Redin v. Branhan

• Decision Date: 16 May 1890
• Citation: 45 N.W. 445,43 Minn. 283
• Parties: REDIN v BRANHAN ET AL.
• Court: Minnesota Supreme Court

43 Minn. 283

45 N.W. 445

REDINvBRANHAN ET AL.

Supreme Court of Minnesota.

May 16, 1890.

(Syllabus by the Court.)

1. The cestui que trust is not a necessary party to an action by a third person to reach the trust property.

2. The assignor of a mortgage who covenants that it is unpaid is not a necessary party to an action against the assignee to have the mortgage adjudged to have been paid prior to the assignment.

3. The assignee of a paid mortgage of real estate takes it subject to the defense that it has been paid, although it is not satisfied of record.

4. A second mortgagee, though he has foreclosed under the power of sale, he having become the purchaser, may, notwithstanding the time to redeem has not expired, bring an action to have a prior mortgage adjudged paid.

Appeal from district court, Meeker county; BROWN, Judge.

Benton, Plumley & Healy and Kueffner & Fauntleroy, for appellants.

U. L. Lamprey and P. W. Locke, for respondent.

GILFILLAN, C. J.

So far as necessary to the decision of this case, the facts are, in brief, these. March 19, 1884, the defendant August Sallberg and one Lichtenauer were the owners of certain real estate, and executed a mortgage thereon to Gustave Willius to secure the sum of $6,000, according to the terms of certain promissory notes, which mortgage was duly recorded. Lichtenauer then conveyed his interest in the real estate to Sallberg. After the recording of that mortgage and that conveyance, and on March 3, 1885, Sallberg executed a mortgage on a part of the real estate to plaintiff to secure the sum of $4,000, which mortgage was duly recorded. May 27, 1887, Willius assigned his mortgage to one Johnson, and June 6, 1887, Johnson assigned to the defendant Branhan; this last assignment containing a covenant that there was $5,000 still owing on the mortgage. Both these assignments were duly recorded. Before the assignment to Johnson the notes which the mortgage to Willius was given to secure were overdue, and they had been fully paid. August 12, 1887, plaintiff foreclosed his mortgage under a power of sale contained in it, and at the sale became the purchaser. After this, Branhan commenced a foreclosure of the Willius mortgage under a power of sale contained in it. These facts are alleged in the complaint, and found by the court below upon a trial. The action is to enjoin defendants' foreclosure proceedings, and have the Willius mortgage adjudged paid and satisfied. The defendant Branhan at first demurred to the complaint on the grounds that it does not state facts sufficient to constitute a cause of action, and that there is a defect of parties defendant, in that Johnson and the National German-American Bank should have been joined as defendants. The demurrer was overruled, and Branhan answered. Passing the point made by respondent, that, by answering, the appellant waived his right to complain of the decision on his demurrer, we do not see any basis for the suggestion that either the bank or Johnson ought to have been made a party defendant. As to the bank, it appears, both by the complaint and the findings of fact, that the notes and mortgage were executed to Willius to secure an indebtedness due to the bank, and also an indebtedness due to another firm, and when collected Willius was to pay the amount collected upon such indebtedness. The most that can be claimed upon this is that Willius was trustee for the bank and the other firm, and that first Johnson, and then Branhan, upon receiving an assignment of the notes and mortgage, became trustee. The cestui que trust may be a proper, but he is not a necessary, party to an action by a third person against the trustee to reach the trust property, or to set aside or cancel the trust-deed. Winslow v. Railroad Co., 4 Minn. 313, (Gil. 230.) The bank was therefore not a necessary party. The only claim that Johnson was a necessary party must be based on the fact that in his assignment to Branhan he covenanted that there was a certain amount due on the notes and mortgage. But after he had assigned the notes and mortgage he was no party to them; had no interest, legal or equitable, in them; he could not be bound by the judgment, unless he should be required by Branhan, under the covenant, to defend the action; and in that case he might defend in the name of Branhan, without being a party to the record. His case is not materially different from that of a grantor of real estate who warrants the title. He would not be a necessary party to an action by a third person against his grantee to recover the property. The point is made by appellant that, although the notes and mortgage had been paid, the latter, not being satisfied of record, is good as to Branhan, a purchaser for value and without notice. How he could be a bona fide purchaser after the notes, by their terms, were past due, it is hard to see. But...