Sailer v. Mercer County

• Decision Date: 08 November 1950
• Docket Number: No. 7154,7154
• Citation: 22 A.L.R.2d 988,45 N.W.2d 206,77 N.D. 698
• Parties: , 22 A.L.R.2d 988 SAILER v. MERCER COUNTY et al.
• Court: North Dakota Supreme Court

Page 206

45 N.W.2d 206

77 N.D. 698, 22 A.L.R.2d 988

SAILER v. MERCER COUNTY et al.

No. 7154.

Supreme Court of North Dakota.

Nov. 8, 1950.

Rehearing Denied Dec. 29, 1950.

Syllabus by the Court.

1. A plaintiff seeking to determine adverse claims and quiet title pursuant to the provisions of Chapter 32-17, R.C.1943 must recover, if at all, upon the strength of his own title and not upon the weakness of his adversary's title.

2. One who occupies and is in possession of land under a tax deed is in possession under color of title.

3. Possession under color of title is adverse and the occupant's title becomes material only when he who challenges it shows in himself a right superior to the right of the possessor.

4. The purchase of an assignment of a mortgage on land held adversely to the mortgagor under color of title is not champertous if the mortgage was executed while the mortgagor was in possession.

5. Section 12-1719 R.C.1943 does not render the purchase of a chose in action illegal unless it is shown that it was purchased with intent to bring suit thereon. The record in the instant case is examined and, Held, for reasons stated in the opinion that the purchase of the notes and mortgage here involved was made with intent to bring suit thereon contrary to the provisions of said Section 12-1719.

On Rehearing.

1. A third person may not take advantage of champerty as a defense in a suit brought by the original owner of a chose in action, but that defense is available to a third person in an action brought by a champertous assignee thereof.

2. Respondent made a champertous purchase of a note and the real estate mortgage securing the same. He foreclosed by action and procured a judgment in effect by default, no issue being raised as to the validity of the purchase. Pursuant to that judgment the mortgaged premises were sold, and respondent, purchasing at the sale, acquired a sheriff's deed under which he now claims. He then brought the instant action to quiet title against the appellant not a party to the foreclosure action who held adverse possession under color of title. Held: for reasons stated in the opinion, that since the contract of purchase was void, and appellant was not concluded by the judgment, as to her it was subject to collateral attack.

W. H. Esterly, Beulah, and Sullivans, Kelsch, & Lord, Mandan, for plaintiff and respondent.

Mackoff, Kellogg & Muggli, Dickinson, and Floyd B. Sperry, Golden Valley, for defendant and appellant.

NUESSLE, Chief Justice.

This is an action to quiet title. See Section 32-1701, Chapter 32-17, RC 1943. The defendant Smith answering, the other defendant defaulting, challenged the right of the plaintiff to bring the action on the ground that the plaintiff had no such right or interest in the land involved as to entitle him to bring the action. The case was tried to the court. Judgment was ordered and entered for the plaintiff. Whereupon Smith perfected the instant appeal.

The pertinent facts stated briefly are substantially as follows: G. R. Brainard owned a half section of land, the north half of Section 31, Township 146, Range 89 in Mercer County, North Dakota. In 1931, Brainard mortgaged this land to A. Bidwell, a resident of Freeport, Illinois, to secure a loan of $1,500 and interest. This loan was never repaid. Taxes for 1935 were not paid and the land was sold at tax sale. The county purchased and received a tax sale certificate therefor. In 1937, Brainard rented the land to Albert Miller who continued to rent it from him until 1942. In February, 1942, the certificate of tax sale for the year 1935 was sold and assigned to the defendant, Grace J. Smith. She at once instituted proceedings to procure a tax deed. Accordingly on February 27, 1942, notice of expiration of the period of redemption was issued by the county auditor. Brainard was then deceased, but a copy of this notice of expiration was mailed to his widow, Mrs. G. R. Brainard, as well as to Bidwell. This notice was also published in the local newspaper in the issues of March 5, 12, and 19, 1942. No redemption was made and tax deed was issued to Smith, June 12, 1942. On March 21, 1942, Smith, claiming the right of possession under her tax certificate, which claim was not resisted, rented the land to Miller, giving a written lease therefor.

On March 12, 1942, the plaintiff wrote to the Freeport Securities Company of Freeport, Illinois, as follows:

'I am interested in communicating with one A. Bidwell whose postoffice address is given as Freeport, Ill. This party apparently holds a mortgage against a half section land in Mercer County, N. Dak. on which the tax certificate holder is calling for a deed.

'I would appreciate if you could give me the full address of this party, or if deceased the name and address of the successors in interest, or administrators. * * *'

In response to this letter plaintiff received the following letter dated March 26, from Hunter & Hunter, attorneys of Freeport:

'We represent the party who holds the mortgage against the North half of Section 31, 146-89 located in Mercer County, North Dakota about which you inquired through the Freeport Securities Company of Freeport, Illinois.

'We are informed that the land has a value from $2.50 to $3.00 an acre and that there are approximately $171.00 taxes against it. There are other parties interested in this land and if you would care to make an offer for our mortgage we would be pleased to give it consideration.'

On May 12 thereafter, plaintiff wrote Hunter & Hunter:

'Referring to your letter of March 26th relative to the mortgage running to A. Bidwell I would pay $60.00 for a proper assignment of the mortgage and notes, at this time. I know this amount is small but it is my belief that a foreclosure on my part would involve litigation. If you have not disposed of the same I should be glad to see if some neighbor would be interested in paying more. If you wish to have me do so I will when in that vicinity ascertain if it is possible to obtain more.

'I would consider your information as to the value of the land about right. But I believe the total amount of taxes would be slightly more and then an additional two years taxes would accrue before title could be obtained. Also one poor crop together with the present 'war freezing' would set back the prices.

'If my offer is acceptable to you can send the papers with assignment in blank to me or the Union State Bank of Hazen for collection.'

On July 10, 1942, Hunter & Hunter wrote the plaintiff: 'Enclosed please find assignment of original mortgage of G. R. Brainard and wife to A. Bidwell, together with the mortgage and note and abstract for which we will expect to receive the sum of $60.00. We are sending the papers direct to you and not the bank for collection inasmuch as we are relying on your integrity to promptly forward it to me.'

This letter was received but the notes and mortgage were returned to Hunter & Hunter for endorsement and assignment. A new assignment was requested for the reason as stated by Sailer that he wanted it on a North Dakota form. This assignment was executed on July 27, 1942, and the notes, mortgage, and assignment were then returned to the plaintiff. The assignment was filed for record by plaintiff in the office of the register of deeds of Mercer County on August 26. The assignee therein named was Albert Miller. Whether he was thus named as assignee when the instrument was executed or his name was later inserted by the plaintiff does not appear, but the inference is justified that Miller's name was later inserted.

On July 18, 1942, plaintiff and Albert Miller entered into the following written agreement:

'That Whereas, R. J. Sailer is the owner of a first mortgage against the North Half (N 1/2) of Section Thirty-one (31) in Township One Hundred Forty-six (146), North of Range Eighty-nine (89) West in Mercer County, North Dakota, said R. J. Sailer, being the owner of said mortgage by virtue of an assignment of mortgage executed by A. Bidwell unto the said R. J. Sailer 'And Whereas, The said Albert Miller is desirous of becoming the owner of said mortgage, it is therefore agreed by and between the parties hereto as follows:

'That the said R. J. Sailer as party of the second part agrees to assign said mortgage unto said Albert Miller as soon as the notes which are secured by said mortgage have been properly endorsed and it is further agreed that foreclosure proceedings shall be immediately commenced in the name of the said Albert Miller; that in the event that said foreclosure proceedings are consummated and result in Sheriff's Certificate, that the said Albert Miller agrees to pay unto the said R. J. Sailer, the sum of Seven Hundred and no/100 ($700.00) Dollars. He shall, however, be allowed deductions for attorneys fee and unpaid real estate taxes and moneys to be advanced for the redemption of taxes, the amount of said taxes to be figured at $150.00.

'It is Further Agreed That in the event that the foreclosure proceedings should not be completed, it is agreed that the said Albert Miller will reassign said mortgage unto R. J. Sailer and said R. J. Sailer as party of the second part will then pay the costs incurred for attorneys fees, and so forth.

'It is Further Agreed That of the $700.00 hereinbefore referred to, that the said Albert Miller will pay the sum of $500.00 to R. J. Sailer when Sheriffs Certificate is issued, and the balance of $200.00 on or before the 1st day of October, 1943.'

In March, 1943, notice of intention by Miller to foreclose the mortgage in question was served upon the defendant Smith. Smith knew there was an outstanding mortgage to Bidwell on record but had no notice or knowledge that either Miller or plaintiff had procured an assignment of it. Miller wished to retain possession of the land and when Smith went to him after receiving notice of the intended foreclosure and told him that she did not care to...