Northwestern Mutual Life Insurance v. Murphy
Northwestern Mutual Life Insurance v. Murphy
Opinion of the Court
The plaintiff brought this action in the district court of the county of Ramsey to have its mortgage upon certain real estate in the city of St. Paul, and the certificate of sale on a foreclosure of the mortgage, corrected, on the ground of mistake, so as to describe and include the land here in controversy, and, further, to have it adjudged that neither of the defendants has any interest in or lien upon such land. The defendants Murphy, Cady, and Iowa Rand Company separately answered, each claiming some interest in or lien on the land in controversy. Findings of fact were made by the trial court favorable to the defendants named, and judgment directed accordingly. The plaintiff appealed from an order denying its motion for a new trial.
The tract of land actually described in the plaintiff’s mortgage, and the tract claimed to have been omitted therefrom by mistake, are now known as “lots 4 and 5 of Auditor’s subdivision No,. 35 to St. Paul.” Mr. William Dawson acquired lot 4 in 1874 and lot-5 in 1879. The mortgage here in question, as to the land in controversy, was practically a renewal of a mortgage given in 1874, and at a time when -the mortgagor owned lot 4 only. The trial court, in effect, found that all of the property now known as “lot 4” and a part of the property now known as “lot 5” are now and have been since the year 1889 covered by a brick and stone building; that prior to the year 1889, and at all times herein mentioned, the building covered lot 4, but did not cover any part of lot 5 until the month of June, 1889, when it was enlarged and extended by Mr. Dawson so as to cover a part of lot 5, and until that time lot 5 was vacant and unoccupied; that in the month of October, 1887, Mr. Dawson executed a mortgage to the plaintiff, the one here in question, which was duly-recorded, covering and describing by metes and bounds lot 4 only; that lot 5 was not described in or covered by the mortgage, nor was it the intention of the parties thereto at the time the mortgage was executed to include lot 5 therein, nor was it omitted therefrom by mistake; that on March 10, 1897, Mr. Dawson, being insolvent, made an assignment for the benefit of his creditors, and on November 14, 1903, the assignment proceedings were wound up and the assignee
As a conclusion of law the trial court found that the plaintiff was not entitled to a reformation of its mortgage and foreclosure sale as against the answering defendants; that the execution sale to the defendant Murphy was valid, and that he was entitled to receive the redemptiofi money paid to the sheriff; that the judgments of the de
The plaintiff’s assignments of error present two general questions for our consideration — one of fact, and the other of law. They are:
First. Is the finding, to the effect that lot 5 was not omitted from •the description of the mortgaged premises by the mutual mistake of the parties at the time the mortgage was given, sustained by the evidence ?
Second. Did the respective judgments of Murphy and his codefendants ever become a lien on the lot or any interest therein ?
1. Is the finding of fact sustained by the evidence? Counsel for the plaintiff claims, with earnestness and undoubted candor, that it is not. A careful consideration, however, of the record, including the original application of the mortgagor for the loan and annotations thereon, has led us to the conclusion that the finding is sustained by the evidence.
2. The second contention of plaintiff is that the judgments of the defendant Murphy and his codefendants, respectively, never became a lien on lot 5. This involves the consideration of the nature of the title of an assignee in insolvency to the real estate of his assignor. The legal title to the assignor’s unexempt real estate vests in the assignee by virtue of the assignment. The assignee, however, takes the title only in .trust for the benefit of the assignor’s creditors, no beneficial interest vests in him, and when the trust has been executed or the insolvency proceedings finally terminated, if there remains any real estate not disposed of by the assignee, it reverts to the assignor by operation of law. It follows that a substantial interest of some kind in his real estate remains in the assignor after he has made an assignment for the benefit of his creditors.
It was held in the case of King v. Remington, 36 Minn. 15, 29 N. W. 352, that the interest in his real estate remaining in the bankrupt was in the nature of a reversion; that the estate of the assignee in bankruptcy was similar in all respects, except its inception, to that of an assignee in a voluntary assignment for the payment of debts; and, further, that the assignment might be absolute and uncondition
King v. Remington was followed in First National Bank of Winona v. Randall, 38 Minn. 382, 37 N. W. 799, in which it was held that an assignor, who had made a general assignment for the benefit of his creditors, had such a reversionary interest in the assigned estate as to entitle him to move to dissolve an attachment levied thereon. It was followed again in Atwater v. Manchester Savings Bank, 45 Minn. 341, 48 N. W. 187, 12 L. R. A. 741, in which it was held that, where land was conveyed in trust to pay certain charges and debts, the grantor had - a residuary interest therein which was subject to the lien of an attachment or judgment; and again in Kinney v. Sharvey, 48 Minn. 93, 98, 50 N. W. 1025, the court holding that the title of an assignee or receiver for the benefit of creditors is merely official, and when creditors are satisfied, or the sequestration proceedings closed, any residue of the property belongs to the assignor without a formal conveyance. See also the case of Joswich v. Faber, 93 Minn. 387, 101 N. W. 614. Some general expressions were used by the court in the cases of Donohue v. Ladd, 31 Minn. 244, 247, 17 N. W. 381, and Ryan v. Ruff, 90 Minn. 169, 95 N. W. 1114, which, when read without reference to the' questions then before the court, would indicate that an assignor for the benefit of his creditors had no interest in the assigned estate. An examination of
We hold, upon principle and authority, that Mr. Dawson, after his assignment for the benefit of creditors, had a reversionary interest in the assigned estate, subject to be defeated by a sale thereof by the assignee pending the insolvency proceedings. This reversionary interest of the assignor in the assigned property was not similar to the interest of a debtor who holds the naked legal title unaccompanied by any beneficial interest therein. Fleming v. Wilson, 92 Minn. 303, 100 N. W. 4.
Nor are the cases of Baldwin v. Rogers, 28 Minn. 544, 11 N. W. 77, Horton v. Kelly, 40 Minn. 193, 41 N. W. 1031, Blake v. Boisjoli, 51 Minn. 296, 53 N. W. 637, and Arctz v. Kloos, 89 Minn. 432, 95 N. W. 216, 769, here in point; for they are based'upon the fact, clearly established in each particular case, that the debtor’s land was mortgaged for more than its value, and his interest therein was of no substantial value, and hence no conveyance he might make of the land would be fraudulent as to creditors. It is to be noted that none of those cases holds that, if the debtor had not sold the land, his interest would not have been subject to the lien of a judgment, and, further, that the doctrine cannot be extended to cases where the facts do not clearly bring them within the rule. Aultman & Taylor Co. v. Pikop, 56 Minn. 533, 58 N. W. 551; Fryberger v. Berven, 88 Minn. 311, 316, 92 N. W. 1125. In the case at bar the interest of the debtor was a substantial one, although it was liable to be defeated by a sale of the assigned property by the assignee. Therefore the judgment was a lien thereon. Was this interest subject to the lien of the defendant Murphy’s judgment against the assignor, entered and docketed before the insolvency proceedings were closed? We answer the question in the affirmative. Atwater v. Manchester Savings Bank, 45 Minn. 341, 48 N. W. 187, 12 L. R. A. 741; Fryberger v. Berven, supra. It follows that the judgments owned by the other defendants are liens upon an undivided one-sixth interest in the lot.
3. It is also urged by plaintiff that the term “appurtenances,” as used in the mortgage, is sufficient to include lot 5. The claim is
Order affirmed.
Reference
- Full Case Name
- NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY v. DANIEL MURPHY and Others
- Status
- Published