Wilson v. Griess
| Decision Date | 21 May 1902 |
| Parties | WILSON v. GRIESS ET AL. |
| Court | Nebraska Supreme Court |
1. A national bank, which held a note of $490 for collection, belonging to another bank, of which it was a large stockholder, took a renewal thereof, and included in such renewal note an amount of its own unsecured debt against the maker sufficient to make the amount of the renewal note $815.45, and at the same time obtained a mortgage upon the homestead of the debtor, signed by himself and wife, to secure the payment of the said renewal note. Held, that the national bank and its stockholders had a direct pecuniary and beneficial interest in the transaction.
2. The assistant cashier of such bank, who was also a director and stockholder thereof, was the notary public before whom the mortgage was acknowledged. Held, that he could not lawfully take such acknowledgment; that he was disqualified to act as such officer on account of his direct pecuniary interest in the matter; and that the acknowledgment and the mortgage were both void.
Commissioners' opinion. Department No. 2. Appeal from district court, Hamilton county; Sornborger, Judge.
Action by J. C. Wilson against Henry Griess and others. Judgment for plaintiff, and the Farmers' State Bank of Saronville appeals. Affirmed.Thomas H. Matters, for appellant.
Hainer & Smith, for appellee.
One J. C. Wilson commenced an action in the district court of Hamilton county against Henry Griess and Christina Griess, his wife, the Farmers' State Bank of Saronville, Neb., Jacob Griess, and the Sutton National Bank to foreclose a certain mortgage for $350, executed by Henry Griess and Christina Griess upon the S. W. 1/4 of section 27, township No. 9 N., range 5 W., situated in said county. The petition for foreclosure was in the usual form. Service was made upon all of the defendants, and the Farmers' State Bank of Saronville filed its answer in the nature of a cross petition praying for the foreclosure of a mortgage alleged to have been executed to it by the defendants Henry Griess and Christina Griess upon the same tract of land to secure the payment of a promissory note for $815, dated June 2, 1894. Default was taken against the defendants, Henry Griess and Christina Griess, and on the 8th day of December, 1896, a decree was rendered foreclosing the mortgage of the plaintiff, Wilson, and also the mortgage belonging to the Farmers' State Bank of Saronville. The amount found due the said bank was not inserted in the decree, and afterwards, on the 29th day of September, 1897, it was agreed in open court by and between the defendants Henry Griess and Christina Griess and the Farmers' State Bank of Saronville that so much of the decree as related to the mortgage of the bank should be vacated, and that the defendants Henry Griess and Christina Griess be allowed 20 days to plead to its said answer and cross petition. The cross petitioner was allowed 10 days thereafter to reply, and thereupon the cause was continued until the next term of court. In accordance with the said arrangements, the answer of Henry Griess and Christina Griess to the answer and cross petition of the bank was duly filed. It was alleged in the said answer that the mortgage set out in the answer and cross petition of the bank described the homestead of the answering defendants; that the same was never executed by them knowingly, but was obtained by means of fraud, misrepresentation, and deceit practiced upon them by and through the First National Bank of Sutton; that the notary who took the acknowledgment of the mortgage was an officer, director, and stockholder of the First National Bank of Sutton; that said bank and the said notary had a direct pecuniary beneficial interest in the transaction; that the note and mortgage in question were not owned by, and were not the property of, the Bank of Saronville, but were in fact and in truth the property of the First National Bank of Sutton, which, it was alleged, was the real party in interest in the case. Usury and numerous other defenses were also pleaded in the answer, and many transactions between the answering defendants and the First National Bank of Sutton were set forth at large in the pleadings, and it was alleged that the First National Bank of Sutton ought to be made a party to the suit. The answer concluded with a prayer that the said bank be made a party; that summons be served upon it; that it be required to answer, and that an accounting be had between the answering defendants and the said banks; that the mortgage be declared void, and held for naught; and that the answering defendants recover from the First National Bank of Sutton whatever sum should be found due them from the said bank on a full and complete accounting in regard to all of the transactions set forth in the answer. Thereupon the First National Bank of Sutton was made a party defendant, and filed its answer to the answer and cross petition of Henry Griess and Christina Griess. The Farmers' State Bank of Saronville filed a reply to said answer, and upon the issues thus joined the cause was tried to the court. After the introduction of the evidence, the court took the case under advisement, and at a succeeding term made a general finding for the defendants Henry Griess and Christina Griess, and by its decree dismissed the cross petition of the Farmers' State Bank of Saronville, with costs. Thereupon the said bank brought the case to this court on appeal. A large amount of evidence was taken upon the trial bearing upon all of the questions raised by the pleadings, and a portion of said evidence will be hereinafter noticed. If the acknowledgment of the mortgage in question is void, the decree of the district court must be affirmed. We will now proceed to determine that question.
1. It is contended by the appellees that the acknowledgment of the mortgage is void, because the land described therein is the homestead of Henry Griess and his wife, Christina Griess; that Theodore Miller, the notary who took the acknowledgment, was at the time an officer, director, and stockholder in the First National Bank of Sutton; that said bank was the real party in interest; and that said bank and the said Miller had a direct pecuniary beneficial interest in the transaction. It is the established law of many of the states that where the officer taking an acknowledgment of a mortgage has a direct pecuniary or beneficial interest in obtaining the same he is disqualified thereby, and the acknowledgment is void. This rule of law is commented upon, and in fact acknowledged and approved, by this court in Horbach v. Tyrrell, 48 Neb. 514, 67 N. W. 485, 489, 37 L. R. A. 434, and Havemeyer v. Dahn, 48 Neb. 536, 67 N. W. 489, 33 L. R. A. 332, 58 Am. St. Rep. 706. We will now examine the record and evidence herein, and determine whether or not this case comes within this well-settled rule. The evidence shows without...
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