Martin v. Hickenlooper

• Decision Date: 10 January 1935
• Docket Number: 5424
• Citation: 90 Utah 130,40 P.2d 213
• Court: Utah Supreme Court
• Parties: MARTIN v. HICKENLOOPER et al

40 P.2d 213

90 Utah 130

MARTIN v. HICKENLOOPER et al

No. 5424

Supreme Court of Utah

January 10, 1935

This opinion superseded by opinion in 90 Utah 150, 59 P.2d 1139.

Appeal from District Court, Third District, Salt Lake County; Wm. H Bramel, Judge.

Suit by Brigham J. Martin against Clara C. Hickenlooper and others wherein defendant Mrs. W. Zorn filed a cross-complaint against C. H. Stoven and others. From the judgment, plaintiff and named cross-defendant and another appeal.

REMANDED, with directions.

Vernon Snyder and H. Van Dam Jr., both of Salt Lake City, for appellants.

Irvine Skeen & Thurman and A. R. Barnes, all of Salt Lake City, for respondents.

MOFFAT, Justice. STRAUP, C. J., and ELIAS HANSEN, FOLLAND, and EPHRAIM HANSON, JJ., concur.

OPINION

MOFFAT, Justice.

The relationship of the parties to the action will appear from a statement of the transactions out of which this cause arose. The Utah Savings & Trust Company is the receiver of the Fritsch Loan & Trust Company and is interested only as such receiver.

It appears that C. H. Stoven was the owner of the tract of land sought to be subjected to foreclosure of a mortgage back about the year 1921. On or about February 1, 1921, C. H. Stoven and Florence M. Stoven executed a promissory note and a mortgage securing the same to the state of Utah for the sum of $ 3,500.

On or about June 20, 1921, C. H. Stoven and wife conveyed the real estate and water rights so mortgaged to Clara C. Hickenlooper, subject to the mortgage to the state of Utah.

On or about June 20, 1921, and while Clara C. Hickenlooper was the owner of the property, subject to the mortgage to the state of Utah, she and her husband borrowed from the plaintiff Brigham J. Martin the sum of $ 2,500, giving therefor their promissory notes, one for $ 1,000 and one for $ 1,500 secured by a mortgage upon the real property only. The $ 1,000 note was subsequently paid.

On or about February 24, 1922, Clara C. Hickenlooper by deed conveyed the real estate and water rights subject to the mortgage of the state of Utah, also subject to the mortgage of the plaintiff, Brigham J. Martin, to the Fritsch Loan & Trust Company, a corporation.

On or about June 1, 1927, the defendant Fritsch Loan & Trust Company, a corporation, by its agent, secretary, and manager, W. H. Penner, represented to Mrs. W. Zorn, the defendant and cross-complainant, as alleged by her, that the said corporation was the owner of the real estate and water rights subject only to the mortgage in favor of the state of Utah, and told Mrs. Zorn that, if she would advance the sum of $ 3,500 to pay off and discharge the mortgage held by the state of Utah, the Fritsch Loan & Trust Company would give to her a mortgage upon the whole of said properties which mortgage would constitute a first and prior lien on the real property and water rights, and the whole thereof.

On June 1, 1927, in pursuance of the representations of the Fritsch Loan & Trust Company, as further alleged, Mrs. W. Zorn paid to the state of Utah the sum of $ 3,500, and thereupon the state of Utah made and executed a release of its mortgage, which release was on June 3, 1927, recorded in the office of the county recorder of Salt Lake county, and the certificates evidencing the title to the water rights were delivered to the Fritsch Loan & Trust Company.

On June 1, 1927, the Fritsch Loan & Trust Company executed and delivered to Mrs. W. Zorn a promissory note in the sum of $ 3,500, and to secure the payment of said note gave to Mrs. W. Zorn a mortgage covering the real estate and water rights, and delivered to her the stock certificates evidencing the title or right to the water.

Upon substantially the foregoing statement of facts, which is in accordance with the pleadings, evidence was submitted, and the trial court found and concluded, that the mortgage of Mrs. W. Zorn constituted a first and prior lien upon the real estate and water rights, said water rights being represented by certificate No. 125 for 21 shares of the capital stock of the South Despain Ditch Company, certificate No. 63 for 20 shares, and certificate No. 52 for 2 shares of the North Dry Creek Irrigation Company. The court further found and concluded that the mortgage of the plaintiff and cross-defendant Brigham J. Martin was subject and junior to the mortgage of Mrs. W. Zorn; that Mrs. W. Zorn was entitled to be subrogated to all of the rights of the state of Utah under the mortgage given by the Stovens to the state of Utah.

Judgments were duly entered and orders of foreclosure made in accordance with the findings and conclusions of the court whereby Mrs. W. Zorn was given judgment against C. H. Stoven and Florence M. Stoven and Utah Savings & Trust Company, a corporation, as receiver for Fritsch Loan & Trust Company, in the sum of $ 3,739.15, principal and interest, with attorney's fees and costs. The plaintiff and cross-defendant Brigham J. Martin was given judgment against the defendant and cross-defendant Clara C. Hickenlooper in the sum of $ 1,700, principal and interest, with attorney's fees and costs.

The mortgaged property was directed to be sold and the proceeds applied, first, to the costs and expenses of sale and attorney's fees, and, second, to the payment of the amount due to defendant and cross-complainant Mrs. W. Zorn and any overplus to the plaintiff and cross-defendant Brigham J. Martin, and then any further overplus to C. H. and Florence M. Stoven, Clara C. Hickenlooper, and the Utah Savings & Trust Company in the order named.

The plaintiff and cross-defendant Brigham J. Martin and the cross-defendants C. H. Stoven and Florence M. Stoven appeal.

The errors assigned are numerous, some of them relating to the admission and exclusion of evidence, some of them challenging the findings on various grounds, and some because of failure to make findings. The gist of all the errors assigned may properly be converted into the question of the priority of the liens as between the plaintiff and cross-defendant Brigham J. Martin and the defendant and cross-complainant Mrs. W. Zorn.

The record discloses that the plaintiff, Brigham J. Martin, filed his complaint in the district court of the Third judicial district making all the other parties defendants except the Stovens, on the 24th day of October, 1931. All parties defendant were duly served with summons either personally or by publication or both.

On the 25th day of February, 1932, the defendant Mrs. W. Zorn filed her petition asking for an order to make C. H. Stoven and Florence M. Stoven parties, and on the same day filed her answer and cross-complaint setting forth the claim and alleging her right to be subrogated to the mortgage made by C. H. Stoven and Florence M. Stoven, his wife, to the state of Utah on the 1st day of February, 1921, and setting forth that the money loaned by her to the Fritsch Loan & Trust Company was for the purpose of paying off the state mortgage, and that she was to have a first mortgage.

The state mortgage was to run for five years, and was one year past due when it was paid with the money loaned by Mrs. Zorn to the Fritsch Loan & Trust Company.

Aside from the documentary evidence contained in the notes, mortgages, a check of the state land board and abstract of title, most of the facts, having been stipulated as to dates, recording, and execution of documents and parties concerned, consist of the uncorroborated evidence of Mrs. W. Zorn.

The substance of her testimony is to the effect that she had known Mr. Penner, manager of Fritsch Loan & Trust Company, since about 1916; that in May, 1927, she had a conversation with Mr. Penner relative to lending the Fritsch Loan & Trust Company a sum of money; that a second conversation about a week later was had June 1, 1927, with Mr. Penner at the company's office, when Mr. Green, the bookkeeper, was present, as she remembered. (Mr. Green denied or failed to remember being present at any such conversation.)

That

"He (Mr. Penner) said he got a farm--a loan on a farm for $ 3,500 on a farm, and he wanted to show me the place."

"Then on June 1, 1927 he took me up to the Capitol." "He said he would send me the first mortgage."

Mrs. Zorn further testified: That she did not know anything about the Martin mortgage. That Mr. Penner told her the state mortgage was a first mortgage. On May 19, 1927, Mrs. Zorn secured from Walker Bros. Bank & Trust Company a cashier's check for $ 3,500, payable to herself, which she indorsed to the State Land Board of the state of Utah and "turned it over to the state capitol to pay that mortgage." That about that time she received the abstract to the real estate, the water certificates, the note, and, shortly after, her mortgage of the Fritsch Loan & Trust Company for $ 3,500 after it had been recorded. That she had had the abstract in her possession all the time. That she first learned about the Martin mortgage when the foreclosure suit was brought. That she relied entirely upon, and trusted, Mr. Penner, and that he assured her he had his lawyer look it over. That Mr. Penner said, "Everything is all right." That she did not have the abstract examined by an attorney, nor did she examine it or the records in the county recorder's office, nor have them examined. That she had possession of the abstract since about June 1, 1927. That the interest on her note and mortgage had been paid by the Fritsch Loan & Trust Company.

That her mortgage had been recorded at her request June 13, 1927. That she had never received any canceled papers of the state's note or mortgage nor the release, nor any assignment of the state's mortgage, and that there was no written agreement relating to the matter of her being subrogated to the rights of ...