Marshall v. Thompson
| Citation | 39 N.W. 309,39 Minn. 137 |
| Parties | William R. Marshall v. Horace E. Thompson and others |
| Decision Date | 28 August 1888 |
| Court | Supreme Court of Minnesota (US) |
Plaintiff brought this action in the district court for Ramsey county, in March, 1886, against the devisees of the late Horace Thompson, (who died January 28, 1880,) to have a certain deed bearing date November 15, 1876, from plaintiff to one William Fry adjudged to be a mortgage, and given as security for a debt then owing from plaintiff to Thompson and for an accounting and redemption. The action was tried by Brill, J., who ordered judgment for defendants, from which judgment the plaintiff appeals.
The judgment must be reversed, and the case remanded for new trial.
Bigelow Flandrau & Squires, for appellant.
Harvey Officer and Geo. B. Young, for respondents.
It is admitted that the relation of mortgagor and mortgagee existed between the plaintiff and Horace Thompson, since deceased, on the 25th day of August, 1876, and that the plaintiff then held the legal title of the mortgaged premises, and that Thompson held a mortgage thereon to secure the note of plaintiff, then overdue, for $ 4,000, and interest at 10 per cent., upon which there was on that day a payment made of $ 1,000, derived from a sale of a portion of the premises. On the 15th day of November following there was found to be due thereon the sum of $ 3,200. The pleadings and records introduced in evidence show that the plaintiff executed a deed, with full covenants, of the lands in question, to one William Fry, the consideration named being $ 3,200, and that Fry executed a mortgage of the same land to Thompson to secure the same sum, with interest at 10 per cent., payable in three years, evidenced by his promissory note. These instruments are both in the handwriting of the plaintiff, and bear date November 15, 1876. On the 28th day of August, 1877 Fry, together with his wife, executed a quitclaim deed of the mortgaged premises to Thompson, and it appears by the defendants' evidence that Thompson surrendered Fry's note to him about a year later, and that subsequent to the conveyance of Marshall, and prior to the execution of the quitclaim by Fry to Thompson, the latter had agreed to indemnify Fry against personal liability upon the note, and also upon certain conditions agreed to allow him profits upon the sale of the land, and to execute releases in case of sales. There is no evidence, however, in the case tending to show that Marshall knew of or consented to the surrender of the note to Fry, or to the agreement last referred to, to which, however, there is no reference in the findings of the court. The findings are not as full or specific as might be desired, but it appears thereby that the deed and mortgage first above named were executed in pursuance of the mutual agreement of the three parties, and the note of Marshall was thereupon surrendered up to him by Thompson; and there is no question upon the evidence that it was all one transaction. The general finding of the court "that the allegations in the pleadings, save as aforesaid, are not established," includes a finding upon the issues raised by the reply to the answer that Fry paid no consideration for the deed of plaintiff to him, and received none whatever from Thompson for the quitclaim deed executed to him, unless the subsequent voluntary surrender of his note, against which he was already indemnified, is to be treated as a consideration received. It is true, the court states that the new arrangement for securing Thompson by the deed to Fry and his mortgage was "in consideration of the satisfaction and surrender of said [Marshall's] note." If by this anything more than the cancellation and surrender of the note was intended, then it is so far entirely unsupported by the evidence, which shows that the new arrangement was a mere substitution of new securities for the same debt, made at Thompson's suggestion, to help Marshall, and to protect himself, and, as he supposed, to avoid the ultimate necessity of foreclosure. The pleadings admit that at the time of the execution of these instruments prices of real estate of this character in Ramsey county were much depressed, "and that it was generally regarded as impracticable at that time to dispose of such lands at anything like their fair value." And defendants' evidence showed that such depression continued until 1878, or later, in which year they also show that the plaintiff filed a petition in bankruptcy. The evidence also tended to show that he was financially embarrassed from July, 1876, till 1879. In respect to the nature and purpose of the agreement referred to by the court, the evidence, which is entirely undisputed on this point, shows that plaintiff was unwilling to surrender his equity of redemption in the land, but did consent to the arrangement agreed on, being in substance that Fry, who was a mutual friend, should, as a matter of trust and confidence, be formally invested with the legal title, and that the time of payment should be extended, and plaintiff's equity of redemption recognized and preserved. Upon the evidence in the case Fry was not in a proper sense a purchaser of the land, but a mere depositary of the legal title, at the solicitation of Thompson and by the consent of the plaintiff. He paid nothing and received nothing. So between him and Marshall the relations were substantially the same as that of the parties in the case of Madigan v. Mead, 31 Minn. 94, (16 N.W. 539.) So that if Marshall had subsequently satisfied the debt, or the land had been sold for more than sufficient to pay it, he would have been entitled to redeem or to an accounting. The plaintiff's rights must be determined by the character of the original transaction of November 15, 1876. There...
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