McCaull Webster Elevator Co. v. Hoffman

Robinson, J. This is an appeal from a judgment subjecting the mortgage liens of Carl Tallmadge and his father to the prior rights of the plaintiff because they had both actual and constructive notice of such prior liens. The facts are not in dispute. In May, 1917, the Moreau Xaimber Company, of Aberdeen, S. D., owned the land in question' and 1068 contracted to sell the same to Anna Bernauer for $1,525. She made default in payment, and the lumber company obtained a judgment foreclosing the contract unless on or before May 10, 19x8, she pay or deposit with the clerk of the court the sum due, $1,467.66. Claiming as mortgagees the right of redemption on May 10, 1918, the. plaintiffs deposited with the clerk of the court $1,467.66, and at once commenced this action and filed a lis pendens. In the meantime Carl Tallmadge, who was the agent of Anna Bernauer, paid to the lumber company $1,467.66 and obtained an assignment of the judgment to himself and also a deed of the land. Then he presented the papers to the clerk of the court and received the redemption money, $1,467.66. Then he quitclaimd the land to Anna Bernauer, and subsequently, on June 18th, put on record her mortgage to his father to secure a loan of $2,500 and interest, and a commission mortgage to himself for $557-5°- As the trial court finds, the loan was not completed or any money paid on it until June 28, 1918, and as agent of Anna Bernauer, Carl Tallmadge received the deposit from the clerk of the court and used the same as part of the purchase price of the land. Certain it is that as agent of Anna Bernauer he received the assignment of the judgment, the deed, and the redemption money. He cannot be heard to say that he received the same as a wrongdoer. The mortgage under which plaintiff put up the redemption money was adjudged void, but that is a matter of no consequence. A party may not accept redemption money, deny the right to redeem, and retain the money. If Carl Tallmadge did not pay to Anna Bernauer the money, or use it for her benefit, that is a matter between them. He may still have to account to her. He admits that, so far as it concerns Anna Bernauer, the judgment which gives the plaintiff a prior lien on the land is right, but claims that it is wrong in giving the lien prior to the mortgages subsequently recorded for a loan subsequently made, with actual and constructive notice of the plaintiff’s prior right. In all that Carl Tallmadge did he acted as agent for Anna Bernauer, and as agent for his father, and defendants cannot deny the fact that he had actual and constructive notice of the facts. As an honest man he had no reason or excuse for defending the action or taking the appeal. Judgment affirmed, with costs against the appellants.