Lindblood v. Warren Mining Co.

• Decision Date: 13 July 1923
• Docket Number: No. 23490.,23490.
• Citation: 194 N.W. 778,156 Minn. 317
• Parties: LINDBLOOD et ux. v. WARREN MINING CO. et al.
• Court: Minnesota Supreme Court

156 Minn. 317

194 N.W. 778

LINDBLOOD et ux.

v.WARREN MINING CO. et al.

No. 23490.

Supreme Court of Minnesota.

July 13, 1923.

Appeal from District Court, St. Louis County; C. R. Magney, Judge.

Action by John Lindblood and wife against the Warren Mining Company and another. Judgment ordered against plaintiffs, and from an order denying their motion for amended findings or a new trial plaintiffs appeal. Order affirmed.

Syllabus by the Court

The rule that evidence to justify the cancellation in equity of a formally executed written contract must be clear and convincing applied to an action to set aside a mortgage of real property on the ground of fraud, and the evidence presented held insufficient.

The evidence supports the findings of the trial court to the effect that a notice of mortgage foreclosure was duly served.

The official certificate of such service is not lightly to be set aside.

Where the husband is the owner of premises mortgaged to secure his debt, and the husband and wife reside thereon in amicable relations, with no right or interest in the wife other than such as the law grants to her by reason of such relation, service of notice of foreclosure upon her is unnecessary.

A party to an illegal executory contract, which by action of the parties and operation of law has become fully executed, is not entitled to relief therefrom in a suit in equity. In such situation equity will leave the parties where it finds them. Lewis & Hunt, of Duluth, and C. G. Anderson, of Hibbing, for appellants.

Crassweller & Crassweller and P. C. Schmidt, all of Duluth, for respondents.

BROWN, C. J.

Plaintiff John Lindblood, on October 31, 1908, was the fee owner of the property involved in this action, namely, lots 8 and 25 of block 6 of the town of Hibbing, St. Louis county, and on that day, his wife and coplaintiff joining, mortgaged the same to defendant Fitger Brewing Company to secure the payment of the sum of $5,500 then loaned to him by the company. The mortgage was duly recorded. Default having been made in the payments thereby stipulated, the mortgage was foreclosed by due proceedings had for the purpose, and at the sale therein on September 9, 1912, the mortgaged property was struck off and sold to the brewing company as the best bidder. The usual certificate of sale was executed and recorded. No redemption was made. A prior mortgage upon the same property had been given by plaintiffs to one Corey, which was subsequently acquired by the brewing company under an assignment from the mortgagee; the mortgage was for the sum of $3,500, no part of which has ever been paid. Again, on May 24, 1910, plaintiffs gave to the brewing company a second mortgage to secure a further loan in the sum of $2,400. A part fo the first mortgage had been paid prior to the foreclosure, leaving a balance then due of the sum of $3,436.75, principal and interest. The second mortgage remains unpaid. Subsequent to the expiration of redemption the brewing company leased the premises to plaintiff John Lindblood for a stipulated monthly rental. Following the foreclosure the brewing company paid all taxes and assessments levied against the property, and none thereof were paid by the Lindbloods. The company sold the property to defendant Warren Iron Mining Company on December 7, 1917, since which time that company, as owner, has paid the taxes. Its deed was duly recorded. Plaintiffs also leased the property from the new owner; at least the evidence justified the court in so finding. So far as disclosed by the record, plaintiffs, since the foreclosure, have not paid or offered to pay any part or portion of the mortgage indebtedness, apparently acting on the theory that their obligations in that respect were thereby terminated.

Thereafter and on September 21, 1921, plaintiffs, claiming the property as owners, brought this action to determine the adverse claims of defendants, thus challenging the validity of the foreclosed mortgage as well as the foreclosure proceedings. Issue was joined by the answers of defendants, and upon a trial before the court without a jury the court found that plaintiffs had no title or right to the property, and judgment accordingly was ordered against them. They appealed from an order denying their motion for amended findings or a new trial.

The facts stated and outlined are not in substantial dispute. The execution of the mortgage under the foreclosure of which defendants claim title is not questioned; nor is the fact of foreclosure controverted. The contentions made by plaintiffs are (1) that the mortgage was procured by fraud; (2) that the foreclosure is invalid and a nullity because no notice thereof was served on plaintiffs as required by law; and (3) that the mortgage is void and unenforceable for the reason that the consideration thereof was illegal, since the purpose thereof was to enable plaintiff John Lindblood to conduct a saloon and therein sell intoxicating liquor in forbidden Indian Territory, contrary to the laws and treaties of the United States applying to such territory.

1. There was no direct finding by the trial court upon the question whether the mortgage was procured by fraud or fraudulent representations. But the question whether the evidence sustains plaintiffs' contentions upon that issue is presented by the denial of their motion for an affirmative finding of fraud. Our examination of the record leads to the conclusion that the evidence fails to sustain the allegations of fraud, and the court therefore was right in refusing the requested finding. The mortgage included the lots in suit together with certain lands in the state of Michigan. Mrs. Lindblood testified that she did not understand that the lots were included, yet the trial court was justified in finding that she made no inquiry on the subject, relying wholly upon her husband as to the contents and purpose of the mortgage; and the record discloses no representation to her from any one acting in the transaction for the mortgagee. She apparently had confidence in her husband, and did not seek independent information. Dobbin v. Cordiner, 41 Minn. 165, 42 N. W. 870,4 L. R. A. 333, 16 Am. St. Rep. 683. That the...