Quesner v. Novotny

• Citation: 215 N.W. 796,116 Neb. 84
• Decision Date: 21 October 1927
• Docket Number: 25649
• Parties: ERNEST QUESNER, APPELLANT, v. ROSIE NOVOTNY, APPELLEE
• Court: Supreme Court of Nebraska

215 N.W. 796

116 Neb. 84

ERNEST QUESNER, APPELLANT, v. ROSIE NOVOTNY, APPELLEE

No. 25649

Supreme Court of Nebraska

October 21, 1927

APPEAL from the district court for Cuming county: ANSON A. WELCH JUDGE. Reversed, with directions.

REVERSED.

George W. Wertz, W. M. Cain and Frank Dolezal, for appellant.

A. R Oleson, contra.

Heard before Goss, C. J., DEAN, DAY, GOOD, THOMPSON and EBERLY, JJ.

OPINION

DAY, J.

Ernest Quesner brought this action against Rosie Novotny and certain minor heirs of Emil and Rosie Novotny, and Rosie Novotny as executrix, to foreclose a real estate mortgage upon 160 acres of land in Cuming county. The petition was in the usual form. The answer interposed three defenses: First, that the mortgage was void because given upon a homestead and the acknowledgment taken before an officer and stockholder of the Howells State Bank, which, it is charged in the answer, was the real party in interest; second, that an action at law had been commenced to collect the debt secured by the mortgage and, third, that usury had been exacted.

This case was before us on a former occasion, being reported in 113 Neb. 827, in which the judgment of the district court, denying a foreclosure of the mortgage, was presented. At the outset, it was discovered the plaintiff had failed to introduce any evidence, in the trial court, sustaining the allegations that no proceedings at law had been commenced for the recovery of the debt. This was a necessary part of his proof under the statute and repeated decisions of this court. In the interest of justice, we remanded the cause to the district court to permit the plaintiff, if he chose, to adduce proof in support of his allegation that no proceedings at law had been commenced to collect the debt. This additional proof has been taken and we have the case now before us for consideration, de novo, upon all of the issues.

The record shows that on January 22, 1921, Emil Novotny, his wife, Rosie Novotny, and Thomas Novotny executed a note to the plaintiff for $ 10,000 payable one year after date with interest at the rate of 10 per cent. per annum from date until paid. On the same day Emil Novotny and his wife, Rosie, executed a mortgage in favor of plaintiff upon a quarter section of land in Cuming county to secure this note. The mortgage also covered another note for $ 2,200, but the latter note was paid and is not in controversy here. The mortgage was given upon the homestead of Emil Novotny and his wife. On March 10, 1921, Emil Novotny died leaving surviving him his widow, Rosie, and six minor children, named as defendants.

The mortgage was acknowledged before L. R. Coufal, a notary public who at the time was an officer and stockholder of the Howells State Bank. It is the contention of the defendant that, while the note and mortgage ran in favor of the plaintiff, the bank was the real party in interest and therefore Coufal was disqualified from taking the acknowledgement and the mortgage was void. We have frequently held that--"A mortgage upon a homestead, acknowledged by a notary who was likewise an officer and stockholder of the corporation, mortgagee, is invalid." Chadron Loan & Building Ass'n v. O'Linn, 95 N.W. 368, 1 Neb. Unoff. 1; Horbach v. Tyrrell, 48 Neb. 514, 67 N.W. 485; Trevett, Mattis & Baker Co. v. Reagor, 112 Neb. 470, 200 N.W. 449; Anderson v. Cusack, 115 Neb. 643, 214 N.W. 73. We think, however, the proofs in the present case failed to show that the bank was the real party in interest in the note and mortgage. It is true that Novotny was owing the bank, but the testimony shows the mortgage was given to borrow money from Quesner to pay off his debts to the bank. The defendants, in an argument, cast aspersion upon the bona fides of the transaction as being a personal loan made by plaintiff, but we think the evidence fully sustains plaintiff's theory that it was a personal loan made by him to Novotny, in which the bank had no interest. Under the facts disclosed by the record, Coufal was a qualified officer to take the acknowledgment to the mortgage.

It is next urged by defendants that plaintiff cannot prosecute proceedings to foreclose the mortgage because he has pending, in the county court, a claim involving the same debt, for allowance against the estate of Emil Novotny. The argument is made that, having elected to proceed against the estate, plaintiff thereby waived his mortgage security. The question presented involves an examination of the facts on this phase of the case.

As before stated, the mortgage was executed to plaintiff January 22, 1921. Novotny died March 10, 1921. On March 18, 1921 Quesner sold the note and mortgage to the Howells State Bank, which on June 22, 1921, filed a claim against the Novotny estate based on this note. This claim was withdrawn by the bank. Quesner repurchased the note and mortgage from the bank on March 27, 1922, and a few days later commenced a foreclosure proceeding. The record fails to show the date of the filing of the original petition, but an amended petition was filed May 6, 1922. On December 18, 1922, Quesner filed a claim against the Novotny estate, based on the $ 10,000 note, in which he stated, in substance, he had instituted proceedings to foreclose the mortgage, and that the district court...