Sailer v. Mercer County
Sailer v. Mercer County
Opinion of the Court
This is an action to quiet title. See Section 32-1701, Chapter 32-17 PC 1943. The defendant Smith answering, the other defendant defaulting, challenged the right of the plaintiff to bring the action on the ground that the plaintiff had no such right or interest in the land involved as to entitle him to bring the action. The case was tried to the court. Judgment was ordered and entered for the plaintiff. Whereupon Smith perfected the instant appeal.
The pertinent facts stated briefly are substantially as follows: Gr. R. Brainard owned a half section of land, the north half of Section 31, Township 146, Range 89 in Mercer County, North Dakota. In 1931, Brainard mortgaged this land to A. Bidwell, a resident of Freeport, Illinois, to secure a loan of $1500.00 and interest. This loan was never repaid. Taxes for 1935 were not paid and the land was sold at -tax sale. The county purchased and received a tax sale certificate therefor. In 1937, Brainard rented the land to Albert Miller who continued to rent it from him until 1942. In February, 1942, the certificate of tax sale for the year 1935 ivas sold and assigned to the defendant, Grace J. Smith. She at once instituted proceedings to procure a tax deed. Accordingly on February 27,1942, notice of expiration of
On March 12, 1942, the plaintiff wrote to the Freeport Securities Company of Freeport, Illinois, as follows:
“I am interested in communicating with one A. Bidwell whose postoffice address is given as Freeport, 111. This party apparently holds a mortgage against a half section land in- Mercer County, N. Dak. on which the tax certificate holder is calling for a deed.
“I would appreciate if you could give me the full address of this party, or if deceased the name and address of the successors in interest, or administrators. . . .”
In response to this letter plaintiff received the following letter dated March 26, from Hunter & Hunter, attorneys of Freeport:
“We represent the party who holds the mortgage against the North half of Section 31,146-89 located in Mercer County, North Dakota about which you inquired through the Freeport Securities Company of Freeport, Illinois.
“We are informed that the land has a value from $2.50 to $3.00 an acre and that there are approximately $171.00 taxes against it. There are other parties interested in this land and if you would care to make an offer for our mortgage we would be pleased to give it consideration.”
On May 12 thereafter, plaintiff, wrote Hunter & Hunter :
“Referring to your letter of March 26th relative to the mortgage running to A. Bidwell I would pay $60.00 for a proper assignment of the mortgage and notes, at this time. I know this amount is small but it is my belief that a foreclosure on my part ivotild involve litigation. If you have not disposed of the same I should be glad to see if some neighbor would not be interested
“I would consider your information as to the value of the land about right. But I believe the total amount of taxes would be slightly more and then an additional two years taxes would accrue before title could be obtained. Also one poor crop together with the present “war freezing” would set back the prices.
“If my offer is acceptable to you can send the papers with assignment in blank to me or the Union State Bank of liasen for collection.”
On July 10,1942, Hunter & Hunter wrote the plaintiff:
“Enclosed please find assignment of original mortgage of G.. R. Brainard and wife to A. Bid-well, together with the mortgage and note and abstract for which we will expect to receive the sum of $60.00. "We are sending the papers direct to you and not the bank for collection inasmuch as we are relying on your integrity to promptly forward it to me.”
This letter was received but the notes and mortgage -\vere returned to Hunter & Hunter for endorsement and assignment. A new assignment was requested for the reason as stated by Sailer that he wanted it on a North Dakota form. This assignment was executed on July 27, 1942, and the notes, mortgage, and assignment were then returned to the plaintiff. The assignment was filed for record by plaintiff in the office of the register of deeds of Mercer County on August 26. The assignee therein named was Albert Miller. Whether he was thus named as assignee when the instrument was executed or his name was later-inserted by the plaintiff does not appear, but the inference is justified that Miller’s name was later inserted.
On July 18, 1942, plaintiff and Albert Miller entered into the following written agreement :
“THAT WHEREAS, R. J. Sailer is the owner of a first mortgage against the North Half (N-|-) of Section Thirty-one (31) in Township One Hundred Forty-six (146), North of Range Eighty-nine (89) West in Mercer County, North Dakota, said R. J. Sailer, being the owner of said mortgage by virtue of an
“AND WHEREAS, The said Albert Miller is desirous of becoming the owner of said mortgage, it is therefore agreed by and between the parties hereto as follows :
“That the said R. J. Sailer as party of the second part agrees to assign said mortgage unto said Albert Miller as.soon as the notes which are secured by said mortgage have been properly endorsed and it is further agreed that foreclosure proceedings shall be immediately commenced in the name of the said Albert Miller; that in the event that said foreclosure proceedings are consummated, and result in Sheriff’s Certificate, that the said Albert Miller agrees to pay unto the said R. J. Sailer, the sum of Seven Hundred and no/100 ($700.00) Dollars. He shall, however, be allowed deductions for attorneys fee and unpaid real estate taxes and moneys to be advanced for the redemption of taxes, the amount of said taxes to be figured at $150.00.
“IT IS FURTHER AGREED That in the event that the foreclosure proceedings should not be completed, it is agreed that the said Albert Miller will reassign said mortgage unto R. J. Sailer and said R. J. Sailer as party of the second part will then pay the costs incurred for attorneys fees, and so forth.
“IT IS-FURTHER AGREED That of the $700.00 hereinbefore referred to, that the said Albert Miller will pay the sum of $500.00 to R. J. Sailer when Sheriffs Certificate is issued, and the balance of $200.00 on or. before the 1st day of October, 1943.”
In March, 1943, notice of intention by Miller to foreclose the mortgage in question was served.upon the defendant Smith. Smith knew there was an outstanding mortgage to Bidwell on record but had no notice or knowledge that-either Miller or plaintiff had procured an assignment of it. Miller wished to retain possession of the land and when Smith went -to him after receiving notice of the intended foreclosure and told him that she did not care to rent the premises to him -if he were foreclosing, but ivould rent to him if - he would renounce all claims against the land, he agreed to such an arrangement. Smith then on April -6, 1943, executed a lease to him and nothing further was done by
Predicated on the facts as above set out, the parties to this action advance the following contentions which we deem vital to the determination of the issues raised and which therefore require consideration. 'It is conceded that the defendant holds a tax deed to the premises herein involved and is in possession under this deed. She contends that whether or not the deed is good and valid such possession is under color of title and adverse; that she asks no affirmative relief but merely challenges the right of the plaintiff to bring the action; that plaintiff seeking to quiet title and determine adverse claims .pursuant to the provisions of the statutes, Chapter 32-17 RC 1943, to prevail, must do so on the strength of his own title; that she being in possession under color of title may challenge the right to maintain an action to quiet title and determine adverse claims as against her; that in the instant case the plaintiff claims title through and under a sheriff’s deed acquired by foreclosure of a mortgage, which, though executed and delivered prior to the time when her adverse possession began, was thereafter assigned .to the plaintiff while she was in such possession; that plaintiff bought the note and mortgage in question for the purpose and with the intention of bringing suit thereon;, that therefore the purchase and assignment' of the note and mortgage were champertous, ineffective, and void as being in violation of and proscribed by the provisions not only of Section 12-1714 RC 1943, but also of Section 12-1719; that accordingly the plaintiff has no right, title, or interest in the land such as entitles him to maintain the action against her. .
The law is firmly established in this state that one seeking to determine adverse claims and quiet title pursuant to the provisions of the statute, Chapter 32-17 RC 1943, supra, must recover, if at all, upon the strength of his own title and not upon the weakness of his adversary’s title. Hannah v. Chase, 4 ND 351, 61 NW 18, 50 Am St R 656; Conrad and Roll v. Adler, 13 ND 199, 100 NW 722; Johnston Land Co. v. Mitchell et al, 29 ND 510, 151 NW 23; Nord v. Nord, 68 ND 560, 282 NW 507; Robertson v. Brown, 75 ND 109, 25 NW2d 781.
It is likewise well established that one who occupies and is in possession of land pursuant to a tax deed is so under color of title. That such possession is adverse and the occupant’s title becomes material only when he who challenges it shows in himself a right superior to the right of the possessor. Hannah v. Chase, supra; Woolfolk v. Albrecht, 22 ND 36, 133 NW 310; Robertson v. Brown, supra.
Section 12-1714 ROND 1943 provides:
“Every person who buys or sells or in any manner procures, or makes or takes any promise or covenant to convey any pretended right or title to any lands or tenements, unless the grant- or thereof or the person making such promise or covenant has been in possession, or he and those by whom he claims have been in possession of the same, or of the reversion and remainder thereof, or have taken the rents and profits thereof, for the space of one year before such grant, conveyance, sale, promise, or covenant is made, is guilty of a misdemeanor.”
Section . . 12-1714 shall not be construed to prevent any person having a just title to lands, upon which there shall be an adverse possession, from executing a mortgage upon such lands.”
Section 12-1719 provides:
“Every attorney and other person prosecuting a suit or demand in person, who, either directly or indirectly, buys or is interested in buying any evidence of debt or thing in action with intent to bring suit thereon, is guilty of a misdemeanor.”
When Bidwell’s mortgage was executed and delivered to him, the mortgagor, Brainard, was the owner and in possession of the mortgaged premises. There is no question as to the validity of this instrument. But when the plaintiff bought and procured the assignment of the Biclwell note and mortgage defendant was in possession of the premises under color of her tax deed.
The defendant’s first challenge is predicated on the fact that at the time it was assigned to the plaintiff the property mortgaged was adversely held and therefore the assignment was void as contrary to the provisions of Section 12-1714, supra. We are of the opinion that this challenge of the assignment cannot be sustained. North Dakota inherited Section 12-1714 from Dakota Territory. It was enacted by the Territorial Legislature in 1876. See Section 189 of the Penal Code, Dakota Bevised Codes of 1877. It doubtless was transcripted from a statute of the State of New York with which it was identical. The case of Tobias v. The Mayor, 17 Hun 534, decided in 1879 was practically identical with the case at bar. There the mortgage in question was executed and delivered March 1, 1871. The property mortgaged was taken by condemnation proceedings in February, 1874, and was thereafter held adversely to the mortgagor. The mortgage was assigned to the plaintiff Tobias in February, 1876. He thereafter asserted a claim predicated on this assignment. Its validity was challenged on the ground that it was void because forbidden by the statute. The court passing upon the question thus raised said:
“We are unable to perceive why the mortgage could not be
It seems to us that the reasoning of the paragraph quoted above is sound and is as pertinent today as at the time that paragraph was written, and we have been unable to discover any authority holding to the contrary. Accordingly the assignment in the instant case was good and the challege thus interposed cannot be sustained. See also in this connection Galbraith v. Payne, 12 ND 164, 96 NW 258; State Finance Co. v. Halstenson et al, 17 ND 145, 114 NW 724; 11 CJ, Champerty and Maintenance, Sec. 93, p. 267.
But the defendant also contends that the assignment was champertous because taken in violation of the provisions of Section 12-1719, supra, and therefore ineffective and void. It is exceedingly difficult to draw the line between those instances where a chose in action is purchased with a proper purpose and intent, and where it is purchased contrary to the provisions
The defendant asked for no affirmative relief. We do not pass upon the question as to whether her tax deed is good 01-bad. We leave the parties where we found them.
The defendant Mercer County defaulted. The plaintiff in his pleadings alleged that he was ready, willing, and. able to pay to the county any amount that might be found due to it on account of taxes on the property involved. The court in his findings of fact stated that pursuant to this offer and at the court’s direction plaintiff had deposited in court the sum of $300.00 to redeem the taxes against said property, and the judgment provides that such money “be applied in redemption of taxes required to be redeemed from the tax sale.” In view of what we have said in the foregoing opinion, the plaintiff is in no position to make redemption. Therefore, he may apply for and have returned tó him the deposit made as stated above.
Judgment reversed and action dismissed.
070rehearing
(On petition for rehearing.) The plaintiff and respondent has filed a petition for rehearing. He predicates his petition on three propositions. 1. “That the Court erred in finding and in concluding as a fact that the respondent purchased the note and the mortgage securing the payment thereof with intent to bring suit thereon in violation of Section 12-1719 EC 1943.” 2. “That the-Court erred in assuming without deciding that the appellant Smith could challenge the validity of plaintiff’s deed (obtained through foreclosure of the mortgage) on the ground that it was champertous even, though she was not a party to the transaction or contract of purchase of the assignment.” 3. “That the Court erred in holding (by necessary implication) that the appellant could collaterally attack the validity of respondent’s deed in this action which he had obtained through the foreclosure of the mortgage acquired by .purchase of an assignment.”
As to the first proposition, it is enough to say that the question as to whether there was a violation of Section -12-1719 EC 1943 was fully considered in the opinion filed and we discern no reason for departing from the holding there announced.
As to the second proposition advanced in the petition for rehearing, we are of the opinion that the petitioner has either misread or misconceived the holdings in the greater number of those authorities on which he relies to sustain his contention. His contention is that the appellant Smith could not challenge the validity of respondent’s deed because Smith was not a party to the transaction involving the purchase of the note and mortgage and the defense of champerty can be invoked only by a party to the champertous agreement in a proceeding where such contract is sought to be enforced.
After a further extensive research and a meticulous reexamination of the authorities dealing with this question, we are confirmed in the opinion -that a majority of the authorities approve and sustain the rule that while a third person may not take advantage of champerty as against the original owner of a chose in action, that defense is available to a third person in an action brought by a champertous assignee thereof. This rule is, in our
In Galbraith v. Payne, 12 ND 164, 96 NW 258, an action to quiet title, this court said: “Section 7002 (Section 12-1714 RC 1943) makes it a misdemeanor for any person to convey any pretended title to lands, unless he or those under whom he claims have been in possession or have taken the rents and profits for one year before his conveyance. The deed upon which- the plaintiff relies to establish his title- was executed in violation of this section. It was, therefore, void, as contrary to the express provisions of the statute, and contrary to the policy of the law of this state as expressed in said section. See section 3920, Rev. Codes (Section 9-0801 RC 1943).”- And the court held that the plaintiff could not recover as against the defendant who was in adverse possession when the conveyance to plaintiff was executed. This holding has been approved and followed in a great many cases in this court. Among the latest of these cases are Robertson v. Brown, 75 ND 109, 25 NW2d 781; and Sailer v. Mercer County, 75 ND 123, 26 NW2d 137. Clearly, insofar as the effect of a violation of Section 12-1714 is concerned, it is identical with the effect of a violation of Section 12-1719 with which we are here dealing. See also Hudson v. Sheafe, 41 SD 475, 171 NW 320. And this is at least the implication of our holding in Woods v. Walsh, 7 ND 376, 75 NW 767; and in Starke v. Wannemacher, 32 ND 617, 156 NW 494, 4 ALR 167. See also in this connection Colville v. Small, 22 Ont L Rep 426, 19 American and English Annotated Cases 515, and authorities cited in note; Prosky v. Clark, 32 Nev 441, 109 Pac 793, 35 LRA NS 512, and authorities cited in note; 10 Am Jur 572; 14 CJS 382.
The petitioner, in support of his contention, .relies among other cases upon Burnes v. Scott, 117 US 582, 29 Law Ed 991, 6 Sup Ct Rep 865; and Woods v. Walsh, supra. But in Woods v. Walsh, Judge Wallin writing the opinion, said “The statute in this state has singled out -certain agreements which were champertous at common law, and declared that the same are misde
The case of Prosky v. Clark, 32 Nev 441, 109 Pac 793, 35 LRA NS 512 also is cited and relied upon by-the petitioner. This was an appeal from an order granting a motion for nonsuit. The action was brought by the appellants, Prosky and Clark, as plaintiffs. The court said: “The motion for nonsuit was granted upon the sole ground of an alleged champertous con
“In the view we take of this case, it is unnecessary to determine the question whether the agreement entered into between appellants Prosky and Hafer was in fact champertous, nor (or) to determine the extent to which the doctrine of champerty prevails in this state.” The court then went on, and after citing numerous cases, in the greater number of which the facts were similar to those in Burnes v. Scott and Woods v. Walsh, said: “conceding, for the purposes of this case, that the contract between Hafer and Prosky was void for champerty, only the alleged right of action of Prosky would be affected. All the right of action was held either by Hafer alone, or by Hafer and Prosky jointly. In either event, a motion for a nonsuit could not be supported upon the theory that the conveyance or assignment from Hafer to Prosky was void for champerty.” So it seems to us that Prosky v. Clark is an authority of little, if any, value in support of the petitioner’s contention.
Now as to the third contention. To restate the facts: In the instant case the petitioner procured an assignment of the mortgage on the premises here'involved. The appellant Smith had acquired a tax deed to these premises and was in possession thereof under color of this deed. The assignment challenged was purchased contrary to the provisions of Section 17-1719 and was champertous. The petitioner brought a hybrid action to foreclose the mortgage and to quiet the title as against the appellant’s tax deed. She demurred. The court sustained the demurrer and dismissed the case as against her. Thereafter the petitioner had judgment of foreclosure. The premises were sold under that judgment and petitioner, purchasing at the sale, acquired the deed under which he now claims.' His contention is that in the foreclosure action, based upon the mortgage thus assigned, the court, having ordered judgment of foreclosure, necessarily must have found him to be the owner of the mort
Petition denied.
Reference
- Full Case Name
- R. J. SAILER, Respondent, v. MERCER COUNTY, a Public Corporation, and Grace J. Smith, Also Known as Grace L. Smith, Appellant
- Cited By
- 8 cases
- Status
- Published