First National Bank v. Kreig

By the Court, Bioelow, J. (after stating the facts as above); The defendants plead that the mortgage to the plaintiff of July 28, 1890, was canceled, marked satisfied upon the records, and the new mortgage of August 14, 1891, taken for the purpose of escaping taxation thereon, and for this reason it is claimed that the latter mortgage is void, under the authority of Drexler v. Tyrrell, 15 Nev. 114, upon the ground that it was taken and made for the purpose of defrauding the revenues of the state of Nevada. To this it is replied that the mortgage, being the property of a national bank, was not subject to state taxation, and it seems admitted that if not, there could be no fraud in attempting to escape sueh taxation, which would be sufficient to defeat the mortgage. In State v. First National Bank of Nevada, 4 Nev. 348, it was held that sueh mortgages were not subject to state taxation. The defendants, however, contend that this decision was erroneous, and ask us to overrule the doctrine there announced. But we are of the opinion, aside from that case, that it is now well settled by the decisions of th'e supreme court of the United States, which in such matters is the final arbiter, that national banks are only subject to state taxation upon their real estate, and upon the shares of stock in the bank owned by the stockholders. (Ta lbot v. Silver Bow County, 139 U. S. 438; People v. Weaver, 100 U. S. 539; Rosenblatt v. Johnston, 104 U. S. 462; Covington City Nat. Bank v. City of Covington, 21 Fed. Rep. 484; City of Carthage v. National Bank, 71 Mo. 508; National Bank v. The Mayor, 62 Ala. 284; Pittsburg v. National Bank, 55 Pa. St. 45.) Such being the case, the matter is not now open for discussion in the state courts, and it would be useless for us to consider it further. 2. The deed made by Kreig to Nixon was merely to secure the money due the bank, to Mrs. Sloan and to Mrs. Kreig, and amounted simply to a mortgage. Taking the deed and the defeasance made by Nixon together, this is perfectly clear. If *408 the money was paid, the property would revert to Kreig; if not paid the only remedy of the parties would be an action for foreclosure, the same as upon any other mortgage. [Danzeisen’s Appeal, 73 Pa. St. 65; Harper’s Appeal, 64 Pa. St. 315; Sleinruck’s Appeal, 70 Pa. St. 289; Stephens v. Allen, 11 Or. 188; Brumfield v. Boutall, 24 Hun. 451; 2 Perry, Trusts, Sec. 602; Pom. Eq. Jur. Secs. 1192, 1196.) It is immaterial that it was made to a third person, instead of to the beneficiaries, and this fact does not change the nature of the security. (2 Perry, Trusts, Sec. 602, et seq.) The transaction was quite different from that of a deed of trust authorizing the trustee to dispose of the property, either to raise a fund or to pay a particular debt, which in California has been held to be a trust and not a mortgage [Koch v. Briggs, 14 Cal. 256); although the weight of authority is the other way. (Jones, Mortg. Sec. 1769.) Being simply a mortgage, which in this state amounts merely to an equitable lien upon the property, it could be released by parol. [Ackla v. Ackla, 6 Pa. St. 228; Howard v. Gresham, 27 Ga. 347; Griswold v. Griswold, 7 Lans. 72; Southerin v. Mendum, 5 N. H. 420; Leavitt v. Pratt, 53 Me. 147; Wallis v. Long, 16 Ala. 738; 2 Reed. Stat. of Frauds, Sec. 453; 3 Pom. Eq. Jur. Sec. 1183.) It follows that, if Mrs. Sloan and Mrs. Kreig consented to Nixon’s deeding back to Kreig, the mortgage was so released, for Kreig thereby became the holder in his own right, of both the legal and equitable title to the property, free from any incumbrance. They thereby waived any lien which they had held upon it, and thereafter Kreig owned it, the same as he owned any other property that had never been incumbered, and could sell or mortgage to others at his pleasure. The substance of the findings in the case is that they did so consent. This is supported by Nixon’s testimony and by the conduct and declarations of the parties, which are also competent evidence, and from which alone, if sufficient, it might be inferred that the agreement was made. (Ackla v. Ackla, 6 Pa. St. 228.) Nor are we able to say that the testimony supporting this finding is not clear and satisfactory. Taking it altogether, it seems reasonably certain that they did understand that Nixon was about to convey the property back to Kreig, that the effect of this would be to leave them without security upon the property, and that with this knowledge they consented to its being *409 ■done. There is no evidence of any fraud, deception, or overreaching- upon the part of the representatives of the bank. The most that can be said is that they drove some rather hard bargains upon the necessities of these people, whose misfortunes •came about through no fault of their own, but there is very little to show that all the transactions were not open, well understood and freely consented to by the defendants. Kreig •owed money which was a first lien upon his property, and which had to be paid. If not paid, and the property was sacrifieécl, there would be nothing with which to pay what he owed his wife and her mother, and nothing left for him. They were as much interested in obtaining this money as Kreig was himself, and the situation forced them to do whatever was necessary to be done in order to raise it. A full statement of the testimony would serve no useful purpose, and it is therefore omitted, Kreig being the absolute owner of the property on August 14, 1891, was, of course, at liberty to mortgage it', and we can see no reason why the mortgage then made by him is not legal and binding. The judgment and order refusing a new trial are affirmed.