Strimling v. Union Indem. Co.

• Citation: 222 N.W. 512,176 Minn. 26
• Decision Date: 07 December 1928
• Docket Number: No. 26925.,26925.
• Parties: STRIMLING v. UNION INDEMNITY CO.
• Court: Supreme Court of Minnesota (US)

176 Minn. 26
222 N.W. 512

STRIMLING
v.
UNION INDEMNITY CO.

No. 26925.

Supreme Court of Minnesota.

Dec. 7, 1928.

Appeal from District Court, Ramsey County; Grier M. Orr, Judge.

Action by Moses Strimling against the Union Indemnity Company. Judgment for plaintiff, and defendant appeals. Affirmed.

See, also, 172 Minn. 320, 215 N. W. 67.

Syllabus by the Court

The price obtained for real or personal property at public sale, under a decree of court in an action to foreclose a mortgage, or at a public auction, nothing to impeach the regularity or fairness of the sale appearing, is competent but not conclusive evidence of value of the property sold.

The findings of fact as to damages are held sufficient, and to sustain the conclusions of law as to the amount thereof.

Plaintiff held a second mortgage on real property, further secured by an indemnity bond against mechanics' liens. The condition of the bond was breached by the establishment of valid mechanics' liens against the property. Thereafter the first mortgage was foreclosed. Held, that the plaintiff could sue for breach of the condition of the bond and recover damages for the impairment or loss of his security without redeeming from the foreclosure of the first mortgage.

[222 N.W. 512]

Herbert T. Park, of Minneapolis, for appellant.

Leonard, Street & Deinard, of Minneapolis, for respondent.

OLSEN, C.

Appeal by defendant from a judgment. Plaintiff purchased a note secured by second mortgage upon real estate in Minneapolis. The mortgage was subject to a prior mortgage on which there was an unpaid balance of some $72,000. A large building was being erected upon the property, and lienable claims existed and would arise from the building operations. As a protection and further security for plaintiff's mortgage, the defendant had issued to the holder thereof its indemnity bond, conditioned that the defendant would well and truly pay, or cause to be paid, all claims for labor performed and materials furnished in the erection and construction of the building on the premises. Liens accrued against the premises, resulting in a judgment, in a mechanic's lien action, in the amount of $10,497.61, entered May 9, 1925. Defendant failed to pay the lien claims or the judgment thereon. No sale has been made under this judgment. By agreement between the holder of the mechanic's lien judgment and the holder of the first mortgage, the judgment was made subject and inferior to the first mortgage, but such judgment remains superior to plaintiff's mortgage. The first mortgage was foreclosed by advertisement on November 9, 1925, and the property bid in for some $74,000. So far as appears, no one redeemed therefrom. Plaintiff foreclosed his mortgage by action, and sale was had on October 5, 1926. Under the decree of foreclosure, the premises were sold to a third party, as purchaser, for the sum of $15. The sale was confirmed by the court. Plaintiff then brought this action to recover damages from defendant for breach of the condition of its bond, failure to pay the lien judgment. Plaintiff recovered judgment for an amount equal to the unpaid balance of $8,100 and interest on his note and mortgage, and an item of $103, expense incurred by him in defending against the mechanic's lien action. The appeal is from this judgment.

1. The appeal presents the question whether the evidence sustains the findings as to damages and the recovery thereof beyond a nominal amount.

The bond sued upon is held to be a contract of indemnity to protect plaintiff's mortgage against paramount liens which would impair or destroy the security. In order to recover more than a nominal amount, the plaintiff must prove damages, and compensation can be awarded only for loss actually sustained. American B. & L. Ass'n v. Waleen, 52 Minn. 23, 53 N. W. 867;Mechanics' Savings Bank v. Thompson, 58 Minn. 346, 59 N. W. 1054. The indemnity was against the effect of valid liens upon the value of plaintiff's security. The breach of the...