National Investment Co. v. Nordin

• Decision Date: 01 July 1892
• Citation: 50 Minn. 336
• Parties: NATIONAL INVESTMENT CO. <I>vs.</I> CHARLES NORDIN <I>et al.</I>
• Court: Minnesota Supreme Court

50 Minn. 336

NATIONAL INVESTMENT CO. vs. CHARLES NORDIN et al.

Supreme Court of Minnesota.

Argued June 2, 1892.

Decided July 1, 1892.

Appeal by plaintiff, the National Investment Company, and cross appeal of defendants Charles Nordin and wife, from a judgment of the District Court of Ramsey County, Kelly, J., entered March 29, 1892.

Action upon a promissory note for $500 and interest, made by defendants Charles Nordin and Mary E. Nordin, his wife, October 1, 1889, payable to the order of plaintiff two years thereafter. The note was secured by their first mortgage upon a lot in St. Paul, owned by the wife. They soon after gave plaintiff another note for $600 and interest, and secured its payment by a second or junior mortgage on the same real estate. Plaintiff foreclosed this second mortgage by advertisement under the power therein, and bid in the property for the amount due on the last note, with interest and costs. Plaintiff now sought by this action at law to collect the first note from the makers. In the meantime the defendants conveyed the property by warranty deed to one N. Anderberg, who assumed and agreed to pay both of the mortgages. Anderberg conveyed it by warranty deed to A. N. Elliott, who likewise assumed and agreed to pay the mortgages. Elliott afterwards conveyed the property to Sarah Kingsley, who assumed and agreed to pay both the mortgages. Sarah Kingsley conveyed it to Charles G. Johnson, but in the last-named deed Johnson did not assume and agree to pay the mortgages, but the land was conveyed, subject to the two mortgages. Charles G. Johnson was the president of the plaintiff corporation, and the consideration for the conveyance to him was paid by the corporation and the conveyance made to him for the purpose of preventing a merger of the mortgages in the title to the premises. Plaintiff went into possession of the premises and remained in possession. The rental value was $30 per month.

Humphrey Barton, for defendants.

William G. White, for plaintiff.

DICKINSON, J.

The plaintiff is a corporation. The defendants executed to the plaintiff at different times two mortgages upon the same real estate owned by them, the senior mortgage being to secure the note of the mortgagors for $500, and the junior mortgage to secure their note for $600. This second mortgage was in terms made subject to the former mortgage. Both mortgages were recorded. The defendants then sold and conveyed the mortgaged premises to one Anderberg; the latter conveyed to one Elliott; and he in turn to one Kingsley. Each of the three last-named grantees, by covenants in the deeds of conveyance executed to them, respectively agreed, as a part of the consideration for the conveyance, to pay the two notes and mortgages. On the 20th of April, 1891, Kingsley sold and conveyed the premises to one Johnson, who was then, and still is, the president of the plaintiff corporation. This conveyance was made in terms subject to the mortgages. The corporation paid the consideration for that conveyance, and the title was taken in the name of Johnson for the purpose of preventing a merging of the mortgages in the legal title. The plaintiff went into and has remained in possession, and has collected rents since the time of the conveyance last mentioned.

For default in the payment of the debt secured by the second mortgage the plaintiff proceeded to foreclose the same, and at a foreclosure sale, May 26, 1891, itself bid off the property for the sum of $741.48.

This action is prosecuted to recover personally against the defendants on the note secured by the first mortgage. Judgment was directed and entered against them for the amount of that note, with the provision that upon payment of the same they should be subrogated to all the rights of the plaintiff in the...