Burke v. Baldwin

Amendment of Pleadings after Trial. Under the provisions of 1878 Q-. S. eh. 6.6, § 124, a trial court, in the exorcise of its proper discretion, may allow pleadings to he amended so as to raise new issues after the cause has been disposed of in this court on findings of fact and conclusions of law, and, as a necessary result of its power to permit such amendments, may grant a new trial. The court should act with great caution, however, on such applications. Judicial Discretion Rightly Exercised. Held, in the case at bar, that the court below acted within its discretionary powers when it granted defendants’ motion for leave to amend their answer and their motion for a new trial of the new issues. (Opinion published 56 N. W. Rep. 173.)

Appeal by plaintiffs, Frank Burke, Jr., Rufus P. Edson, and Wallace Warner, from an order of the District Court of St. Louis County, Chas. L. Lewis, J., made March 23, 1893, allowing defendants to amend their answer and granting a new trial. Sextus Hoffman owned the northeast quarter of section seventeen (17) and the southwest quarter of section nine, (9,) T. 50, R. 14, lying in the northwest part of the city of Duluth, three miles back from the lake. On June 20, 1872, he mortgaged this three hundred and twenty acres of land to Urs Tischer to secure the payment of $2,000 and interest. Tischer assigned the debt and mortgage September 6, 1873, to the Duluth Savings Bank. The instrument of assignment was absolute and unconditional in form, and was recorded September 16, 1873, in the Begistry of Deeds of St. Louis County. It was in fact made to the bank to secure the payment by Tischer to it of $700 borrowed that day by him of the bank. He paid this debt August 4, 1874, and received from the bank a reassignment of the mortgage, but this reassignment was not recorded until December 7, 1874. Tischer commenced proceedings October 6, 1874, to foreclose the mortgage under the power of sale therein. The notice of sale did not mention or refer to the assignment or reassignment. The foreclosure sale was made November 23, 1874, fourteen days before the recording of the reassignment. Henry J. Bierman bid and became the purchaser of the land at the sale and received the sheriff’s certificate. It was not redeemed, and he afterwards conveyed seventy (70) acres of it, lying in section seventeen, to the defendants, Emmit V. Baldwin, Martha A. Kingman, Martin Hollenbeck and Michael Eichen. The remaining ninety (90) acres in that section he conveyed to Hattie W. Backus and Louisa B. Smith. Sextus Hoffman died intestate in 1874, and his heirs conveyed to the plaintiffs all their right and title to both quarter sections. This action was commenced December 3, 1890, to establish plaintiff’s title to the seventy acres, and remove the cloud created by the foreclosure proceedings. The defendants answered, stating the facts regarding the assignment and reassignment of the mortgage, and claiming its foreclosure to be valid. Those issues were tried and defendants had judgment April 26, 1892. But on. appeal to this court, that judgment was reversed. This court held the foreclosure invalid. Burke v. Baldwin, 51 Minn. 181. After the action was remitted to the District Court the defendants there moved, upon affidavits and the record, for leave to file and serve an amended answer and for a new trial of the action. The amendment they asked leave to make was, to strike out the admission that the land was vacant and unoccupied, and insert in its stead that Bierman and his grantees had been in the actual possession of the land ever since the supposed right of redemption expired in November, 1875. That the foreclosure, being invalid, the proceedings constituted a valid assignment of the mortgage to Bierman, and that he and his grantees took possession of the land with the consent of Hoffman’s heirs and are mortgagees in possession, and that the time in which those heirs or their grantees could redeem, had expired. The affidavits* stated among other things that for many years after Bierman got his supposed title by the foreclosure sale, the lands around this half section were mostly unoccupied and heavily timbered, with few roads; that Bierman was unmarried, had no family or relatives in the vicinity, and the facts as to his possession were difficult to prove. That in 1876 he built a log house on the land in section seventeen, and lived in it most of the time for a number of years thereafter; that he cleared and cultivated a small part of the land, and from time to time sold wood from it; that some years later Bierman sold the land, and went to Pennsylvania and died. The court granted the motion, and from that order this appeal is taken. The remaining lands covered by this mortgage have been the subject of similar litigation. The grantees of the ninety (90) acres in section seventeen, (17,) Hattie W. Backus and Louisa B. Smith, commenced an action October 29, 1890, to determine the adverse claim of these plaintiffs to their land, and had judgment which was reversed in this court. Backus v. Burke, 48 Minn. 260. After that action was remitted to the District Court, the plaintiffs therein moved to amend their complaint, but were denied, and they appealed to this court, where the order was reversed. Backus v. Burke, 52 Minn. 109. Meantime Burke, Edson and Warner commenced an action against Henry M. Backus et al., to establish their title to the north half of said southwest quarter of section nine, (9,) and to remove the cloud created by the certificate of sale on the foreclosure. They had judgment in that case, and the defendants therein appealed, but the judgment was affirmed. Burke v. Backus, 51 Minn. 174. The defense set up in the amended answer is an entirely new one, and cannot be deemed in any sense an amendment of the former pleading. It proceeds by confessing the facts stated in tbe complaint, and avoiding their effect by setting up a new title. It would indeed be a strange procedure if a party can litigate his case to a final judgment on one theory, and when the court of last resort reverses such judgment, can begin anew on another and wholly different theory. Stark v. Sta7-r, 94 U. S. 477; Bullís v. Clisadle, 36 Minn. 164; Landry v. Bangnon, 17 La. 82; Parsons v. Platt, 37 Conn. 563; Nelson v. Johnson, 18 Ind. 329; Brickley v. Walker, 68 Wis. 563; Grace v. McArthur, 76 Wis. 641. The defense now sought to be interposed by the defendants is, that they held the land in controversy as mortgagees in possession. All of the parties who made the affidavits in support of defendant’s motion, are residents of the County of St. Louis, Minnesota; and no facts are set forth in any of the affidavits to explain why their testimony could not be had on the former trial with the exercise of even the smallest amount of diligence. Knoblauch v. Kronschnabel, 18 Minn. 300, (Gil. 272;) Baze v. Arper, 6 Minn. 220, (Gil. 142;) Broat v. Moor, 44 Minn. 468; Hines v. Driver, 100 Ind. 315; Allen v. Bond, 112 Ind. 523. lit is well settled that the right to redeem and the right to foreclose are reciprocal and commensurable, and also that where the holder of a mortgage has gone into possession as mortgagee, and so remains until the right of action to redeem is barred, he becomes vested with the absolute legal title of the mortgaged premises. But he must remain in possession. Rogers v. Benton, 39 Minn. 39; Knoiviton v. Walker,IQ Wis. 264; Waldo v. Rice, 14 Wis. 286. To constitute a mortgagee in possession he must be in possession by reason of the agreement or assent of the mortgagor or his assigns. He must have possession under the mortgage and because of it. Rogers v. Benton, 39 Minn. 39; Jellison v. Halloran, 44 Minn. 199; Bitzer v. Campbell, 47 Minn. 221. At the time of the attempted foreclosure the mortgagor was dead, leaving a widow and four children surviving him. Only one of these children was of age; the other three, ranging in age from four to fourteen, could not consent. In the exercise of a sound discretion, the court may. even after judgment, allow the answer to be so amended as to raise a new issue with a view to a new trial; and this, even though the facts set up in the amendment were known to the defendant and his attorney at the time of trial. 1878 G. S. ch. 66, § 124; Kennedy v. Waugh, 23 Wis. 468; Wicke v. Lake, 21 Wis. 411. The question whether such an issue could be raised by amendment after trial was not involved in any of the cases from Connecticut, Indiana, or Wisconsin, cited in appellants’ brief. Under the suggestion made by the court in National Invest. Go. v. National Sav. Ass’n, 51 Minn. 198, it would have been no abuse of discretion on the part of the trial court to have ordered a new trial instead of entering judgment upon the former findings of fact, even in the absence of the motion to amend, and the affidavits setting forth the newly-discovered evidence. The court exercised a sound discretion in granting a new trial upon the showing made by the affidavits. The claim that the defendants’ grantors had acquired title to the land as mortgagees in possession rests upon the law of that subject as elaborated in the decisions of this court. Holton v. Meighen, 15 Minn. 69 (Gil. 50;) King v. Meighen, 20 Minn. 264, (Gil. 237;) Parsons v. Noggle, 23 Minn. 328; Jettison v. Halloran, 44 Minn. 199; Rogers v. Benton, 39 Minn. 39. It is not necessary that possession by the mortgagee should be continuous. Once initiated it subsists for the purpose of this rule until it is displaced by the actual adverse possession of another. Rogers v. Benton, 39 Minn. 45. And a foreclosure sale, though abortive as such, will operate to assign the mortgage to the purchaser. Jettison v. Halloran, 44 Minn. 199; Russell v. H. G. Ake-ley Lumber Co., 45 Minn. 376. The time to foreclose the mortgage in question expired in June, 1888. This action was not commenced until December, 1890. The possession of Bierman would, upon acknowledged principles of law, extend to the entire tract in the absence of proof that he was claiming less. There is no doubt that Bierman’s claim of possession must, in the absence of proof, be regárded as co-extensive with the boundaries of his tract as described in the mortgage under which he claimed.