Vose v. Penny

Certain lands owned by the minors were deeded by their guardian to Mrs. Gillespie, sale being made through the probate court. Immediately after the delivery of the guardian's deed, Mrs. Gillespie and her husband executed separate mortgages on the land to the Alliance Trust Company, the Holmes Hibbard Mortgage Company, and the Bryan-Gow Investment Company. An action to foreclose the last-mentioned mortgage was begun in the district court June 23, 1913, the mortgagors and M.C. Ringo, who was vested with the apparent title, being made defendants. On the following day, June 24th, action was brought by the guardian in the same court to set aside his deed to Mrs. Gillespie, her husband and M.C. Ringo being joined as defendants. Neither of the mortgagees was made party to the action. These actions proceeded contemporaneously to final judgment, and plaintiff in error, Vose, purchased the land at the foreclosure sale. This action is to cancel the sheriff's deed at that sale; also to cancel the other mortgages executed by the Gillespies and to quiet title in the minors.

The guardian, in the action to cancel his deed to Mrs. Gillespie alleged the existence of the mortgages and the pending action to foreclose the mortgage to the Bryan-Gow Investment Company, and prayed an accounting to determine the amount due under the mortgages, the minors to have judgment against the Gillespies for the amount due, together with the court costs accruing in the foreclosure proceeding. Judgment was rendered in that action setting aside the guardian's deed and re-investing title in the minors. A personal judgment was also rendered against the Gillespies for the amount found to be due under the Bryan-Gow mortgage and the costs in the foreclosure proceeding, and this judgment decreed to be a specific lien on certain real estate owned by the Gillespies. Upon this judgment, the guardian caused execution and order of sale to issue, under which the property covered by this specific lien was sold and the proceeds credited on the judgment against the Gillespies.

It appears the sale made by the guardian to Mrs. Gillespie, although regular in form so far as the record of the county court disclosed, was not, in fact, made for cash as required by statute (section 6757, Rev. Laws 1910), but was in exchange of other real estate. The trial court held the sale in these circumstances was void, and that, the sale being void, the mortgages could not be valid liens. The sale was not void, and, although voidable as against parties to the transaction and persons claiming with notice, may not be set aside against persons claiming through the purchasers without notice. Berry v. Tolleson, 68 Oklahoma, 172 P. 630; Penny v. Alliance Tr. Co., 259 Fed. 558.

The question presented as to the Bryan-Gow mortgage is, whether by taking judgment for the amount of the mortgage the guardian elected his remedy and is now estopped from questioning the validity of that mortgage.

An election of remedies is the choosing between two or more different and co existing modes of procedure and relief allowed by law on the same state of facts. The basis for the application of the doctrine is in the proposition that where there is, by law or by contract, a choice between two remedies which proceed upon opposite and irreconcilable claims of right, the one taken must exclude and bar the prosecution of the other. The doctrine of election of remedies is, therefore, generally regarded as being an application of the law of estoppel, upon the theory that a party cannot, in the assertion or prosecution of his rights, occupy inconsistent positions. 9 R. C. L. 956. In First Trust Sav. Bank v. Bloodworth, 70 Oklahoma, 174 P. 545, it was said:

"When the law gives several means of redress or kinds of relief predicated on conflicting theories, the election of one and the prosecution to final judgment operates as a bar to the subsequent adoption of any other."

To the same effect is Herbert v. Wagg, 27 Okla. 674,117 P. 209; Robb v. Vos, 155 U.S. 13, 39 L.Ed. 52; Fowler v. Bowery Sav. Bank, 113 N.Y. 450, 10 Am. St. Rep. 479, 4 L. R. A. 145; Cohoon v. Fisher, 146 Ind. 583; Gaffney v. Megrath, 23 Wn. 476, 63 P. 520; Gentry v. Bearss, 88 Neb. 742, 130 N.W. 428. In the last mentioned case an Oklahoma guardian undertook to sell and transfer a mortgage owned by his ward without permission of court, and absconded with the money received therefor. The subsequent guardian prosecuted an action against the bondsmen of the absconding guardian, and later instituted an action to foreclose the mortgage. The action to foreclose was instituted in Nebraska, and the Supreme Court of that state held the action against the bondsmen was such an election of remedies as to estop the guardian from maintaining the action to foreclose the mortgage.

The action of the guardian, in the instant case, having knowledge of the existence of the mortgage, and taking judgment against the mortgagors for the amount due under the mortgage, elected his remedy, and by such election is precluded from questioning the validity of the mortgage.

The question presented concerning the mortgages to the Alliance Trust Company and the Holmes Hibbard Company is, whether these mortgagees were innocent encumbrancers for value.

It appears the Holmes Hibbard Mortgage Company was the agent in this state of the Alliance Trust Company, and appointed G.A. Ramsey district agent in Grady county. Ramsey had an understanding with Ed Shegog, under the terms of which he would share Ramsey's commission on any loan for which application came through Shegog. Shegog shared his portion of the commission with M.C. Cralle. The trial court found that neither the Alliance Trust Company, the Holmes Hibbard Mortgage Company, Ramsey, nor Shegog had knowledge of any facts sufficient to charge them with notice of any irregularity in the guardian's sale. The court also found that Cralle, while preparing the abstracts for the guardian, to be submitted to the representatives of the Alliance Company, obtained information to the effect that certain property would be taken by the guardian on the deal with the purchaser, and it is urged by defendants in error that this was sufficient to put the mortgagees upon inquiry. It does not appear that this information was conveyed to either of the mortgagees or to Ramsey, their agent. Cralle, at most, was a subagent of Shegog, who was a subagent of Ramsey, and it does not appear that Ramsey had authority from the mortgagees to appoint subagents. Cralle not being an agent of either mortgagee, and not having conveyed his information to Ramsey, the mortgagees must be held to be innocent encumbrancers. In Gaar, Scott Co. v. Rogers,46 Okla. 67, 148 P. 161, it was said:

"The general rule of law is that an agent has no implied authority to delegate his powers to a subagent; and persons employed as clerks or subagents do not become the agent of the principal, without the principal's consent."

In People's Bank v. Frick, 13 Okla. 179, 73 P. 949, it was said:

"An agent or factor has no implied authority to appoint subagents, or to delegate his powers; and persons employed by him in handling his principal's property do not become the agent of the principal, without the principal's consent."

To the same effect is Hoover v. Wise, 91 U.S. 308, 23 L.Ed. 392; Mechem on Agency, secs. 184 to 197.

The mortgages in question, in view of the circumstances of this case, must be held to be valid liens. It appears that Vose purchased at the foreclosure sale under a contract entered into with Mrs. Penny for use of herself and the minor children. It is unnecessary to define the rights of Vose under this sale, or of the minors under that contract. That question is not properly before us.

The judgment of the trial court is reversed, with directions to grant a new trial and proceed in accordance with the views herein expressed.

JOHNSON and McNEILL, JJ., dissent. BAILEY, J., being disqualified, did not participate. The other Justices concur.

Dissenting Opinion Filed April 27, 1920.