, 1923. At the time of the filing of the transcript the record disclosed the unreleased $ 2,500 mortgage in favor of the loan association as a first lien on the premises. The result of the recording of the release by the loan association was to make the judgment of the Herman State Bank, so far as the records were concerned, an apparent first lien on the premises in suit. On August 20, 1923, and during the March, 1923, term of the district court for Cedar county, Nebraska, Knaak filed a motion in his foreclosure case, having for its declared object and purpose that the "dismissal" hereinbefore set out "be vacated of record, and that said cause be fully and completely reinstated, and that the decree of foreclosure be declared to be of full force and effect." Neither Van Valin nor any of the defendants oppose this motion. On September 4, 1923, the Herman State Bank, by petition of intervention, sought to interpose objection to this motion. The allegations of this petition of intervention were controverted by pleadings of the plaintiff Knaak.

On December 14, 1923, "it being a day of the regular December, A. D. 1923, term of the district court, in and for Cedar county, Nebraska," the district court heard the motion of Knaak to set aside, cancel and hold for naught the entry on the appearance docket hereinbefore quoted, and, by its order of that date, canceled and annulled the entry and reinstated the decree of foreclosure in full force and effect.

On January 5, 1924, the Herman State Bank filed a motion to set aside this order made on December 14, 1923, "for the reason that said entry was secured by plaintiff of said order on December 14, 1923, without notice to intervener of the time when said motion would be taken up for hearing by said court, and with full knowledge on the part of plaintiff that said intervener was depending upon said plaintiff securing an order fixing a time for hearing thereon, and advising said intervener when to be present." This motion of the bank to set aside the order of December 14, 1923, was heard and denied by the district court on March 3, 1924. It may be said in passing that the evidence before the court upon the hearing of the motion of Knaak to reinstate the decree which was sustained by the order of December 14, 1923, as well as evidence received on the hearing of the motion of intervener bank to set aside the decree of December 14, 1923, which was denied March 3, 1924, is not preserved in the record.

On June 16, 1924, a further hearing was had in the case of Knaak v. Van Valin et al. on issues formed by the amended petition of intervention filed in behalf of the Herman State Bank, the answer and cross-petition of plaintiff Knaak thereto, and reply of bank. The district court's decision following, which has already been set out, furnishes the basis of intervener's appeal. The crux of appellant's complaint is the cancelation by the district court of the entry of April 3, 1923, a copy of which has been set out.

The parties and district court alike, in the record, refer to the entry of April 3, 1923, as "dismissal," "settlement and dismissal," etc. It is obvious, however, that the true nature and legal effect of the entry in question must be determined by its substance and is not at all affected by what the parties may call it. In substance, it fails to conform to the requirements of a "dismissal." Indeed, in the absence of statute conferring statutory powers to dismiss upon parties, the general rule undoubtedly is that discontinuance must be by leave of court, express or implied, and upon its order, and that a dismissal cannot be accomplished by the mere act of plaintiff alone, and particularly after trial and verdict, it being considered that the granting or refusal of leave to dismiss, discontinue, or take nonsuit, is a matter of practice to be exercised at the discretion of court with reference to the rights of both parties.

Our Civil Code provisions, so far as applicable to a proceeding after final judgment or decree, are in strict conformity with the rule above. Comp. St. 1922, secs. 8598, 8599.

Under the express provisions of our statutes, an order of dismissal must be made by the court and must be entered upon the journal of the court. Comp. St. 1922, sec. 8952. No such entry appears in this record.

In a case involving the principle controlling here, the supreme court of California said that the filing of the written statement of abandonment, and the clerk's entry in the register of actions, does not, under the Code of Civil Procedure of California, sec. 581, operate as a dismissal of the action if no judgment of dismissal was ever made or entered by any order of the court made in relation to the matter of abandonment. Barnes v. Barnes, 95 Cal 171, 16 L. R. A. 660, 30 P. 298; Rochat v. Gee, 91 Cal. 355, ...