Schade v. Connor

• Decision Date: 13 April 1909
• Docket Number: 15,649
• Parties: CLAUS SCHADE, APPELLEE, v. DUNCAN CONNOR ET AL., APPELLANTS
• Court: Nebraska Supreme Court

120 N.W. 1012

84 Neb. 51

CLAUS SCHADE, APPELLEE, v. DUNCAN CONNOR ET AL., APPELLANTS

No. 15,649

Supreme Court of Nebraska

April 13, 1909

APPEAL from the district court for Howard county: JAMES N. PAUL JUDGE. Reversed.

REVERSED.

Harrison & Prince, for appellants.

W. H Thompson and T. T. Bell, contra.

OPINION

BARNES, J.

This action was commenced in the district court to foreclose a mortgage on the northeast quarter of section 35, township 15 north of range 11 west, situated in Howard county. The petition discloses that on the 14th day of January, 1899, one Duncan Connor, who was then the owner of the land above described, and his wife, Mary, executed and delivered a mortgage thereon to the plaintiff for the purpose of securing the payment of a promissory note for $ 700 due the 14th day of January, 1904; that after making the mortgage they sold and conveyed the land to one Sarah Kerr, who, as a part of the purchase price, assumed and agreed to pay the mortgage debt; that in the month of December, 1903, Sarah Kerr departed this life, leaving certain real and personal property which was disposed of by her last will and testament, and by which she devised the mortgaged premises to her minor grandson, David W. Kerr, who was then about four years of age; that her son James Kerr was designated by her will as the executor of her estate; that the will was duly admitted to probate and James Kerr was appointed as executor; that he entered upon and performed the duties of his said trust until the close of the administration of the estate; that no claim for the amount due on the mortgage was ever filed in the county court of Howard county or allowed against said estate; that the executor had been discharged, and that David W. Kerr, who is a minor, was the owner in fee of the land in question. He was therefore made a party defendant, and plaintiff prayed for a receiver to take charge of the mortgaged premises, to collect the rents and profits thereof, and apply them to the payment of the amount found due upon the mortgage, and for a decree of foreclosure.

It appears that one Frank J. Taylor was appointed guardian ad litem for the minor defendant, and in due time filed an application to have James Kerr made a party to the action, which was accordingly done. The guardian thereupon filed an answer, and a cross-petition against the defendant James Kerr, setting forth, among other things, that by assuming and agreeing to pay the mortgage debt, Sarah Kerr became personally liable therefor; that by the terms of her will provision was made for the payment of her just debts, after which the rest and residue of her estate, both real and personal, was devised and bequeathed to James Kerr; that he was thus made her residuary legatee, and was thereby charged with, and became liable for, the payment of the mortgage debt; that during his administration of the estate, and afterwards, he recognized his liability for its payment and his duty to pay off and discharge said mortgage by paying the interest and a part of the principal thereof, which sums so paid by him were credited on said note and mortgage; that he failed to disclose said facts, and to report his liability thereon to the county court of Howard county, and concealed the same from the knowledge of said court, and thereby procured his discharge from his said trust; that he afterwards refused to pay off said mortgage debt, and, although as residuary legatee he had received more than $ 1,000 worth of personal property of the said estate, after the payment of all of the other debts of the testator, he still refused to pay the said mortgage debt, and left the same a charge upon and against the real estate bequeathed to the minor defendant, David W. Kerr. The cross-petition concluded with a prayer that the defendant James Kerr be declared liable for the payment of the amount found due on the mortgage, and that judgment be rendered against him therefor.

A demurrer was interposed to the cross-petition based upon the following grounds: "(1) That the court has no jurisdiction of the action. (2) That there is a defect of parties plaintiff. (3) That said answer does not state facts sufficient to constitute a cause of action. (4) That said Frank J. Taylor, guardian ad litem for the said David W. Kerr, has no legal capacity to sue or prosecute this action. (5) That the cause of action stated shows on the face of the pleading to have been barred by the statute of limitations, as no claim was filed therefor in the county court as provided by law, or otherwise, in the probate of the estate of the said Sarah Kerr." The district court sustained the demurrer, dismissed the action as to James Kerr, found that $ 592 was the amount due on the mortgage, appointed a receiver, entered a decree of foreclosure as prayed for in the plaintiff's petition, and the guardian ad litem has brought the case here by appeal.

His first contention is that the facts pleaded in his cross-petition and admitted by the demurrer were sufficient to require the district court under its equity power to hear, adjust and determine the rights and liabilities of all of the parties to the transaction, including the liability of James Kerr for the payment of the mortgage debt, and require him to pay the same. The first question to be decided is: Did the testator, Sarah Kerr, under the undisputed facts of this case, become personally liable for the payment of the mortgage debt? In Rockwell v. Blair Savings Bank, 31 Neb. 128, 47 N.W. 641, it appeared that one Tebury bought the mortgaged premises of the Rockwells for $ 2,500; that he only paid $ 300 thereof, and for the balance of the purchase price he assumed and agreed to pay the mortgage. It was held that he thereby made the mortgage debt his own and was personally liable to the Rockwells for the amount of the deficiency remaining after foreclosure and the sale of the mortgaged premises. The same doctrine was announced in Cooper v. Foss, 15 Neb. 515, 19 N.W. 506, and has been declared by numerous other cases decided by this court. It follows that under the facts disclosed by the pleadings in this case Sarah Kerr, at the time of her death, was personally liable for the amount due plaintiff on his mortgage, and a personal judgment could have been rendered against her therefor. We are therefore of opinion that it was the duty of the executor in this case to pay off and discharge the mortgage in question. Beard's Appeal, 78 Conn. 481, 62 A. 704; Turner v. Laird, 68 Conn. 198, 35 A. 1124; Sutherland v. Harrison, 86 Ill. 363; Jones v. Null, 9 Neb. 57, 1 N.W. 867.

Again James Kerr was the residuary legatee of the estate of which he was executor, and he took the property of his testator charged by the terms of her will with the payment of her debts. When he took over the property and secured his discharge as executor, he made himself personally liable for the payment of the mortgage debt, and equity will not now permit him to deny his liability therefor, for "equity considers that done which should be done." Sutherland v. Harrison, supra, was a case brought to foreclose a vendor's lien upon certain real estate situated in the city of Chicago. It appears that Sutherland, by contract, purchased the land in question of one Samuel Smith. The purchase price being $ 2,000, payable on January 18, 1873, with interest at 6 per cent. per annum, payable semiannually. No payment of the principal was made, but the interest was paid to December 18, 1870. Sutherland died in 1868 intestate, leaving a widow, but no children. His widow, his brother and the children of two brothers, who died before his...