Wilson v. Hayes
| Decision Date | 24 May 1889 |
| Citation | 40 Minn. 531 |
| Court | Minnesota Supreme Court |
| Parties | THOMAS W. WILSON <I>vs.</I> GEORGE E. HAYES and others. |
Noyes & McGee, for appellant.
Ueland, Shores & Holt and Levi E. Lum, for respondents.
On August 27, 1885, plaintiff loaned to defendant Douglas $5,000, for which the latter executed his promissory note, secured by a mortgage on certain real estate upon which he had executed a prior mortgage to the Minneapolis Loan & Trust Company. It had been previously agreed between plaintiff and Douglas that plaintiff was "to take an assignment" of the prior mortgage, and that Douglas should have three years in which to redeem the property. In September, 1885, Wilson indorsed and sold Douglas's note to the Bank of Minneapolis, but made no formal assignment of the mortgage. Wilson not having obtained any assignment of the Loan & Trust Company's mortgage, and default having been made in its conditions, the company foreclosed and bid in the property on the 23d of July, 1887, and subsequently transferred the certificate of sale to defendant Hayes, who was a judgment creditor of Douglas, junior to both mortgages. Shortly before the expiration of the time of redemption, Wilson applied to Hayes for an assignment of the certificate of sale, which the latter refused to give. Thereupon Wilson repurchased Douglas's note from the Bank of Minneapolis, filed his intention to redeem as mortgagee, and on July 25, 1888, presented to the sheriff who made the sale his mortgage and the affidavit required by statute, and tendered the proper amount of money, and demanded a certificate of redemption. The sheriff, at the instance and direction of Douglas and Hayes, refused to accept the money or allow plaintiff to redeem. Hayes now claims to own the property under the foreclosure of the trust company mortgage. Plaintiff brings this action to enforce his right of redemption.
Defendants first deny Wilson's right to redeem, on the ground of his alleged failure to comply with the requirements of statute. They urge that, inasmuch as the statute requires a redemptioner to produce to the sheriff "any assignments necessary to establish his claim," and as a transfer of the debt operates as an equitable assignment of the mortgage security, therefore Wilson ought to have presented to the sheriff whatever evidenced the transfer by him to the bank, and the retransfer by it to him. There is nothing in this point. The object of the statute is to require the production to the sheriff of assignments constituting the redemptioner's chain of title, and necessary to show his ownership of the mortgage or other lien under which he claims the right to redeem. In the present case the mortgage stood in Wilson's name all the time; and, while the transfer of the note carried with it equitably all beneficial interest in the mortgage, yet upon Wilson's taking up the note from the bank he was placed in statu quo, and again became the equitable as well as the legal holder of the mortgage. It would be absurd to require him to produce assignments which in fact never existed.
It is also claimed that Wilson lost his right to redeem because he did not, within 24 hours after his tender and demand, cause the documents produced to the sheriff to be filed in the office of the register of deeds, as provided by Gen. St. 1878, c. 81, § 14; Laws 1881, Ex. Sess. c. 3. Without stopping to consider what will be the effect of a failure to comply with this statute, it seems to us that it may at least admit of doubt whether it is applicable to a case like the present, where upon tender and demand a redemption is not permitted. But, at any rate, as it is intended for the benefit and protection of junior redemptioners, they alone, if any one, can take advantage of a non-compliance with its provisions.
Plaintiff's right to redeem is also denied because he never obtained an assignment of the trust company's mortgage, as he had agreed with Douglas to do. Conceding that he was guilty of a breach of contract in not doing so, we fail to see how that is any cause for refusing him the right to redeem in order to protect his own mortgage. Hayes certainly has no right, either as assignee of the trust company or as judgment creditor of Douglas, to set up any such thing. He was no party to this contract, nor was it made for his benefit; and whatever other remedy Douglas might have, he cannot assert any such thing against plaintiff's right to redeem. In the first place, his own right of redemption, and consequently all his interest in the property, was gone. In the next place, he could not be benefited, but would in fact be damaged, by preventing plaintiff from redeeming, for his debt to plaintiff would still exist to its full amount; whereas, if a redemption were had, the debt would be satisfied to the extent of the value of the property over the amount paid to redeem. And, if plaintiff had redeemed, equity would still treat him as trustee for Douglas to the extent necessary to protect his rights under the contract. Therefore a redemption, so far from being in conflict with plaintiff's obligations to Douglas, would have been in the line of their performance.
The last and principal defence is that Wilson fraudulently altered the note secured by the mortgage, after its execution, by erasing the word "annually" and inserting the word "quarterly," so as to make the interest payable quarter-yearly instead of yearly, thereby destroying the instrument and extinguishing the debt. Plaintiff interposed a reply putting in issue the alteration, and further alleging (as we may fairly construe it, in the absence of any specific objection to the pleading) that Douglas had ratified the note in its present condition by paying interest on it, with full knowledge of all the facts. Upon this issue as to the alteration of the note the court submitted certain questions to the jury, their answers to which were in substance that the note was altered after its execution, without the knowledge or consent of Douglas, by some one to the jury unknown, but by and with the knowledge and authority of Wilson. Without considering whether the evidence warranted these findings, it is enough to say that it was such that the jury might have found the other way. The erasure and interlineation constituting the alleged alteration are apparent upon the face of the instrument upon inspection, and are in a different colored ink from the remainder of the written portion of the note.
The court, at the request of defendants, and against plaintiff's objection, instructed the jury that in the absence of any evidence as to when the alteration was made, it would be their duty to find that it was made after delivery; that such was the presumption of law, in the absence of explanation; and that the burden of proof was upon plaintiff, as holder, to show that it was made before execution. This instruction, in various forms, was repeated and emphasized, and is here assigned as error. The question of presumption and burden of proof, where interlineations or erasures appear on the face of an instrument, is one upon which there is a wilderness of authorities and much conflict of opinion. Any attempt to cite or consider the innumerable cases on this question would be both impracticable and useless. The rule adopted by some authorities is that the presumption, in the absence of evidence to the contrary, is that the alteration was made before execution, and therefore that no explanation is required in the first instance; while others hold, in accordance with the instruction of the trial court in this case, that the presumption of law is that the alteration was made after delivery, and therefore the burden is upon the holder to explain it, and show that it was made under circumstances that would not invalidate the instrument. In addition to these two leading and opposing views, different courts have adopted certain intermediate or compromise rules, none of which need be here referred to, except one, seemingly adopted by some very eminent courts, to wit, that the alteration raises a presumption against the instrument when it is suspicious; otherwise, not. But this furnishes no definite rule by which to determine when the burden is upon the holder to explain the alteration and when it is not. Who is to determine, and by what test, whether the alteration is suspicious? And, if held suspicious, when must it be explained, — before or after it is admitted in evidence? Evidence as to...
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