Morris v. McKnight

• Decision Date: 03 June 1890
• Citation: 1 N.D. 266,47 N.W. 375
• Parties: Morris v. McKnight et al.
• Court: North Dakota Supreme Court

1 N.D. 266

47 N.W. 375

Morris

v.McKnight et al.

Supreme Court of North Dakota.

June 3, 1890.

Syllabus by the Court.

1. An action in equity to set aside foreclosure proceedings as constituting a cloud on plaintiff's title cannot be maintained where such foreclosure proceedings are void on the face of the record.

2. To enable a party, claiming as assignee of the mortgagor, to foreclose a mortgage upon real estate in this state by advertisement, the record must satisfactorily show the legal title to the mortgage to be in the assignee.

3. Where a mortgage upon real estate was executed to “Beecher & Dean,” and subsequently one Charles R. Dean assigned his interest in such mortgage to one Salmon I. Beecher, which assignment was duly recorded, and thereafter Salmon I. Beecher assigned said mortgage to George S. Barnes, which assignment was also duly recorded, and said Barnes assigned to Elizabeth McKnight, and which last assignment was also recorded, and said Elizabeth McKnight proceeded to foreclose by advertisement, held, that the record did not show that the legal title to said mortgage had ever passed from “Beecher & Dean,” and such foreclosure was void on the face of the record.

Appeal from district court, Cass county; William B. McConnel, Judge.

Action in equity to cancel of record and declare illegal and void a certain proceeding by advertisement for the foreclosure of a mortgage on real estate as constituting a cloud upon plaintiff's title. Decree for plaintiff granting the relief prayed, and defendants appeal.

Templeton, J., dissenting.

Francis & Southard, ( Thomas & Davis, of counsel,) for appellant. Ball & Smith, for respondent.

Bartholomew, J.

There is, in this case, no controversy as to the facts, both parties accepting the findings of the court. These are, in substance, that plaintiff is the owner of the land in controversy subject to a certain mortgage dated September 14, 1882, executed by the defendant, Eugene V. McKnight, the then owner of the land, to “Beecher & Dean,” and subject to the rights of the defendant Elizabeth McKnight, as the assignee of said mortgage, or by virtue of the foreclosure thereof; that the mortgage given by said Eugene V. McKnight to “Beecher & Dean” contained the usual power of sale; that the same was recorded in Cass county, October 3, 1882; that on January 4, 1884, one Charles R. Dean assigned in writing all his interest in said mortgage to one Salmon I. Beecher, which assignment was duly recorded in said county January 9, 1884; that on September 3, 1885, Salmon I. Beecher, by writing indorsed on said mortgage, duly assigned the same to one G. S. Barnes, and this assignment was duly recorded in said county November 13, 1885; that on September 29, 1885, George S. Barnes, by written instrument, duly assigned said mortgage to the defendant Elizabeth McKnight, and that said assignment was duly recorded in said county November 13, 1885; that the foregoing are the only assignments that were ever made relating to or affecting said mortgage or the notes secured thereby. Elizabeth McKnight proceeded to foreclose by advertisement. Her notice contained the necessary statutory requirements, and alleged that the interest of said Dean in said mortgage was assigned to said Beecher, and said mortgage was assigned by said Beecher to George S. Barnes, and by George S. Barnes to Elizabeth McKnight. The notice was published in the proper county for the proper time, and on January 29, 1886, said land was sold under said mortgage, in pursuance of said notice, by the deputy sheriff of Cass county, and bought by Elizabeth McKnight, and the usual certificate issued to her, and said notice and certificate duly recorded in said county. On these facts the court found the foreclosure proceedings to be void, and canceled the certificate as constituting a cloud on plaintiff's title. The trial court held that as no assignment of the mortgage had ever been executed by “Beecher & Dean,” or, so far as the record showed, with their knowledge or consent, or that of either of them, there was nothing to show that they had ever parted with their title to or interest in the mortgage, and hence that plaintiff could not acquire any interest which Beecher & Dean might have as mortgagees by redeeming from the foreclosure sale to Elizabeth McKnight; that in order to pass title to real estate by foreclosure by advertisement, the record must show a chain of title from the mortgagor to the purchaser at the foreclosure sale, and that the record in this case showed no such chain, hence the foreclosure was invalid; but that the same constituted a cloud on plaintiff's title, and should be vacated and canceled.

Appellants' counsel contend in this court that the trial court, in canceling the foreclosure proceedings under the circumstances, disregarded the well-established rule in equity, and which is also a statutory rule in this state, (Civil Code, §§ 2011, 2012,) to the effect that a court of equity will not entertain an action to cancel an instrument invalid on its face, or upon the face of another instrument necessary to the use of the former in evidence, for the reason that an instrument which thus carries its own infirmity on its face cannot constitute a cloud. The argument is this: Title under the foreclosure can only be asserted by tracing back through the assignments of the mortgage. Under the ruling such assignments are held to be insufficient in law to sustain the foreclosure by Elizabeth McKnight. Hence, every effort to assert the title exhibits its invalidity. We see no escape from this position, and, while the rule itself has been severely criticised, (see 3 Pom. Eq. Jur. p. 437,) yet, as it has legislative sanction in this state, we cannot regard the criticism. For the reason above stated a reversal will be necessary, but, in order to definitely determine the rights of the parties respectively, we must notice the other points in the case.

It is contended that the court erred in holding that the record must show a legal chain of title from the mortgagor to the foreclosure purchaser. In the broad sense of the words, perhaps, the position of counsel is correct, but, in the sense in which the court used...