Perry v. Baker

• Decision Date: 22 May 1901
• Citation: 86 N.W. 692,61 Neb. 841
• Parties: PERRY v. BAKER ET AL.
• Court: Nebraska Supreme Court

61 Neb. 841

86 N.W. 692

PERRY

v.BAKER ET AL.

Supreme Court of Nebraska.

May 22, 1901.

Syllabus by the Court.

1. A judgment for defendant upon sufficient pleadings and evidence will not be reversed because another judge of the same court had, before the trial, sustained a general demurrer to the answer, the answer having been amended by leave of court after ruling on the demurrer; and this is the rule although no evidence is offered on the trial sustaining the allegations brought into the answer by such amendment.

2. If a mortgagee or the assignee of a mortgage whose assignment is recorded buys the land at sheriff's sale upon a prior lien, and is credited by the sheriff with the mortgage, which he appears to own as disclosed by the record, a part of which is allowed by the sheriff on the purchase price of the land, and such purchaser afterwards quitclaims all interest in the land, this will be equivalent to payment by the mortgagor to the original mortgagee.

3. And in such case an innocent purchaser of the land from the grantee in said quitclaim deed will take the land free from the lien of the mortgage as against the holder of the note secured by such mortgage, although such holder is an innocent purchaser thereof. Whipple v. Fowler, 60 N. W. 15, 41 Neb. 675.

Appeal from district court, Greeley county; Thompson, Judge.

Bill by John Perry, as receiver, etc., against Achilles Baker and others, for the foreclosure of a mortgage. From a judgment in favor of defendants, plaintiff appeals. Affirmed.Bell & Robinson, for appellant.

W. T. Thompson, for appellees.

SEDWICK, C.

This action was brought to foreclose a mortgage given by defendant Baker and wife to Mary E. Kelley on land in Greeley county to secure a negotiable note for $800. The mortgage was subject to a mechanic's lien for materials sold Baker prior to the execution of the mortgage. Mary E. Kelley indorsed the note in blank, and delivered it to A. E. Cady, together with an assignment of the mortgage. The assignment was duly recorded. Afterwards, on the 5th day of May, 1890, Mr. Cady sold and delivered the note to the National Bank of Kansas City. The bank was an innocent purchaser of the same; and this plaintiff, who is receiver for said bank, and is seeking to foreclose this mortgage, holds this note as an innocent purchaser for value. The mechanic's lien on the premises was foreclosed, the decree being regularly entered in the district court of Greeley county on the 13th day of October, 1891. At the time of the commencement of the mechanic's lien foreclosure, the mortgage sued upon herein, and the assignment to Cady, were of record in Greeley county, and Cady and Mary E. Kelley were made parties defendant to the foreclosure proceedings. On the sheriff's sale under the decree Cady purchased the property, and the surplus proceeds of the sale, amounting to $638.43, was treated as belonging to Cady, and allowed him by the sheriff on his bid; the money never having passed through the hands of the sheriff. Afterwards Cady and his wife conveyed the land by quitclaim, and the defendant Jensen derived his title from Cady through mesne conveyances, all of which were warranty deeds. Mr. Jensen purchased the land for full value, and without any actual notice of the mortgage sued on, the deed to him being a warranty deed; and Jensen took possession of the premises on the 4th day of April, 1895, immediately upon receiving his deed, and has ever since had possession. The petition was in the ordinary form of a mortgage foreclosure, alleging also that the bank was an innocent purchaser of the note; and the answer admitted these allegations of the petition, and states the foregoing matters in defense: Defendant Rounds claims under a mortgage executed by a grantee of Cady, and the title of defendant Jensen is subject to her mortgage. The district court found generally in favor of the defendants, ordered the plaintiff's mortgage canceled, and quieted the title in Jensen, subject to the mortgage of the defendant Rounds. From this decree the plaintiff appeals.

1. It appears from the record that the plaintiff filed a general demurrer to the defendants' answer on the ground that it did not state facts sufficient to constitute a defense, which was sustained by the court. The defendants then took leave to amend their answer instanter, and amended by interlining the allegation that the bank did not become the owner of the note and mortgage until after the commencement of the mechanic's lien foreclosure. To this answer so amended the plaintiff filed a reply, and upon trial the undisputed evidence shows that the bank did become the owner of the note and mortgage on the 5th day of May, 1890, which was before the commencement of the mechanic's lien foreclosure, and the plaintiff now insists that the ruling of the court upon the demurrer determines the law of the case to be that the defendants have no defense in this action unless they make it appear from the evidence that Cady was the owner of the mortgage at the time of the mechanic's lien foreclosure, and, as the defendants have failed in that respect, the decree must, for that reason, be in favor of plaintiff. We think this position is untenable. In Richman v. Supervisors (Iowa) 42 N. W. 422, 4 L. R. A....