Wannemacher v. Merrill

• Decision Date: 04 August 1911
• Parties: WANNEMACHER v. MERRILL et al.
• Court: North Dakota Supreme Court

22 N.D. 46

132 N.W. 412

WANNEMACHER

v.MERRILL et al.

Supreme Court of North Dakota.

Aug. 4, 1911.

Syllabus by the Court.

Knowledge on the part of the grantee of land of such suspicious facts and circumstances as would put a prudent man on inquiry as to the grantor's intention in making a conveyance is equivalent to a knowledge of all the facts which would be developed by a reasonable pursuit of such inquiry, yet no duty of inquiry as to fraudulent intent of the grantor devolves upon the grantee unless he has actual knowledge of some suspicious circumstance, following Fluegel v. Henschel, 7 N. D. 276, 74 N. W. 996, 66 Am. St. Rep. 642.

Evidence considered, and held that defendant Emma I. Merrill, the grantee in the mortgage sought by this action to be set aside as fraudulent, had no knowledge of any fraudulent intent on the part of her grantor or mortgagor, and had no actual knowledge of any suspicious fact or circumstance sufficient to put her on inquiry.

In the absence of fraud, a debtor may pay or secure one creditor, to the exclusion of others, and may pay one or more creditors in preference to others, although all his property may be used in making such payment.

Evidence considered, and held that the defendants Walter W. Merrill and E. P. Merrill had the right to prefer their mother, Emma I. Merrill, by delivering and executing to her the mortgage in question to secure an antecedent debt due by them to her.

Evidence considered, and held, that at the time of the execution and delivery of the mortgage in question the defendant Emma I. Merrill was a bona fide creditor of the defendants Walter W. and E. P. Merrill, and that at said time said Walter W. and E. P. Merrill were justly indebted to her in the sum of at least $3,000 for money and property advanced by her at their request for their benefit, and which was used and applied as part of the purchase price of the land on which said mortgage was given.

Held, further, that defendant Emma I. Merrill took said mortgage in good faith and without any intent to defraud, hinder, or delay this plaintiff or any other creditor of the defendant Walter W. Merrill in the collection of their debts.

Appeal from District Court, Stark County; E. B. Goss, Judge.

Action by George R. Wannemacher against Emma I. Merrill and others. From a judgment for defendants, plaintiff appeals. Affirmed.

M. A. Hildreth, for appellant. H. C. Berry, for respondents.

KNEESHAW, Special Judge.

This is an action in equity brought by the plaintiff, Wannemacher, as a creditor of one Walter W. Merrill, to set aside and have declared fraudulent and void a certain real estate mortgage made by Walter W. Merrill and E. P. Merrill to their mother, Emma I. Merrill, for $3,000, on certain real estate owned by them jointly in Sargent county, N. D. Said action was tried in Stark county, N. D., and on the trial of said action the court found all the issues in favor of the defendants and dismissed the action on the merits, and this appeal is taken from said judgment of dismissal, and the plaintiff demands a retrial of all the issues of fact and of law in the Supreme Court.

The defendants Walter W. and E. P. Merrill are brothers and the defendant Emma I. Merrill is the mother of Walter W. and E. P. Merrill. On or about the 1st day of January, 1907, the defendant Walter W. Merrill made, executed, and delivered to the plaintiff his promissory note in writing, whereby he promised to pay to said plaintiff the sum of $4,000, with interest at 10 per cent. payable January 1, 1909, and it is by reason of said note that plaintiff claims to be a creditor of the defendant Walter W. Merrill. At the time of the commencement of this action no judgment had been recovered on said note, but on or about the month of May, 1910, plaintiff recovered a verdict in his favor and against the defendant in the district court of Stark county on said note for the sum of $2,663.60, and on the 15th day of August, 1910, a judgment was duly entered on said verdict. The defendant E. P. Merrill was never at any time indebted to the plaintiff.

The undisputed evidence in this case shows that in the month of July, 1902, all of the defendants were residents of the state of Iowa, and that on or about that time defendants Walter W. and E. P. Merrill purchased from Mathews & Hynes about half a section of land in Sargent county, N. D., for something over $5,000; and, as part of the purchase price of said land, they turned in on said purchase price a certain house and lot in Iowa, owned by the defendant Emma I. Merrill, at the agreed price of $1,300, and assumed certain mortgages then against the land, and, in addition thereto, were to pay Mathews & Hynes the sum of $2,000, including the house and lot. The undisputed evidence further shows that some time later some of the proceeds of the crops raised on said lands were turned in to apply on said balance, and defendant Emma I. Merrill furnished defendants Walter W. and E. P. Merrill about $400 to apply on said indebtedness to Mathews & Hynes as part of said purchase price. Some time later all of the defendants moved to North Dakota, and the defendant Emma I. Merrill and her husband sold out in Iowa and came to North Dakota. At the time Emma I. Merrill deeded her house and lot to Mathews & Hynes to apply on the purchase price of said land, and at the other times, when advancements or loans were made by Emma I. Merrill to Walter W. and E. P. Merrill, no written obligation of any kind was given by them to her, but there was an oral understanding between the parties that later, or when the land was disposed of, that she would be reimbursed for the value of the house and lot and the other advancements. The matter ran along until about the month of January or February, 1907. It became necessary, for the purpose of raising money to assist her two sons, for her to borrow some money, and at that time the question of interest was talked over, and it was suggested by E. P. Merrill that he and Walter W. Merrill would give her a mortgage on their Sargent county land for $3,000 to cover the advances made by her to her sons. At that time Walter W. Merrill was not present, but was out on the ranch, but it was agreed by E. P. Merrill that he would get Walter to sign the mortgage. In pursuance of said agreement on the 6th day of February, 1907, a real estate mortgage on the land in question was prepared and dated on that day from Walter W. Merrill and E. P. Merrill to Emma I. Merrill to secure said sum of $3,000, according to the conditions of a certain promissory note, dated on said date and payable three years after date with interest at 6 per cent. per annum; and on the 5th day of March, 1907, after the same had been duly signed, it was acknowledged before a notary public, which mortgage was subsequently, on the 20th day of March, 1907, duly filed for record in the office of the register of deeds of Sargent county, and duly recorded in Book 26, p. 392, of Mortgages, and the mortgage so executed and delivered is the one which this plaintiff by this action seeks to have declared fraudulent and void.

After a careful...