Shelby v. Bowden

• Decision Date: 07 April 1903
• Citation: 94 N.W. 416,16 S.D. 531
• Parties: JOHN W. SHELBY, Plaintiff and appellant, v. W. J. BOWDEN Defendant, and Wm. E. Damon et al., Defendant and respondent.
• Court: South Dakota Supreme Court

16 S.D. 531

94 N.W. 416

JOHN W. SHELBY, Plaintiff and appellant, v. W. J. BOWDEN

Defendant,

and Wm. E. Damon et al.,

Defendant and respondent.

South Dakota Supreme Court

Appeal from Circuit Court, Hutchinson County, SD

Hon. E. G. Smith, Judge

Affirmed

A. R. Kittredge

Attorneys for appellant.

W. J. Hooper

Attorneys for respondent,

Opinion filed April 7, 1903

HANEY, P. J.

This is an action to determine adverse claims to real property. Defendants Bowden, Schaetzel, Dunlap, C. F. Bliven, trustee, Lila C. Bliven, Samuel C. Blair, Ann D. Blair, Alma C. Damon and Augusta Moller defaulted. Defendant Shepard answered, disclaiming any interest in the property. Defendant Karl Moller answered, disclaiming any interest except as a tenant of the defendant William E. Damon. Upon the issues as joined by the answer of the defendant and respondent, William E Damon, to the complaint, the court found the facts to be as follows:

“(1) That the land in controversy in this action … was patented by the United States government unto one Charles Fossette August 16, 1889. Said patent was filed for record in the office of the register of deeds of Hutchinson county, South Dakota, January 22, 1894, and recorded in Book 5 of the records of said office on page 28.

“(2) That on May 29, 1888, the said Charles Fossette and Ollie Fossette, his wife, executed a mortgage on said real estate unto W. L. Telford to secure payment of the sum of $450, with interest thereon at the rate of 7 percent per annum, interest payable semiannually. It was made a condition of the said note that, if any installment of interest should not be paid when due, the whole sum secured by this note, both principal and interest, should at once become due, and payable, and should draw interest after due at the rate of 12 per cent per annum until paid, and any installment of interest not paid when due should draw interest until paid at the rate of 12 per cent per annum. That the said mortgage contained the following provision, to wit:

‘And it is mutually understood and agreed between the mortgagor and mortgagee and trustee herein, and this clause shall be taken and held to be notice to whom it may concern, that this mortgage or trust deed is taken and this loan made for the purpose of negotiating a sale of the same to some investor 1 or full value without any assignment of the same being placed upon record,’ etc.

That said mortgage was duly acknowledged, so as to entitle the same to be recorded, and was on May 31, 1888, filed for record in the office of the register of deeds of Hutchinson county, South Dakota, and is recorded in. Book 23 of Mortgages, on page 4. That shortly after the execution thereof the said note and mortgage, for full value then and there paid by this defendant William E. Damon, was sold, assigned, and transferred unto said Willian E. Damon, and ever since that time he has been, and he is now, the owner and holder thereof. That said Fossettes failed to pay the interest on said note which became due January 1, 1891 or subsequent to that date, or any part of the principal, and there is now due on said mortgage indebtedness the sum of $465.75, with interest thereon from January 1, 1891, at the rate of 12 per cent. per annum, amounting to $868.75.

“(3) That on May, 24, 1888 the said Charles Fossette and Ollie Fossette, his wife, executed to the defendant W. J. Bowden a second mortgage on the above-described premises, which said mortgage was subsequent and inferior to the lien of the mortgage described in paragraph 2 of these findings, to secure payment of the sum of $22,95 as follows, to-wit: $2.70 January 1, 1889; $2.25 July 1, 1889; $2.25 January 1, 1890; $2.25 July 1, 1890; January 1, 1891; $2.25 July 1, 1891; $2.25 January 1, 1892; $2.25 July 1 1892; $2.25 January 1, 1893; $2.25 July 1, 1893. All of said installments to draw interest after due-until paid at the rate of 12 per cent, per annum; and it was expressly agreed by the terms of said mortgage that a failure to pay any installment as above agreed, that such failure should render the whole sum secured thereby due and payable immediately on such default.

“(4) That said mortgage contained the following provision, to-wit:

‘It is further agreed that this mortgage may be foreclosed by action or by advertisement, as provided by chapter 28 of the Code of Civil Procedure of the Revised Codes of Dakota of 1877, or any other laws or acts of the territory of Dakota permitting foreclosure by advertisement, and this paragraph shall be deemed as authorizing and constituting the power of sale as provided in said chapter and other acts, if any, and it is agreed that, should foreclosure be commenced, an attorney fee of $25 shall be allowed for plaintiff’s attorney, and shall be collected as part of the costs on foreclosure. A release of this mortgage is to be made at the expense of the party of the first part on full payment of this indebtedness.’

“(5) That, excepting as stated in paragraph four of these findings, the said mortgage contained no power authorizing a foreclosure of said mortgage by advertisement.

“(6) That said mortgage was duly acknowledged, so as to entitle the same for record, and the same was filed for record in the office of the register of deeds of said county of Hutchinson, Dakota Territory (now state of South Dakota), May, 31, 1888, at 10 o'clock a. m., and the register of deeds of said county indorsed the following on the back of said mortgage:

‘Territory of Dakota, Hutchinson county—ss. Filed for record the 31st day of May, A. D. 1888, at 10 o'clock a. m., and recorded in book 8 of Mortgages, on page 611, Hutchinson County Records. F. J. Eisemann, Recorder;’

and thereafter forwarded the same to the mortgagee.

“(7) That said indorsement was in fact untrue, in that in the purported copy of said mortgage, as spread upon the records of said office of register of deeds, the paragraph contained in said mortgage set out in paragraph four of the findings was wholly omitted, but in all other respects the copy as spread upon the records is a true copy of said original mortgage,

“(8) That, default having been made in the payment of the several installments secured by said mortgage, and which became due subsequent to January 1, 1889, the mortgagee, relying on the indorsement on said mortgage, proceeded to foreclose the same by advertisement and sale, and on December 10, 1890, under such foreclosure proceedings, the mortgaged premises were sold to said C. F. Bliven, as trustee, and a certificate in due form was issued by the sheriff of said county in duplicate, one copy of which was filed in the office of the register of deeds of said county of Hutchinson and the other was delivered to said purchaser.

“(9) That the said land not being redeemed from such sale, on December 31, 1891, a sheriff’s deed of said premises on such foreclosure proceedings was issued by the sheriff of said county of Hutchinson unto said C. F. Bliven, as trustee, which deed was duly acknowledged, so as to entitle the same to be recorded, and the same was filed for record in the office of the register of deeds for Hutchinson county, South Dakota, January 8, 1892, at 9 o'clock a. m., and recorded in book of F of Deeds, on page 263.

“(10) That the said Bliven at that time was an officer of the American Investment Company of Emmetsburg, Iowa, and he purchased and held the said land and premises at said foreclosure sale for said company.

“(11) That the proceedings had to foreclose said mortgage were in every respect regular, and according to statute, excepting that the power of sale contained in said mortgage was not spread on the records in the office of register of deeds of Hutchinson county, South Dakota, before any proceedings to foreclose the said mortgage were had.

“(12) That on October 25 1893, the said C. F. Bliven, as trustee, and Lila C. Bliven, his wife, executed to the said defendant Samuel C. Blair their special warranty deed of conveyance of the said premises. That the said deed was duly acknowledged, so as to entitle the same to be recorded, and that it was tiled for record in the office of the register of deeds for said county of Hutchinson November 4, 1893, at 9 0'clock a. m. and is recorded in book W of Deeds, on page 112,

“(13) That the said Samuel C, Blair was at that time an officer of the American Investment Company, and he took title to the same for said company, and not otherwise,

“(14) That immediately upon the issuance of the sheriff’s deed of said premises, as stated in paragraph 9 of these findings, the said American Investment Company, with the consent of and without any objection on the part of said Charles Fossette, entered into the quiet and peaceable possession of the said premises, and every part thereof, claiming title thereto under such forelosure proceedings. That during the season of 1892 and 1893 the said premises were leased to and cultivated by one Alvin Kayser as tenant of the American Investment Company, and during the year 1894 by one Karl Moller as tenant of the said American Investment Company. That the possession of the said premises by said American Investment Company by and through their various tenants and agents was at all times open, notorious, peaceable, and exclusive, and at all times the said company claimed to be the owner of the same, and was attempting to sell it; that the said Charles Fossette at all times had actual knowledge of the possession of the said premises by the said American Investment company, by its tenants and agents, as herein stated, and its claim of title thereto, and had notice that the said American Investment Company was offering the said premises for sale, and was trying to dispose thereof; and the said Fossette at all times acquiesced in the said American Investment Company’s possession and title of and to the said premises, and he at no time after the issuance of said sheriff’s deed as aforesaid made any claim of...