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22 ND 283

Ueland v. More Bros.

North Dakota Supreme Court

Decided October 26, 1911

North Dakota Supreme Court · decided 1911-10-26

<p>Mortgage — subsequent deed in payment for machinery purchased conditionally — rescission of contract — effect of delivery of deed to convey title under statute.</p> <p>1. Plaintiff claims right to sheriff’s deed on foreclosure after expiration of period of redemption, and denies the validity of More Brothers’ redemption under a subsequent mortgage. The owner gave his first mortgage, the one foreclosed upon by plaintiff. Thereafter he deeded the land as a part payment for threshing machinery purchased of his grantees, with the understanding that the same should not be recorded and the purchase of the machinery be closed. until the machinery should be tested and be approved by him. The machinery was delivered, proving worthless, and he rescinded the contract and delivered back the machinery, which was accepted by his grantors. More Brothers had full knowledge of the transaction, but, prior to said rescission, procured delivery to them by the grantors of the unrecorded deed, together with a mortgage given by said grantees to More Brothers, securing a past indebtedness, and thereupon recorded both deed and mortgage. Thereafter the grantor obtained judgment against his grantees for reconveyance and cancelation, and the land was accordingly reeonveyed. But More Brothers were not made parties to, and did not appear in, said action. Thereafter foreclosure of the first mortgage was had by this plaintiff, and More Brothers redeemed under said second mortgage. Plaintiff brings this action to cancel said voidable mortgages to More Brothers and compel sheriff to issue deed on foreclosure to plaintiff, instead of to More Brothers, to whom sheriff has issued certificate of redemption. It is held-. Under § 4954, Rev. Codes 1905, following holding in Sargent v. Cooley, 12 N. D. 1, 94 N. W. 576, the manual delivery of the deed to the owners’ grantees being admitted, the intent of the parties that a condition precedent to its operation shall exist is abrogated by the statute, and such a delivery is absolute, and conveys title to the grantees, to whom the same was by the grantor delivered.</p> <p>Note. — The holding in the case of Ueland v. More Brothers is in harmony with •the well-settled rule of law, as shown by the authorities collated in a note in 16 L.R.A. (N.S.) 941, that, where a grantor delivers his deed to the grantee, without, ■any express reservation of the right to recall it, and with intent that in a certain ■contingency it shall be effective without any further act on the part of the grantor, such delivery is effectual to pass the title immediately. There are two different grounds upon which the courts arrive at such conclusion: first, the well-known rule of evidence that parol testimony is inadmissible to vary the terms of a written instrument; and, second, that such delivery is an attempt to deliver the deed in •escrow to the grantee, which cannot be done, since delivery to a stranger is essential -to an escrow.</p> <p>The general question of what is a delivery of a deed which will convey title is the subject of a note in 53 Am. St. Rep. 537.</p> <p>Judgment — conclusiveness against persons not parties.</p> <p>2. Legal title existing in such grantees, their mortgage to More Brothers is. valid until set aside, and the judgment obtained to which said mortgagees were not parties in no wise affects their right of redemption under their mortgage, the judgment not operating against them in personam nor binding them as a. judgment in rem;' the judgment being subsequent to and no part of More Brothers’ chain of title.</p> <p>Mortgage — statutory right to redeem; right to sheriff’s deed.</p> <p>3. More Brothers, under their statutory right to redeem, are entitled to sheriff’s deed on their redemption made.</p>

[Reversed and rendered · Decided 1911-10-26

¶1On Petition for Rehearing.

Goss, J.

¶2Respondent petitions for a rehearing, claiming the evidence to be sufficient to show that the delivery to the grantees, Miller & Hasz, by the grantor, M. A. Ueland, was under the agreement that said grantees should immediately deposit the deed in escrow in the bank at Kulm, it to remain there until the grantor should be satisfied with the machinery. We have re-examined carefully all the testimony. The trial court failed to find any delivery in escrow whatever. But, conceding respondent’s contention as sufficiently supported by the evidence, it conclusively appears therefrom that, after the expiration of the six days mentioned in the contract of purchase of the machinery as the period allowed for testing the same, that, if the grantees delivered the deed to the bank in escrow at all, they, after said period, procured its delivery by the bank to them, fulfilling any escrow agreement, after which they recorded the deed under the supposition that Ueland was satisfied with the deal. Ueland had kept the machine then a month. In this connection Ueland testified that he did not even take the trouble to ascertain whether the deed had ever been delivered to the bank during the period from August 20, the date of sale, to the return of the machinery, October 28, and pending which time on September 22, a month after sale, delivery and recording of the deed was had, conceding that the same was deposited in the bank.

¶3Under the evidence, we deem it immaterial whether the delivery was made without any escrow agreement whatever, or whether, as found in *290the main opinion which we deem supported by the evidence, an attempted delivery in escrow was had by the grantor to the grantees, or whether the contention urged on rehearing, to wit, a delivery in which the grantees were to act as agents merely in the transmission of the deed to the bank. We deem it immaterial whichever of tbe three positions be chosen by respondent, as the result must inevitably be the same — that of a final delivery to the grantee with voidable title thereby vesting in them, but sufficient to sustain a voidable mortgage now outstanding and unassailed, and under which the redemption sought by appellants can be-made. And what we have said in this opinion assumes the right of L.. A. Ueland, certificate holder on foreclosure, to question the record title of the appellants under which they seek to redeem, as to which we do not think it necessary to determine in this action.

¶4After resolving all doubt in respondent’s favor in the above matters, be bas shown no defense against tbe right of appellants to redeem.

¶5The petition for rehearing is therefore denied.

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