Muller v. McCann

• Decision Date: 13 July 1915
• Docket Number: 4978. [a1]
• Citation: 151 P. 621,50 Okla. 710
• Parties: MULLER v. MCCANN ET AL.
• Court: Oklahoma Supreme Court

151 P. 621

50 Okla. 710

MULLER v. MCCANN ET AL.

No. 4978. ^[a1]

Supreme Court of Oklahoma

July 13, 1915

Syllabus by the Court.

The remedy subsisting in a state or territory when and where a contract is entered into and to be performed is a part of the obligation, and especially is that true when the particular remedy is agreed upon and clearly expressed in the contract and any subsequent law of such state or territory which so effects that remedy as to substantially impair and lessen the value of the contract is in violation of section 10, art. 1 of the Constitution of the United States, which provides that no state shall pass any law impairing the obligations of a contract, and therefore void.

Under section 4759 of Mansfield's Digest of the Laws of the state of Arkansas, which was in force in the Indian Territory before statehood, all sales of real property under mortgages and deeds of trust for less than two-thirds of the appraised value, and within less than one year from the date of the said appraisement, are void.

Under the decisions of the Supreme Court of the state of Arkansas which were effective in the Indian Territory before statehood, it was the established rule in equity that a mortgagee of real estate, with power of sale, was not allowed to purchase the property directly or indirectly for his own benefit at such sale, and if the sale be made with fraud or partiality to the creditor, and with unfairness and oppression toward the mortgagor, and to his injury, such sale would, on proper showing, be set aside.

In such sales a person purchasing an interest in land takes with constructive notice of whatever appears in the several conveyances constituting the chain of title, and if anything including quitclaim deeds, appears in such conveyances, sufficient to put a prudent man on inquiry, which, if prosecuted with ordinary diligence, would lead to actual notice of some right or title in conflict with that which he is about to purchase, it is his duty to make inquiry, and if he does not do so, he is guilty of bad faith or neglect, and the law will charge him with the actual notice he would have received, if he had made it, and in such case he would not be entitled to protection as a bona fide purchaser.

Commissioners' Opinion, Division No. 4. Error from District Court, Pittsburg County; W. C. Liedtke, Judge.

Action by H. J. Muller against Madeline McCann, née Guillaume, and another. There was a judgment for defendants, and plaintiff brings error. Reversed and remanded.

Wm. S. Rogers and Robert N. McMillen, both of McAlester, for plaintiff in error.

W. J. Horton and R. A. Smith, both of McAlester, for defendants in error.

ROBBERTS C.

This action was originally filed in the superior court of Pittsburg county, Okl., on the 12th day of September, 1911, and was thereafter, upon the abolishment of that court, transferred by operation of law to the district court of Pittsburg county, Okl. The action is to set aside a mortgage foreclosure deed, and also conveyance to second grantee, who claims to be a bona fide purchaser. The case was decided on general demurrers to the petition. In order to get a full understanding of the case, we submit the pleadings.

The allegations of plaintiff's petition are, in substance, as follows:

(1) That the defendant Madeline McCann is the same person as Madeline Guillaume hereinafter referred to, the said Madeline Guillaume having married McCann.

(2) That on the 2d day of August, 1907, the plaintiff was the owner of lot 8 in block 324, South McAlester, Ind. T., now McAlester, Okl., and on said date executed to defendant Madeline McCann a mortgage covering said property to secure the payment of a note in the sum of $1,000, payable to said defendant. Said mortgage is in words and figures as follows:

"Know all men by these presents: That Henry J. Muller and his wife, of McAlester, I. T., for and in consideration of one thousand dollars to him in hand paid by Madeline Guillaume, of McAlester, I. T., the receipt whereof is hereby acknowledged, has granted, bargained, and sold, and does hereby grant, bargain, sell, and

convey, unto the said Madeline Guillaume and her heirs the following described lot or parcel of ground in the Choctaw Nation, Indian Territory, and the city or town of South McAlester, to wit: Lot numbered eight (8) in block numbered three hundred twenty-four (324). To have and to hold unto the said grantee, Madeline Guillaume, her heirs and assigns, together with all the appurtenances in fee simple forever.

And I, for myself and my heirs, executors, and administrators, hereby covenant to and with the said grantee, Madeline Guillaume, her heirs and assigns, that I am lawfully seised in fee of the said premises, that they are free of all incumbrances, that I have good right to sell and convey the said property aforesaid, and that I will, and my heirs, executors, and administrators shall, warrant and defend the same against the lawful claims and demands of all persons whomsoever, and I, wife of the said ______, join in this conveyance, and for the consideration aforesaid do hereby release and relinquish and quitclaim unto the said ______, heirs and assigns, all my right, claim, or possibility of dower and homestead in or out of the hereinbefore described premises.

This grant and conveyance is subject, however, to such conditions that whereas, Henry J. Muller is indebted to the said Madeline Guillaume, in the sum of $1,000.00, evidenced by one certain promissory note of even date herewith, payable to the order of the said Madeline Guillaume, due on the 2d day of January, 1911, with interest at the rate of eight per cent. per annum, payable annually to the said Madeline Guillaume:

Now, therefore, if the said grantor shall well and truly pay or cause the said note and all interest to be paid at maturity, then this grant and conveyance shall be taken and considered as null and void.

It is expressly stipulated that the said grantor pay all taxes and assessments upon the premises within the time prescribed by law, and shall keep the buildings of said premises insured against loss or danger by fire in some approved fire insurance company; loss, in a sum not less than six hundred dollars, if any, payable to the said grantee, or heirs or assigns, as his or their interest may appear.

It is further stipulated that if the said grantor shall neglect, fail, or refuse to pay such taxes, or to effect and maintain such insurance, the said grantee or his assigns may do so, and the sum so expended shall be taken as a part of the indebtedness, with interest at the rate of ten per cent. per annum, intended to be hereby secured.

And it is further stipulated that if default be made in the payment of said note or the interest or the taxes, or in effecting the insurance or any part of either, or if waste be committed on or improvements are removed from the land without the written consent of the grantee or his assigns, the whole of the sums intended to be hereby secured to become immediately due and payable, and it shall be lawful for the said grantee, his agent or attorney, or his assigns, or their agents or attorneys, at any time after such default or acts, to sell the said premises or any part thereof at the outer entrance of the United States courthouse in McAlester, in the Central district, Indian Territory, at public auction, to the highest bidder, for cash in hand, after having given twenty days' notice of the time, place, and terms of sale by publication in some newspaper published in the said district at McAlester, and to apply the proceeds of such sale, first, to the payment of costs and charges of such sale, including a charge not exceeding ten per cent. for attending and making such sale, second, to the payment of the indebtedness, with interest, and the remainder, if any there be, to be paid to the grantor, or his legal representative. And the recitals of the deed of conveyance by said grantee or his assigns shall be taken as prima facie true.

And it is further provided that in case foreclosure of this mortgage in the court that the said grantee or assigns shall be allowed a reasonable attorney's fee, to be fixed by the court and taxed as other costs.

The grantor herein waives the statutory right of redemption.

In witness whereof we have set out hands and seals this 2d day of August, 1907.

Henry J. Muller."

(3) That on or about the 31st day of August, 1909, defendant McCann declared said debt under said mortgage due, and gave notice that she would, on the 21st day of September, 1909, sell said property under the power and terms of said mortgage for the purpose of satisfying said debt. Said notice was made a part of plaintiff's amended petition, and is in the words and figures following, to wit:

"Notice of Mortgage Sale.

State of Oklahoma, County of Pittsburg--ss.:

Whereas, on the 2d day of August, 1907, H. J. Muller did execute to me his promissory note for the sum of $1,000.00 for borrowed money, due January, 1911, with interest at the rate of 8% per annum, payable annually, which said note is secured by a mortgage executed by the said H. J. Muller upon lot eight (8) in block three hundred and twenty-four (324) in the city of McAlester (formerly South McAlester, I. T.), Okl., which mortgage provided that the said H. J. Muller pay the interest upon said note annually, and that in the event he should fail to pay the same annually then I might at my option declare the said note and interest all due and proceed to sell the said premises at public auction;

And whereas, the said H. J. Muller has made default in the payment of the said interest as provided in said note and mortgage:

Therefore, I do now declare the said debt to be due, and will on the 21st day of September,

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