Klabunde v. Byron Reed Co.

Glanville, C. This is an appeal from the judgment of the district court for Douglas' county dismissing the plaintiff’s, action upon a general finding for the defendant, with the finding that the claim of the petitioner as set out in his petition is without equity. The petition of the plaintiff covers some fifteen pages and no good purpose would be subserved by copying the same. The bill of exceptions contains 838 pages. The earnestness of the attorney for the plaintiff, manifested in his brief and oral argument, has helped to give us an interest in the case and rendered its examination less tedious than it might otherwise have been. The action is one in equity to secure the vacation of a decree of foreclosure, in an action brought by the defendant against the plaintiff and others, affecting lands in Douglas county, and for a new trial in said action. Much is set up in the petition that we need not refer to; suffice it to say that the plaintiff claims that the mortgage sought to be foreclosed was never given by himself; that another mortgage which was found to be a lien prior to — 121 — that of the plaintiff, had been given to the plaintiff for a much greater sum than was due; that he never knew that the action, in which the decree sought to be set aside was rendered, was one for the foreclosure of any mortgage; that he was induced by the defendant in this action to employ the same attorney who filed the petition for the foreclosure, and that he supposed the only issue litigated in that action was between himself and his son August. It seems that the plaintiff’s wife had originally owned the property and had died, devising the same to the son August, with the provision in the will that it should constitute a mortgage in favor of the plaintiff to secure the pay.ment to him, from his son, of the sum of $150 annually, and a home and board, both to continue during life. Trouble had arisen between the plaintiff and his son, and the plaintiff was desirous of securing his rights under the will, or else of breaking the will, and obtaining possession of the land. Soon after the service of summons upon the plaintiff in the foreclosure action, the plaintiff, who is an elderly German, and claims not to be able to speak or understand English, went to the office of the defendant company, with a friend to act as interpreter; the visit resulted in a subsequent visit to the attorney who had filed the petition upon the mortgage. The plaintiff claims that a contract was made between himself and the defendant, through the attorney; that the defendant was to help him in securing relief against his son, and that defendant would eventually take the land and pay him the sum of $2,800, in instalments of $250 each year. That the payments were to be made in some way through the court, and that he was to go to the court house each year and get his money, and that a contract or paper was drawn by the attorney to that effect. It appears that the attorney drew up an answer for the plaintiff, which was filed in the foreclosure action, admitting the giving of the mortgage sought to be foreclosed and the existence of the prior mortgage which the plaintiff now claims to have been fraudulent, and which answer set up, very properly, the plaintiff’s claim of a lien upon the ptrem — 122 — ises by virtue of the will above mentioned, claiming a lien for $150 a year on account of the money payment directed, and $100 a year for home and board, which had. been refused him by his son. Another item in this answer, which will hereafter appear to be significant, is an admission of the existence of a mortgage subject to the one being foreclosed. We are fully satisfied from the evidence, that this answer is the paper which the plaintiff now seems to believe constitutes a contract, that he should get his money from the court house in sums of $250 each year. During the examination of the plaintiff as a witness in this action, the following evidence was given in regard to what took place between him and a Mr. Reed, representing the defendant company: Q. Was there anything said as to how much you should have out of the land? A. Yes. Q. What was said? A. He says (this is the language of the interpreter), Mr. Reed had a $3,100 mortgage on the land, he says some cents, he don’t how much. By Mr. O’Connor: Q. Give us Avhat he said: A. He said that Mr. Reed said he had a mortgage of $3,100 and some cents on the land, he further says, there was still $2,800 would remain for him. $2,800 would be left for him. In answer to another question he said: A. He was to have $300 and that was to be paid $300 per annum and that was to be paid into the court house for him. In answer to another question, this was giAren: A. He says he would be satisfied with $250 per annum. Q. What did (naming the attorney) say to you? A. He says he drew up a paper that he was to’ have $250 per annum, and that he was to get that at the court house. Q. Now did (naming the attorney) Avrite that doAvn on paper, that you should have $250 each year and get it at the court house? — 123 — A. He says he read it to him from the paper. Q. Did he ask you to sign the paper? A. He says yes. Q. Did you sign it? A. He says he made a cross. Q. Did- he give you that paper or a copy of it? A. No. He says he kept the papers. Q. Do you know where it is? A. He says he does not know where it is. It is supposed to he in the court house, or should be in the court house. There can be no doubt that the paper referred to is his answer; he signed the verification by his mark, and the prayer contains the words “and should any surplus remain, that the same shall be retained by this court to pay this defendant any amounts accruing to him by reason of his lien on said premises as aforesaid.” The theory upon which the answer was drawn is, that any surplus remaining after the satisfaction of the mortgage, upon a sale of the property, would belong to the son, subject to the plaintiff’s lien for the annual payments and the value of his home and support, and that the court would, in its decree, provide for annual payments of $250 each to the plaintiff. Afterward, the plaintiff employed another firm .of attorneys to represent him in the case, and an amended answer was filed by them, which differed from the other answer, so far as the mortgages are concerned, only in the denial of the subsequent mortgage a,s one joined in by himself, and a claim of part payment of a small prior mortgage. His reason, as he claims, for securing the services of the other attorneys was, that one of them could speak German. They, alone, represented him thereafter to the end of the case. We say, the fact, that this subsequent mortgage was admitted in the first answer and repudiated in the amended answer, is significant, because it shows conclusively that there must have been some talk between him and his new attorneys as to the action being one involving the mortgage liens. No claim is made either in the pleadings or the — 124 — evidence that his new attorneys were not fully competent; that they did not act in the best of faith; that he was induced to secure their services by the advice or suggestion of the defendant or that there was any collusion between' them and the defendant. The foreclosure suit was tried upon the issues made by the other pleadings and plaintiff’s amended answer and resulted in a decree in favor of this plaintiff, subject to the lien of the mortgages admitted in his answer in the sum of $3,398.90, as a lump sum, equivalent to the annual payments due him and the value of home and board, based upon his expectancy under the Carlisle tables. In the decree the court found the value of the home and board secured by the will to be $150 per annum, instead of $100 as is claimed in both answers. Subtracting the difference which this made in the amount due, it would leave a little over $2,800 as plaintiff’s claim, which is the amount he claims was to be coming to him, and the decree fixes the amount of prior liens at $3,125.25. The court below refused to allow evidence to be introduced showing fraud in the inception of the mortgages. Of course such fraud could not alone justify setting aside the decree based on the mortgages because, “fraud in an antecedent transaction not connected with the judgment is not of itself sufficient.” “Fraud which is available as a ground for avoiding a judgment by a court of equity, must have intervened in the action or proceeding in which the judgment was obtained.” Shufeldt v. Gandy, 34 Neb. 32. Such evidence, however, may have been competent to show that the plaintiff had a good defense to the former action, and because of its exclusion we have refrained from discussing the question of the sufficiency of the evidence to show the existence of such defense. Many things are complained of by the plaintiff which have no bearing upon his rights; much is said about his being informed by the defendant that the son, August Klabunde, had appealed the case, and that he did not find out that the appeal had not been perfected until it was too late — 125 — for the plaintiff herein to appeal. From the record it appears that the plaintiff obtained in that action the utmost that could be given him under his own pleadings, and it is evident that an appeal by himself was not contemplated. Much stress is laid by the plaintiff’s present counsel, upon the fact that he is a German, aged, and somewhat enfeebled in mind, and we suspect that these are reasons why he is now mistaken about what took place between him and the defendant and his attorneys during the pendency of the foreclosure action. There are many other things in the record and evidence that have helped to lead us to the conclusion we have reached, but no good would be accomplished by mentioning them in this opinion. We have examined the record and evidence with care, aided by the briefs of counsel, and are satisfied that the judgment of the lower court is right and should be affirmed. The plaintiff no doubt Was disappointed in the final result of the former action, but we believe his interests were looked after properly therein by all of his attorneys; but if not, this court has held: “A court of equity will not afford relief against a judgment or decree obtained against a party through the negligence of his attorney.” Funk v. Kansas Manufacturing Co., 53 Neb. 450. The practice by attorneys of taking charge of the interests of parties on opposite sides of adversary proceedings is not to be commended and, when there is any real contest between the parties, can not be too severely condemned by the courts; but it is not uncommon, or always improper, for the.same attorney to represent prior and subsequent lien-holders in the same action, when there is no dispute as to priority and amount. We agree with the lower court in its findings, and recommend that the judgment appealed from be affirmed. Barnes and Albert, GO., concur. 1. New Trial: Equity: Theory oe Case. In an equitable action for a new trial, evidence offered for the purpose of proving the plaintiff had a substantial and meritorious defense in the prior action was objected to and excluded on the ground of irrelevancy and immateriality, and a ruling of the trial court procured limiting the evidence to the alleged ground of fraud, and the suit was tried upon that theory. Held, on appeal to this court from a judgment dismissing the suit, that it is proper to adopt the same theory in determining whether the pláintiff is entitled to a new trial and that, for the purpose of the case, it will be assumed that a valid and meritorious defense existed in his favor in the original action. 2. -: -: Fraud. Equity will relieve against a judgment or decree on the ground of fraud, actual or constructive, committed by the successful party or where, from excusable neglect, a defendant has been prevented from interposing a meritorious defense or establishing grounds entitling him to affirmative relief in such action. 3.-: -. The plaintiff, a German advanced in years, illiterate and unable to speak or understand the English language, was made a defendant in a mortgage foreclosure proceeding, affecting land in which he had an equitable interest under the provisions of a will made by his deceased wife. After the commencement of the suit, he conferred with the plaintiff and, at its suggestion,' counseled with its attorney who drew his answer asserting his equitable interest in the land but admitting that it was inferior to the plaintiff’s under its mortgage; a decree was entered accordingly and the land sold for little more than enough to satisfy the prior lien. The defendant acted throughout the litigation under the belief, induced by the plaintiff and its attorney, that his interests and those of the mortgagee were harmonious and that he should secure the full amount due him under the provisions of the will by a sale of the land. Held, under the facts and circumstances as delineated in the opinion, that he was not culpably negligent in adopting the course pursued and that the loss of substantial rights, by reason of his equitable interests in the land being fixed as a junior lien, was brought about from causes which render it proper for equity to intervene and grant a new trial. — 126 — By the Court: The conclusions reached, by the commissioners are approved, and it appearing that the adoption of the recommendations made will result in a right decision of the cause, it is ordered that the judgment of the district court be Affirmed.