Sedlak v. Duda, No. 31704.

• Court: Supreme Court of Nebraska
• Writing for the Court: CHAPPELL
• Citation: 13 N.W.2d 892,144 Neb. 567
• Parties: SEDLAK v. DUDA.
• Docket Number: No. 31704.
• Decision Date: 07 April 1944

144 Neb. 567
13 N.W.2d 892

SEDLAK
v.
DUDA.

No. 31704.

Supreme Court of Nebraska.

April 7, 1944.

Appeal from District Court, Cass County; Wilson, Judge.

Suit in equity by Joseph M. Sedlak against Ferdinand Duda to redeem from a mortgage foreclosure decree alleged to be void. From a judgment, the defendant appeals, and the plaintiff cross-appeals.

Affirmed in part, and reversed in part, with directions.

[13 N.W.2d 893]

Syllabus by the Court.

1. A motion may properly be overruled which cannot be allowed in substantially the same terms as requested.

2. All facts which taken together are necessary to fix the responsibility for the injury complained of constitute but one cause of action although the prayer of the petition is for more than one kind of relief.

3. Where a foreclosure sale under a mortgage to the mortgagee, directly or indirectly, is voidable, the owner of the equity of redemption is not foreclosed and may maintain an action to redeem; and where the mortgagee goes into possession, he may require an accounting.

4. Where an action is brought in equity to redeem, the offer in the petition to pay the amount due to the mortgagee is sufficient to support the action without a previous actual tender of the amount due.

5. The right to redeem and the right to foreclose are reciprocal, and an action may be brought at any time before the statutory bar of ten years is complete.

6. The right to redeem is a favorite of equity, and will not be allowed to be taken away, except upon a strict compliance with the steps necessary to divest it, and by due process of law.

[13 N.W.2d 894]

7. A party may not properly base a claim of estoppel in his favor on his own wrongful act or dereliction of duty, or fraud committed or participated in by him, or on acts or omissions induced by his own conduct, concealment, or representations.

8. A litigant in a suit in equity will not be permitted to secure the fruits of a decree in his favor, obtained for him by an attorney whom he knows also represents his adversary in the subject matter before the court, without in good faith making full disclosure of all facts to such adversary.

9. For the purpose of redemption a purchaser in good faith at the judicial sale, believing he has a good title, will be entitled to credit for improvements made upon the property; but one who buys with notice of the facts is not a purchaser in good faith within the meaning of the rule, and is not entitled to such credit.

10. Where a sale to the holder of the mortgage is voidable, he is accountable for rents and profits, together with interest thereon at the contract rate. And, where possession is not only wrongfully taken by the mortgagee but is accompanied by force and fraud, the mortgagee, on a suit to redeem, cannot be charged with less than the whole rental value during his possession.

11. Interest, however, should not be charged upon rents and profits from the end of the year when they accrued, but rents and profits, less taxes paid, without interest on such taxes, should be first applied at the end of each year to extinguish the interest upon the principal for that year, and if a balance of rents and profits remains thereafter it should be applied pro tanto to payment of the principal of the mortgage until extinguished, after which rents and profits, less taxes paid, shall draw interest from the end of each year at the statutory rate until date of judgment.

A. L. Tidd, of Plattsmouth, for appellant.

Frank L. Frost and Frederick L. Wolff, both of Omaha, for appellee.

Heard before SIMMONS, C. J., and PAINE, CARTER, MESSMORE, YEAGER, CHAPPELL, and WENKE, JJ.

CHAPPELL, Justice.

Plaintiff filed this suit in equity to redeem from a mortgage foreclosure decree alleged to be void because the decree was rendered on defendant's cross-petition filed more than four months after answer day, without any issue of process or appearance of plaintiff, and the attorneys who took the decree for defendant against plaintiff and his wife, without their knowledge or consent, were admittedly their own attorneys, first employed by them to defend and protect their interests in the cause. Many pleadings were filed by defendant attacking plaintiff's petitions until the cause was finally at issue on plaintiff's third amended petition, defendant's answer, and plaintiff's reply. After hearing upon the merits the trial court at the March, 1943, term entered a decree finding and adjudging generally for plaintiff, except as to certain disputed items of accounting. Motions for new trial were filed by both parties, and thereafter the court on its own motion, during the same term, set aside its former decree and entered another more favorable to defendant. Motions for new trial were again filed and upon the overruling thereof defendant appealed and plaintiff cross-appealed to this court. Except as hereinafter modified in conformity with plaintiff's cross-appeal, we affirm the judgment of the trial court.

Defendant's chief contentions here are that the trial court erred in the following particulars: 1. Overruling paragraphs 1 and 2 of a motion filed by defendant December 19, 1942. 2. Permitting plaintiff to redeem without pleading and proving tender before suit. 3. Holding that the action was not barred by the statute of limitations. 4. Refusing to find that plaintiff was estopped to deny validity of the decree or to redeem. 5. Permitting plaintiff to recover rents and profits. 6. Awarding plaintiff the sum of $50 as costs and expenses for a handwriting expert necessary to prove the genuineness of certain documents, as provided by section 20-1266, Comp.St.1929. 7. And, in entering its last

[13 N.W.2d 895]

decree as the sequel of an alleged nunc pro tunc order.

By cross-appeal plaintiff contends that the trial court erred: 1. In crediting defendant with improvements including costs of the original foreclosure action. 2. Refusing to charge defendant with interest on rents and profits. 3. And, refusing to credit plaintiff with certain payments of principal and interest.

The evidence and circumstances appearing in this record amply support the allegations of plaintiff's petition, which are in substance: That plaintiff is a man of limited education, unable to read English, and with no knowledge of law. That defendant Duda is his brother-in-law, and Dwyer & Dwyer were plaintiff's lawyers, upon whom he placed special reliance as to their superior knowledge, integrity, and duty to defend and protect him. That at all times since 1915 plaintiff and his wife were the owners of a valuable home in Plattsmouth, Nebraska, which since April 28, 1936, defendant has held in trust for plaintiff subject only to reimbursement to defendant of the balance unpaid upon a second mortgage for $812.50 at 5 per cent. executed by plaintiff and wife on May 15, 1923, to secure a loan made by defendant. That plaintiff paid defendant on the principal thereof $50 on July 11, 1929, and $500 on May 12, 1930, which together with other admitted payments of principal and interest left a balance of $225.50 remaining unpaid on April 10, 1933, with interest at 5 per cent. from that date, no part of which was due or delinquent until after April 10, 1934. That in 1920 plaintiff and wife executed a first mortgage on their home to the Plattsmouth Loan & Building Association, hereinafter called the Association, and on December 24, 1932, applied to it for an additional loan sufficient to pay defendant in full, which was granted upon condition that defendant release his second mortgage. That defendant was requested to execute such a release, whereupon he consulted Dwyer & Dwyer, plaintiff's attorneys, who requested plaintiff to come to their office where the attorneys, in defendant's presence, informed and instructed plaintiff that he should make no further payments to the Association because he had already overpaid them, which they would prove by requiring the Association to bring their books into court. That plaintiff complied with his attorneys' instructions, whereupon the Association filed foreclosure proceedings making plaintiff and wife and Duda et al., defendants. That upon receiving summons therein plaintiff immediately returned to his attorneys' offices where, in defendant's presence, the attorneys, with full knowledge that plaintiff's and his wife's interests were adverse to defendant, represented and promised that they would represent and defend both plaintiff and defendant Duda in the foreclosure suit, and protect and preserve the rights and interests of plaintiff and his wife in their home. Plaintiff alleges, however, that at all times theretofore and thereafter defendant and the attorneys, without plaintiff's knowledge or consent and without making full disclosure of facts to him, acted in concert and conspired together to wrongfully deprive plaintiff and his wife of their home for the benefit of defendant. That in pursuance thereof they first filed a general denial for plaintiff, his wife, and Duda, which was verified by defendant Duda. That later they filed an amended answer for plaintiff and wife denying generally the allegations of the Association's petition, alleging payment of the first mortgage in full, and praying that plaintiff Association's petition be denied. That more than four months after answer day, without any process ever issued and served on plaintiff and wife, who never made any appearance or had any knowledge thereof, the attorneys filed an answer and cross-petition for defendant Duda denying generally the allegations of the Association's petition, and alleging adversely to plaintiff and wife that there was then due and owing to defendant Duda on his second mortgage the sum...