National Citizens Bank v. Babcock

Lewis, J.

Action for an accounting, to determine the amount of debt, to foreclose the mortgage given as security, to have prior liens determined, and for leave to redeem from a prior mortgage. The court found that on the twenty-sixth of January, 1905, Babcock executed and delivered to plaintiff his promissory note for $2,000, due in six months; that Bowen signed the note as surety, and in order to secure him for so doing Babcock conveyed to him by warranty deed certain real estate in Aitkin county, subject to a mortgage of $3,450 to the Hill City Land, Loan & Lumber Company; that, after deeding the land to Bowen, Babcock entered into a contract with Monks & McKinley, of date December 16, 1905, for the cutting, removal, and sale of the timber thereon; that on the twelfth of January, 1906, the Hill City Land, Loan & Lumber Company assigned its mortgage to defendant Hoerr, and at the same time Babcock assigned to him the timber contract, and also executed and delivered to Hoerr a mortgage of $200 on the same land. This arrangement was entered into between Babcock and Hoerr for the purpose of having the cedar cut and the proceeds applied on the mortgage. Hoerr then consented to the cutting and sale of the timber. It was cut and sold, the proceeds paid to Hoerr, Bowen conveyed the land to plaintiff, this action was commenced, and all the issues were found in favor of plaintiff.

*495 Hoerr alone appealed, and the only question in the case is whether there is sufficient evidence to support the following finding of fact: “That after a considerable amount of timber had been cut and removed under the contract between the defendant Babcock and said Monks & McKinley, the defendant Babcock sold to the defendant Hoerr all his interest in such contract and in the timber cut thereunder for the sum of $1,225, which was to be applied as follows: $225 on the interest then due on the mortgage purchased by said Hoerr, and $1,000 for the surrender and cancellation of the $1,000 note first due on such mortgage — but that defendant Hoerr has at all times refused to make such application or to surrender such note.” If the evidence warranted the court in finding that Hoerr agreed to settle with Babcock for $1,225, and credit the Hill City mortgage with that amount, then plaintiff was entitled to have the credit applied as of the proper date.

The evidence was conflicting. Mr. Hoerr testified that Monks & McKinley borrowed money from the bank to pay the expenses of carrying out the contract, and that all the proceeds from the timber were absorbed to pay expenses; that he received no money to apply on the mortgage. He admitted that Babcock made him a proposition to pay $1,225 on the Hill City mortgage and take all the proceeds from the timber contract; but he denied that he ever accepted it, although he took the matter under consideration. There were certain admissions, however, which indicated that he had agreed to it. That amount, $1,225, was claimed by plaintiff and by Babcock to be the amount to be credited. If Mr. Hoerr never expressly accepted the offer, he did not expressly refuse it. Babcock dropped out, and Hoerr assumed complete control, but never rendered any account, and required no accounting from Monks & McKinley. Acceptance of a proposition by conduct may be as effective as by a formal declaration.

This agreement was merely the transfer, by Babcock to Hoerr, of his interest in the contract, and was not the purchase of an interest in real estate, and void under the statute of frauds.

Affirmed.

Jaggard, J., took no part.