Von Hemert v. Taylor

START, C. J.

This action was brought by the plaintiff, as assignee, to foreclose a real-estate mortgage, executed on March 21, 1890, by the defendants, Oscar L. and Nora W. Taylor, who are husband and wife, to the St. Paul Trust Company, tó secure the payment of $40,000. The defendant Nora W. alone answered. Her defense was that she was the equitable owner of an undivided one-third of the mortgaged premises, and executed the mortgage for the sole purpose of securing a loan to her husband individually; that the plaintiff knew that she was the owner of such interest in the premises, and that she executed the mortgage as surety; and that so knowing, the plaintiff, for a valuable consideration, extended the time of the payment of the mortgage and note secured thereby without her knowledge or consent. The trial court found for plaintiff on all the issues, and ordered judgment for the foreclosure of the mortgage. The defendant appealed from an order denying her motion for a new trial.

The assignments of error raise the question as to the sufficiency of the evidence to sustain the findings of fact. The mortgaged premises, on January 25, 1890, were conveyed to the defendant Oscar L. Taylor by warranty deed by the then owner thereof, and the deed was duly recorded. At the time the mortgage in question was delivered to the mortgagee, Oscar L. Taylor was of record the sole owner in fee of the premises. The only claim of the wife to be the equitable owner of an undivided one-third of the premises is based upon the fact that she furnished a part of the purchase money of the premises. The firm of Smith & Taylor, of which her husband was a member, as her agents, had in their hands certain money of the defendant Nora W. for the purpose of purchasing the property in question, and the money was paid as a part of the purchase price, and the deed taken in the name of her husband, Oscar L. Taylor. The evidence is silent as to whether the deed was so taken with or without her consent, and in view of the fact that the relation of husband and wife existed between her and the grantee in the deed, and the further fact that neither she nor her husband testified on the .trial that the deed was not so taken with her consent, it is doubtful if the evidence required or justified a finding that she was the equitable owner of one-third of the premises by reason of a constructive trust in her favor. Certainly, if she consented to the transaction, no trust would arise in her favor. Petzold v. Petzold, 53 Minn. 39, 54 N. W. 933.

Conceding, however, without deciding, that the wife was the equitable owner of an undivided interest in the premises, and that the plaintiff extended the time of payment of the note without her consent, still she would not be entitled to have her interest in the mortgaged premises discharged of the lien of the mortgage, unless the plaintiff had notice, at the time the agreement to extend was made, that she had such interest in the land, and that she was, to the extent of her interest, surety for her husband’s debt. Agnew v. Merritt, 10 Minn. 242 (308); Benedict v. Olson, 37 Minn. 431, 35 N. W. 10.

The only evidence from which it is claimed that the plaintiff had such notice, or ought to have known that she was the owner of an undivided one-third part of the land, is that Oscar L. Taylor and Nora W. Taylor, his wife, covenanted, in and by the mortgage, that they were lawfully seised of the premises, and had good right to convey.

The written application for the loan, signed by the husband, contained this representation:

“The title to the premises, in fee simple, * * is in Oscar L. Taylor, whose wife’s name is Nora W. Taylor.”

The covenant in the mortgage was not sufficient to charge the mortgagee or its assignee with notice of the wife’s rights in the premises. The representation of the husband that he was the sole owner in fee of the mortgaged premises was corroborated by the record, for it showed that he was in fact such owner. If some person other than his wife had united with Taylor in making the mortgage and joined in the covenants thereof, we should have a different case to deal with, because in such case there could be no reason for such third party so uniting with Taylor, unless he had some interest in the premises. But the wife, by reason of her inchoate interest in the land of her husband, is a necessary party to any deed or mortgage thereof, if a marketable title is to be acquired, and it is not unusual to require her to join in the covenant of seisin therein in order to create an estoppel against her for the better assurance of the title. See Sandwich Mnfg. Co. v. Zellmer, 48 Minn. 408, 51 N. W. 379. The fact that the defendant Nora W. Taylor was the wife of the mortgagor is, of itself, a sufficient reason why she should have executed the mortgage and joined with her husband in the covenant of seisin. There was nothing in the mortgage, taken in connection with the record title, which would lead a prudent man to infer that the record did not truly disclose the title to the premises.

The evidence fully justified the finding of the trial court on this question of notice.

Order affirmed.