Loy, for Use and Benefit of Union Securities Co. v. Kessler
| Decision Date | 26 August 1949 |
| Docket Number | 7153. |
| Citation | 39 N.W.2d 260,76 N.D. 738 |
| Court | North Dakota Supreme Court |
Rehearing Denied Oct. 19, 1949.
Syllabus by the Court.
1. Deeds executed in violation of Section 12-1714, RCND 1943 are void as to persons in adverse possession and their subsequent grantees.
2. The grantee of a grant of land held adversely to the grantor under a claim of title may maintain an action in the grantor's name against the party in adverse possession.
3. A rule of property long acquiesced in should not be overthrown except for compelling reasons of public policy or the imperative demands of justice.
4. A contract to do an act forbidden by express provision of law is unenforcible between the parties.
5. Under the provisions of Section 28-0737, RCND 1943, the court may before or after judgment, in furtherance of jutice and on such terms as may be proper, allow the amendment of any pleading by adding or striking out the name of any party and may permit the insertion of other allegations material to the cause. This section vests courts with a wide discretionary power in the matter of granting amendments to pleadings in furtherance of justice.
6. Where the trial court after answer and before trial permitted the grantee in a deed given in violation of Section 12-1714, RCND 1943, to amend his complaint by causing it to appear that the action was brought in the name of a grantor for the use and benefit of the grantee and by making appropriate and consistent changes in the allegations of the complaint to conform to the amended title, it is held that the court did not abuse its discretion in permitting the amendment.
7. Where, in an action to quiet title, the court permitted a grantee in a champertous deed to amend his complaint so as to show that the action was brought in the name of the grantor for the use and benefit of the plaintiff without making two defaulting defendants parties to the proceedings to amend, it was not error to permit the amendment without bringing in the omitted parties since it does not appear that the defendants so omitted were necessary parties to the determination of the issue between the plaintiff and the answering defendants.
8. For reasons stated in the opinion it is held that a demurrer to plaintiff's complaint on the ground that it does not state facts sufficient to constitute a cause of action and that the plaintiff has not legal capacity to sue was properly overruled.
9. The provisions of Section 12-1719, RCND 1943, which prohibit a person from buying or being interested in buying any evidence of debt or thing in action with intent to bring suit thereon, does not apply to a transaction unless it appears that the property was acquired with intent to bring suit.
10. A grantee may maintain an action for his use and benefit in the name of his grantor under a deed violative of Section 12-1714, RCND 1943, which purports to 'convey, grant, remise, release, and quit claim' the property in question to the grantee.
11. A tax title claimant may not rely on estoppel as a bar to an action to quiet title where it does not appear that in acquiring his tax title he was induced to act or refrain from acting by a belief in or reliance on any words, acts or silence of the party against whom he seeks to invoke the estoppel.
12. Where a use plaintiff obtained a champertous deed on July 24, 1941 which was recorded January 19, 1944 and an action to quiet title thereunder was commenced June 22, 1945; it is held that delay in recording the deed or commencing the action does not warrant a tax title claimant in invoking laches as a bar to the action.
13. Chapter 10-06, RCND 1943 (the Corporate Farming Law), does not prohibit corporations from acquiring title to farm lands.
14. Where a notice of expiration of period of redemption is issued by the county auditor upon a tax certificate acquired by th county at tax sale, the inclusion in a lump sum therein claimed to be due, of taxes which have been delinquent for less than three years prior to the service of the notice, renders the notice invalid and a tax deed issued thereon void.
Mackoff, Kellogg & Muggli, Dickinson, and Floyd B. Sperry, Golden Valley, for defendants and appellants.
W. H. Esterly, Beulah, and Sullivans, Kelsch & Lord, Mandan, for plaintiff and respondent.
This action was commenced by the Union Securities Company, a corporation, to quiet title to eighty acres of land in Mercer County against five defendants. Voegele and Mercer County defaulted. The defendants Kessler, Jack T. Helm and Gustav Helm answered setting up among other things that the deed under which plaintiff claimed title was champertous and void because it was given in violation of Sections 12-1714 and 12-1719, RCND 1943. The plaintiff then moved to amend the complaint by causing it to appear that the action was brought in the name of Theodore T. Loy for the use and benefit of Union Securities Company, a corporation plaintiff, and by making appropriate and consistent changes in the allegations of the complaint to conform to the new title, among them being the allegation, 'That at the time of the execution of said deed, one Ben Voegele, one of the Defendants herein, was in adverse possession of said premises, and that said Theodore T. Loy for the year immediately prior to the execution of said deed, had not collected the rents or profits from said premises, and had not been in possession thereof, and that the said Theodore T. Loy is bringing this action for the use and the benefit of the grantee of said deed, to-wit; Union Securities Company, a Corporation.'
The amendment was allowed after hearing and over the opposition of the defendant Kessler and the two Helms. Voegele and Mercer County being then in default were not served with the notice of motion and made no appearance in the proceedings concerning the amendment. They did not appear further in the action and judgment was not rendered against them. The defendant Kessler and the Helms demurred to the amended complaint upon the grounds that the plaintiff has not legal capacity to sue and that the complaint does not state facts sufficient to constitute a cause of action. The demurrer was overruled with leave to answer. They answered the amended complaint and set up several defenses. They first allege that Mercer County acquired a tax title to the property on the 1st day of October 1939 which it sold on contract to Ben Voegele in the fall of 1940. Voegele in turn sold his contract to the defendant Kessler, who pursuant thereto on the 10th day of November 1941, received a tax deed from the county. On the 8th day of March 1943, Kessler conveyed the property by warranty deed to the Helms.
The answering defendants further plead that the deed by which plaintiff claims title as use plaintiff and upon which the right to bring the action in the name of Loy is based, is a champertous conveyance and is void under the provisions of Section 12-1714 and 12-1719, RCND 1943. They also plead that the deed is void as being contrary to public policy and that the use plaintiff is barred from maintaining the action by estoppel and laches.
The trial court found against defendants upon all points wherein they challenge the right of the plaintiff to bring and maintain the action. He also found that the tax deed to Mercer County upon which the defendants' claim of title is based is void for failure to give a legal notice of expiration of the period of redemption, and ordered that title be quieted in the plaintiff. The defendants appeal from the judgment entered pursuant to this order and also appeal from and seek review of the intermediate orders allowing the plaintiff to amend the complaint and the order overruling the demurrer to the amended complaint.
The owner of the property in question in 1926 appears to have been one E. T. Hunkins, who failed to pay the taxes for that year and for subsequent years. The taxes were bid in by Mercer County. On May 18, 1939 the auditor of Mercer County issued a purported notice of expiration of period of redemption. The taxes were not redeemed on or before October 1, 1939 as prescribed in the notice of redemption. A tax deed was issued to the county on March 1, 1940, whereupon the county took possession and rented the property. On February 5, 1941 the county sold the property on contract to Ben Voegele who in turn sold his interest to the defendant Christ E. Kessler, who paid up all the taxes and received a deed from the county on November 10, 1941. On March 8, 1943, Kessler conveyed the property by warranty deed to Jack T. Helm and Gustav Helm.
On March 4, 1939 E. T. Hunkins, unmarried, executed a warranty deed to Theodore T. Loy. On July 24, 1941 Loy and his wife issued a quitclaim deed to Union Securities Company, a corporation. At the same time he delivered to the Union Securities Company his unrecorded deed from Hunkins. Both deeds were recorded on January 19, 1944. It does not appear that Loy ever took possession of the property. The Union Securities Company appears to have been represented in the various transactions connected with this land by R. G. Sailer, who was Secretary-Treasurer and General Manager of the corporation. In the spring of 1945 Sailer advised the defendant Jack T. Helm that he claimed an interest in the land. Later on May 24, 1945, plaintiff's attorney advised Mr. Helm by letter that the property belonged to Sailer.
We will first consider the points in which the defendants challenge the right of the plaintiff to bring this action. The amended complaint in effect pleads that the deed from Loy to the Union Securities Company is champertous as being violative of Section 12-1714, RCND 1943. The...
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