Strehlow v. Fee

Bruce, Ch. J. This in an action for the reinstatement and foreclosure of two certain prior mortgages which plaintiff claims to have paid or purchased in order to protect his title, but to have released through mistake and in ignorance of the existence of three judgment liens. The first point raised by the defendants and appellants is that a demurrer was formerly sustained to the complaint, and that the amended complaint was practically a repetition thereof. They, therefore, urge that the matter was res judicata, and that their motion to strike the am'ended complaint from the files should have been sustained, regardless of the sufficiency in law of the original or amended complaint. There is no merit in this contention. The learned trial court, on the motion to strike out, reversed the ruling of his predecessor in office [65] on the former demurrer, and held that it was erroneous. He had certainly the right while he yet retained jurisdiction to correct that error, if error there was. The authorities cited by counsel for appellants merely announce the rule that where a second complaint only restates a former one to which a demurrer has been sustained, a motion to strike out will lie, and no second demurrer need be filed. They do not hold, and it by no means follows, that on such motion the court may not reconsider its former ruling and correct the error if the demurrer was improperly sustained. There is no doubt in our minds that this may be done. Clopton v. Clopton, 10 N. D. 569, 88 Am. St. Rep. 749, 88 N. W. 562; Post v. Pearson, 108 U. S. 418, 27 L. ed. 774, 2 Sup. Ct. Rep. 799; Sim v. Rosholt, 16 N. D. 77, 11 L.R.A.(N.S.) 372, 112 N. W. 50; Plano Mfg. Co. v. Doyle, 17 N. D. 386, 17 L.R.A. (N.S.) 606, 116 N. W. 529; Bergen Twp. v. Nelson County, 33 N. D. 247, 156 N. W. 559. This brings us to a consideration of the question whether the complaint did, in fact, state a cause of action. We think it did. It prays for the foreclosure of two mortgages, and, as preliminary thereto, that the same be reinstated and a former satisfaction of the same be canceled and held for naught. It alleges that on February 12th, 1907, the defendants Edward E. Fee and May Fee executed and delivered to the plaintiff a note and mortgage for the sum of $1,000; that prior to the execution and delivery of this mortgage, and on June 8th, 1903, the said Fee had given two mortgages on the same lands to one Adam Hannah to secure the payments of $500 and $96.25, respectively; that on December 5th, 1908, the plaintiff, in order to protect his mortgage lien, paid the amount due on these prior mortgages to the said Adam Hannah, and that on March 23d, 1909, the said Hannah satisfied the same, the said satisfaction being placed oh record on that date; that on March 13th, 1908, the defendants C. Gr. Conn Company and Rockford Silver Plate Company recovered judgment against the mortgagor Edward E. Fee for $219.65 and $145, respectively, and filed transcripts thereof; that ou April 14th, 1908, the defendants W. J. Dyer & Brother also recovered a judgment for $116.95, and docketed the same. It then alleges that thereafter, and on February 23d, 1909, Edward E. Fee and wife, for a stated consideration of $1, deeded their land to [66] tbe plaintiff, Strehlow, and represented that the land was clear of all encumbrances, except those of record, and that said deed was recorded on March 1st, 1909. It then alleges that at the time of procuring this deed the plaintiff, Strehlow, who was then a resident of Casselton in Cass county, procured an abstract of the land from a competent and duly licensed abstractor of Rolette county, where the land was situated, but that such abstract did not show the C. G. Conn Company, Rockford Silver Plate Company, and Dyer & Brother judgments before mentioned, and that the plaintiff, Strehlow, in ignorance of and without notice of the same, - on April 2d, 1909, satisfied of record the said Fee mortgage of September 12th, 1907, which would otherwise have been superior to the judgments before mentioned. It then alleges that thereafter, with full knowledge of the mistake of fact on the part of the plaintiff, the defendant C. G. Conn & Company sold the property under its judgment, and itself became a purchaser at the sale, the said sale being confirmed on September 23d, 1911. It then alleges that the Fees are insolvent. The complaint then, for a further cause of action, makes substantially the same statement and allegation concerning another mortgage executed to him by the Fees on February 25th, 1908, for $400. It then prays for the cancelation of the satisfactions mentioned; that plaintiff’s mortgages for $1,000 and $400, respectively, be reinstated; that such mortgages be foreclosed, and that the lien for the sums due thereon, together with interest and taxes paid, and the' amount paid for the satisfaction of the mortgages to Adam Hannah, be declared superior to the liens of the judgments and sales of the defendants C. G. Conn Company, Rockford Silver Plate Company, and W. J. Dyer & Brother. This complaint certainly sets forth a good cause of action, and this in spite of the fact that it does not allege that the plaintiff searched the records in order to ascertain the correctness of the abstract furnished him. The rule of law, indeed, is well established that where an instrument has been surrendered or discharged, or an encumbrance or charge has been satisfied through mistake, the party making the same is entitled to be replaced in his original position, provided only that other creditors have not been induced by the action of the plaintiff [67] or petitioner to change their position, and have not lost any substantial and material rights by such action. 2 Pom. Eq. Jur. § 871; 27 Cyc. 1433; White v. Stevenson, 144 Cal. 104, 77 Pac. 828; Pearce v. Buell, 22 Or. 29, 29 Pac. 78; Young v. Shaner, 73 Iowa, 555, 35 N. W. 629; Ricker v. Stott, 13 S. D. 208, 73 N. W. 47; Woolson v. Kelley, 73 Minn. 513, 76 N. W. 258; Bowen v. Gilbert, 122 Iowa, 448, 98 N. W. 273; 58 L.R.A. 794, note; McConnell v. American Nat. Bank, 59 Ind. App. 319, 103 N. E. 809. We have examined the eases cited by counsel for the appellants and none of them shake our conviction in the correctness of the rule announced; nor does the record disclose that the defendants lost anything or surrendered any rights on account of the mistake of the plaintiff; nor is the plaintiff precluded from recovering by reason of the fact that he relied upon the abstract and failed to examine the original records; nor is there any merit in the contention that the evidence fails to show the exact date to which the abstract was continued. The question, indeed, is one of mistake, and not of negligence. It is not a case of an interference with any vested rights. It is not a case for the application of the rule that where one of two innocent persons must suffer, he whose act first made the loss possible must bear the burden. The judgment creditors lost nothing by the mistaken action of the plaintiff. Their judgment liens are still intact. The satisfactions were not executed until the 30th day of March, 1909, nor recorded until the 2d day of April and the 20th day of April, respectively. The mistake was not ascertained by the plaintiff until May 22, 1909. Soon after discovering the same the plaintiff notified the defendant O. G. Conn Company of the fact and commenced this; action in 1911, and prior to these times the judgment creditors had not changed their position, nor sought to enforce their judgments, although after the notice to it and on the 16th day of September, 1911, the defendant C. G. Conn Company, sold the property under its execution-It is clear, too, from the record that before executing the releases ins question the plaintiff wrote to and instructed the Bolette Abstract Company and his attorney, C. B. Gailfus, only to place the satisfactions upon record provided that “there were no intervening liens or encumbrances which have taken effect subject to the executions or mortgages, and only if they were convinced that the record title would be [68] clear.” Such being the case, there can be no ground for denying the plaintiff relief on account of negligence or for any other cause. 27 Cyc. 1433, and cases before cited. Even though the abstract company and Gailfus may have, to a certain extent, been the agents of the plaintiff, Strohlow, it is clear that they too acted as the result of a mistake, and, as we before stated, this is not a case where negligence is involved or is material. Nor is there any merit in the contention that the evidence does not sustain the finding of the trial court that “the two Hannah mortgages were due and owing, and that cause for foreclosure existed on December 5th, 1908, and that satisfactions of the same were delivered in lieu of assignments.” It is clear that the satisfactions were executed as a result of a mistake of fact. It is also clear that the foreclosure was not sought until a time long past the maturity of the notes. The judgment of the District Court is affirmed.