Pine Mountain Iron & Coal Co. v. Bailey

• Decision Date: 12 March 1898
• Citation: 87 F. 29
• Parties: PINE MOUNTAIN IRON & COAL CO. et al. v. BAILEY et al.
• Court: U.S. District Court — District of Minnesota

87 F. 29

PINE MOUNTAIN IRON & COAL CO. et al. v. BAILEY et al.

United States Circuit Court, D. Minnesota.

March 12, 1898

Richards Boskin & Ronald and Keith, Evans, Thompson & Fairchild, for complainants.

Wilson & Van Derlip, for defendants.

LOCHREN District Judge (orally).

The evidence shows that the plaintiffs, corporations of the state of Kentucky, on August 10 1892, at Louisville, Ky., entered into a written contract with John D. Blake, of Minneapolis, Minn., by the terms of which he was acquiring property rights, and on his part contracted to convey to plaintiffs, or one of them, real estate in Minnesota, and preferably in Minneapolis, to the amount in value of $100,000, the values to be affixed by appraisers, and that of this land there should be no part on which there should be mortgages for more than half the value and the mortgages on the whole should not aggregate more than $20,000 on the $100,000 worth of property. The appraisal was had, and on the 25th of October following he presented deeds to these companies, containing descriptions of the land which he offered them, and I suppose, also, of the incumbrances upon the lands, for among the descriptions was a statement of this mortgage of $17,200 to the Metropolitan Trust Company of Minneapolis, dated August 29, 1892. Objection was made to this mortgage, and a supplementary agreement was entered into between the parties at the time, upon which it was agreed that the reception of the deed should not prevent plaintiffs from objecting to the validity of this mortgage. I really do not understand how plaintiffs would be in a situation at that time to object to that mortgage if it had been delivered at the time it was dated, even though it was subsequent to their agreement in relation to those lands, because no particular land had been designated as the land to be conveyed. Blake was to select and have appraised and offer to plaintiff lands to the amount of certain values in Minnesota, but there was nothing to prevent him from selling any of the lands that he owned in the meantime. If the mortgages should exist, upon the lands offered above the amount that was stipulated, that would give the companies a right, of course, to refuse to accept such lands; but I do not see how it would invalidate any conveyances that Blake would make in the meantime whether mortgages or not. But he certainly would not have a right to put on mortgages after the deeds were made and accepted; and it appears that these deeds of Blake were given to these companies, or one of them, on the 25th of October, and this mortgage was not in fact delivered to the Metropolitan Trust Company until the 27th of October, some two days later, and was put on record that day. If the deed to the Pine Mountain Iron & Coal Company had been recorded promptly, it would probably have come in ahead of the mortgage, but that course was not taken. On the contrary, the notice,-- Exhibit L., or Exhibit I,--

Mr. Keith: The deed was recorded the next day after that notice. It was recorded on the 28th.

The Court: This notice it is not needful to dwell upon. It is somewhat vague. It does not state in any way the rights of the Pine Mountain Iron & Coal Company to this land, or any reason why they have a right to object to the giving of any incumbrances upon it by Mr. Blake. But the testimony goes further than that. These contracts, or some of them, were sent to Mr. Moore, reaching him the following day, and he had another interview with the Metropolitan Trust Company upon that day, in which he claims to have notified them more particularly in relation to the rights of the Pine Mountain Iron & Coal Company in respect to these lands. It seems to be admitted that at this time no consideration for that mortgage was paid by the trust company to...