Steele v. Bond

Decision Date21 September 1881
PartiesJohn Steele v. John W. Bond and Wife
CourtMinnesota Supreme Court

Appeal by defendants from a judgment of the municipal court of the city of St. Paul. The case is stated in the opinion.

Judgment reversed and a new trial granted.

C. K Davis, for appellants.

John B. & W. H. Sanborn, for respondent.

This action is brought upon a written lease, under Gen. St. 1878 c. 84. The right of possession of the plaintiff is shown by the lease, and this is all that is required under the statute. People v. Van Nostrand, 9 Wend. 50; People v. Reed, 11 Wend. 157. An equitable defence cannot be pleaded to this action. See opinion of district court for Ramsey county in Capehart v. Kennedy, which was argued before the full bench.

Under our statute, this summary proceeding is to try the one question, whether the defendants are holding possession of property contrary to the terms of their covenants with the plaintiff. Chandler v. Kent, 8 Minn. 467 (524;) Stewart v. Murray, 13 Minn. 426. As title cannot be investigated in this proceeding, if the title of the defendants is paramount, they must resort to an appropriate remedy to maintain their rights. De Mott v Hagerman, 8 Cow. 220; Lecatt v. Stewart, 2 Stewart, (Ala.) 474; Bliss v. Bange, 6 Conn. 78; Shoudy v. School Directors, 32 Ill. 290; Smith v. Hoag, 45 Ill. 250; Hunt v. Wilson, 14 B. Mon. 36; Spalding v. Mayhall, 27 Mo. 377; Gibson v. Tong, 29 Mo. 133; Youngs v. Freeman, 15 N. J. L. 30; Mercereau v. Bergen, Id. 244; Clark v. Stringfellow, 4 Ala. 353; Stone v. Malot, 7 Mo. 158; Black v. State, 3 Yerger, 587; Taylor on Landlord and Tenant, § 792. The plaintiff's right to possession is absolute, subject only to defendants' right to bring a bill to redeem. Martin v. Fridley, 23 Minn. 13.

OPINION

Clark, J.

This was a proceeding under the statute relating to forcible entries and unlawful detainers, brought in the municipal court of the city of St. Paul, for the restitution of two lots of land, alleged to be wrongfully detained from the plaintiff after the expiration of the term of a lease.

The complaint alleges that, on the 15th day of March, 1880, the plaintiff, by a lease in writing executed by both parties, leased and demised the lots to the defendants for the term of seven months from the 5th day of November, 1879, at a rental of $ 700, and that by a provision thereof the lessor conferred upon the lessees the right and privilege of purchasing the lots at any time prior to the expiration of the term, for the sum of $ 11,117. It further alleges that the lessees covenanted to pay the rents reserved, and, in case of their default so to do, that the lessor might re-enter, and also covenanted to surrender up to the plaintiff the possession of the premises at the expiration of the term, unless in the mean time they should have purchased the lots under the provision of the lease in that regard. It alleges that the defendants entered into possession of the lots under the lease, and that the lease and all its terms, conditions and stipulations were afterwards extended and continued to the 5th day of September, 1880, time to be of the essence of the contract. It further alleges that the defendants did not tender the said sum of $ 11,117 for the purchase of the premises, and, the term of the lease and extension having expired, demands judgment of restitution.

The answer of the defendants admits the making of the lease, but denies entry under it, or that the defendants ever became the tenants of the plaintiff, and sets up the following special facts: It alleges that the plaintiffs have been in possession of the lots for the last 25 years as the owners thereof; that in October, 1871, they gave the plaintiff a mortgage upon the lots to secure the payment of a loan of $ 10,000 in three years, with interest at 12 per cent. per annum; that default having been made, the mortgaged premises were sold on foreclosure by advertisement to the plaintiff, on the 24th day of February, 1877, for the sum of $ 11,787.04, being the full amount claimed to be due on the mortgage debt; and that a sheriff's certificate of sale was executed to the purchaser and duly recorded. It further alleges that, while the period of redemption was current, an agreement was made between the parties that the amount for which the property was sold should constitute a new loan, to run beyond the period of redemption, and should draw interest at the rate of 10 per cent. per annum until paid; that the amount of the principal should be reduced by payments during the year 1878 to $ 8,000, and then the plaintiff should take a new mortgage for that amount; and that in the mean time the original mortgage should stand as security for the new contract, and that the time of redemption, which would otherwise run and expire as to such foreclosure, should not be operative. It further alleges that, in the performance of such agreement, there was paid on the mortgage debt, before such time of redemption expired, the sum of $ 100, which was received by the plaintiff as part-payment of such mortgage debt, and that afterwards, and at different times between the 24th day of March, 1878, and the 4th day of September, 1880, other payments were made on such debt, and received by the plaintiff as such, amounting in the aggregate to $ 5,183.13; that $ 3,000 of that amount was paid on the 5th day of August, 1878, and that an accounting was had between the parties on that day, by which it was found that there was due the plaintiff a balance of $ 10,371.39; that the interest on this new principal was then computed up to the 5th day of August 1879, at 10 per cent. per annum, and the amount to be due at that date, with certain adjustments for insurance, taxes, etc., was fixed at $ 11,500, and the plaintiff then executed and placed in escrow a deed of conveyance to Joanna Bond of the premises, to be delivered upon the payment of that amount by the time aforesaid, and that the time for such delivery was afterwards extended, but payment was not made, and the deed was returned by the depositary to the plaintiff; that the lease was executed at the request of the plaintiff as further security for the debt remaining unpaid, and for no other purpose, and that the rent stipulated to be paid therein was agreed to be part-payment for the mortgage debt, and was actually paid and received as such, constituting a portion of the above-mentioned payments.

The answer also asserts claims to homestead rights and certain other rights to one of the lots alleged to be owned by Mrs. Bond, arising out of her alleged relation of suretyship with respect to the debt, which, as they are not necessary to be considered in disposing of this appeal, need not be further noticed. The answer prays for affirmative relief, viz., the adjustment and settlement by a decree of the rights of the parties, etc.

The plaintiff interposed a reply, in which he admitted the execution and foreclosure of the mortgage as alleged, but denied the other allegations of the answer. Upon the trial, the plaintiff introduced the lease and agreement extending the same, described in the complaint, and rested. The defendants thereupon moved to certify the case to the district court, and offered to prove by competent testimony the matters set up in the answer, but such motion and offer were overruled, and to such rulings the defendants duly excepted. The plaintiff had judgment for restitution, from which this appeal was taken.

In Fisk v. Stewart, 24 Minn. 97, it was held that "when the real nature of a transaction between the parties is confessedly that of a loan, advanced upon the security of real estate granted to the party making the loan whatever the form of the instrument of conveyance taken as the security, it is always treated in equity as a mortgage, to which is annexed, as an inseparable incident, the right to the equity of redemption, which can only be extinguished by foreclosure, or voluntary surrender by the party vested with the right by some new agreement founded on an adequate consideration. Neither is it any the less a mortgage that the advance is made wholly upon the security, and without any personal obligation on the part of the...

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