Scanlan v. Grimmer

• Decision Date: 26 January 1898
• Docket Number: Nos. 10,883 - (261).,s. 10,883 - (261).
• Citation: 71 Minn. 351
• Parties: MARY SCANLAN v. JOHN GRIMMER and Others.<SMALL><SUP>1</SUP></SMALL>
• Court: Minnesota Supreme Court

71 Minn. 351

MARY SCANLAN v. JOHN GRIMMER and Others.¹

Nos. 10,883 - (261).

Supreme Court of Minnesota.

January 26, 1898.

Appeal by defendant John Grimmer, from a judgment in favor of the plaintiff entered in the district court for Redwood county upon the findings and order of Webber, J. Reversed.

S. L. Pierce, for appellant.

J. A. Sawyer, for respondent.

COPYRIGHT MATERIAL OMITTED

COLLINS, J.

Action to determine adverse claims to real property, the actual purpose being to set aside and cancel a mortgage thereon of date January 12, 1894, purporting to have been executed and delivered to one John B. Alexander, as mortgagee, to have been assigned to one Maggie A. Henningsen by Sylvester Davis, as attorney in fact for said Alexander, and subsequently assigned by Henningsen to defendant Grimmer, who alone answered in the action.

The primary and principal question in the case grows out of the fact that the money loaned to plaintiff's husband, Martin Scanlan, who then owned the land, belonged to Davis himself, and was furnished by him for the express purpose of making the loan, under an agreement entered into by him with one Gleason, who was found by the court to have been his agent in the matter, that, for all of the necessary purposes of the transaction, Davis should assume the name of John B. Alexander, that the money should be loaned to Scanlan as belonging to a man bearing that name, that the note should be made so payable, and that John B. Alexander should be named as mortgagee in the mortgage. The agreement was carried out; the note and mortgage were so written; Davis delivered the amount of the loan, $2,000, to Gleason in Scanlan's presence; and the former paid out for the latter, and upon his authority, in liquidating existing liens on the land, between $1,800 and $1,900. It appears that Gleason kept the balance of the money for himself. The note and mortgage were delivered to Davis, and by him the mortgage was put upon record.

Subsequently Scanlan and his wife sold, and by warranty deed conveyed, the premises to a son, Joseph Francis. The latter soon afterwards sold, and by warranty deed conveyed, the same to another son, Patrick, and then he sold, and by warranty deed conveyed, the land to this plaintiff. Each of these deeds was in the usual form, but to the covenant against incumbrances in each was added this language,

"Except a mortgage for $2,000 to John B. Alexander, dated January 12, 1894, which mortgage and interest the party of the second part assumes and agrees to pay."

In October, 1894, Davis, pretending to act by virtue of a power of attorney and as the constituent of John B. Alexander, in writing assigned the note and mortgage to Mrs. Henningsen. The fact was that Davis' son signed the name of John B. Alexander to the writing, purporting to be the power, at the instigation of his father and Gleason; the latter, as a notary public, pretending to take and certifying to Alexander's acknowledgment thereof. Of this Mrs. Henningsen was ignorant. She was a bona fide purchaser, and paid to Davis $2,000 in cash for the note and mortgage. She then sold, and in writing assigned, the same, with a covenant as to the amount due thereon, to the defendant Grimmer, who was also a purchaser in good faith, paying $2,000 in cash. Scanlan paid one year's interest upon the note, to whom does not appear.

On its findings, in accordance with the above statement of facts, the court below held, as conclusions of law, that the note and mortgage were usurious, but that by reason of the assumption clauses in the warranty deeds, whereby title to the premises was vested in this plaintiff, the defense of usury was waived, and that the latter was estopped from interposing such defense. It also held that the mortgage, power of attorney, and assignments were each absolutely null and void, and that plaintiff was entitled to the relief demanded in her complaint as against defendant Grimmer.

As stated at the outset, the main question here is the one covered by the conclusion that the mortgage was and is void because Davis, for the purposes of the transaction and for some undisclosed reason, assumed the name of Alexander as mortgagee. The court seems to have been of the opinion that because the mortgagors were misinformed and misled, and intended to mortgage their land to Alexander, and not to Davis, the instrument was absolutely void for want of necessary parties, and therefore defendant Grimmer, an innocent purchaser, who parted with his money in good faith, is to be deprived of his security, and...