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On Petition for Rehearing. 5. APPEAL AND ERROR (§ 1009*)-TRIAL DE Novo-EQUITY.

In an appeal taken under section 7229, Rev. Codes 1905, and in which a trial de novo is asked, the Supreme Court is not concluded by the findings of the trial court either as to the law or as to the facts of the case.

[Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. 88 3970-3978; Dec. Dig. 8

1009.*]

The answer denies all duress and coercion, and alleges that the mortgage was given to secure the sum of $1,000 and interest. The trial court found that the charges of coercion and duress set forth in the complaint were true, and that "on the 21st day of December, 1908, one P. L. Higgins, who was at said time the agent of the above-named defendant, came to the place where the plaintiff was then liv

6. CANCELLATION OF INSTRUMENTS (8 45*)-ing with her youngest son, with whom she BURDEN OF PROOF-FAILURE OF CONSIDERA

TION.

The burden of proof in an action to set aside for an alleged failure of consideration a written instrument which is valid upon its face is upon the plaintiff.

[Ed. Note.-For other cases, see Cancellation of Instruments, Cent. Dig. §§ 100, 101; Dec. Dig. § 45.*]

Appeal from District Court, Mountrail County; Fisk, Judge.

had always lived, the said plaintiff being alone in the house at said time, the son being away; and at that said time the said P. L. Higgins requested the plaintiff to give a mortgage on her land to the said Dale, and the plaintiff refused to do so, and thereupon the said Higgins told her that unless she gave the mortgage Dale, the defendant, would send her son to the penitentiary, and the said Higgins threatened to charge her sou with a crime if she did not sign the mort

said notes and mortgage by reason of, and only by reason of, the threats which the said Higgins made, and to save her son from going to state prison, and that only for such threats she signed said mortgage and would not have signed same but for such threats, and that said mortgage was procured through duress." His conclusions of law were that the plaintiff was entitled to judgment, declaring the said mortgage and notes null and void and that the said mortgage be declared canceled. From this judgment an appeal was taken.

Noble, Blood & Adamson, of Minot, for appellant. E. R. Sinkler, of Minot, for respondent.

Action by Anna J. Englert against Fred V. Dale. From judgment for plaintiff, defend-gage, and that the said plaintiff executed the ant appeals. Reversed, and rehearing denied. This case comes before us for a trial de novo under the Newman Act. The complaint, dated February 24, 1911, alleges that on the 21st day of December, 1908, through fraud and coercion, duress, and undue influence, the plaintiff executed to the defendant a mortgage on a quarter section of land; that said mortgage was and is entirely without consideration and foundation; that the plaintiff is an aged woman 76 years old (the proof showed 67), and of sickly, nervous disposition; that on the 21st day of December, 1908, one P. L. Higgins, an agent of the defendant, came to the plaintiff's land, having in his possession certain notes and a mortgage, and that he then and there requested the plaintiff to sign said notes and mortgage; that she refused to do so, and that BRUCE, J. (after stating the facts as thereafter and thereupon the said Higgins above). [2] There is much in the evidence told plaintiff that her son, one C. L. Englert, in this case to support the claim of the had committed a criminal offense and had plaintiff. We are satisfied, however, that sold mortgaged property, and that, unless there is no such clear and convincing proof she signed said notes and mortgage, he would of fraud or duress as would justify us in setget out a warrant for the arrest of the said ting aside the mortgage. There is evidence C. L. Englert and have him sent to the to the effect that the plaintiff was 67 years penitentiary, and that said P. L. Higgins old; that she had five living children; that then and there threatened to cause the arrest Cassius Englert was the youngest son. She of her said son and send him to the peni- testified that she had not seen him since the tentiary, and the said P. L. Higgins threat- 5th day of August, 1910, when he left the counened to accuse the said son of a crime and try charged with having sold a mortgaged felony if this plaintiff did not sign the notes threshing machine; that they had lived toand mortgage, and that by reason of the gether up to that date for a number of years threat made by P. L. Higgins this plaintiff upon his farm; that on the 21st day of Decemwas put in great fear and was coerced and ber, 1908, between 1 and 2 o'clock p. m. one P. by duress compelled to sign said notes and L. Higgins drove to the farm with a liveryman mortgage, and the signature of this plaintiff by the name of Johnson; that he knocked to said notes and mortgage was extorted at the door and asked where the boy, Casfrom her by means of such threats against sius, was; that she told him that he was at her son; that she would not have signed said Columbus after coal; that Higgins next said notes except for the fear induced by such that, "Cad (Cassius), he wanted-he had threats. Then follows a prayer for a can- some papers that he wanted me to make outcellation of said notes and mortgage, and said he had committed a criminal offense and that the same be declared null and void. he would send him to state prison-Mr. For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes

in her statement that he was absent for quite a little while at the barn, taking care of his horses. He also testified that when he and Higgins drove away from the house Higgins told him to "keep still about what was going on." The witness Higgins denied having used any duress or coercion. He testified that an arrangement had been made with the son for a release of the mortgage on the government homestead and the taking of a mortgage on the mother's premises, and that the mortgage was executed by the mother in furtherance of such agreement. He does not deny, however, that he told Johnson to keep still about what was going on. The defendant, Dale, also testifies to an agreement having been made with the son for the transfer of the mortgages. There is also testimony that the son after the execution of the mortgage in question sold an engine, on which the defendant had a chattel mortgage, and left the country. There is evidence to show that, before he left, he went to the office of Mr. Sinkler, attorney for the plaintiff, to make arrangements for bringing the action at bar, and that the said Sinkler never saw the plaintiff until the morning of the trial. Sinkler testifies that in the month of February, 1910, Cassius Englert told him about the matter, and that later one Wallie George came to his office, and said he was acting for Mr. Dale in the matter of the mortgage, and also told him that Cassius Englert had been guilty of selling mortgaged property, and that, if he did not fix the matter up, he would send him to the penitentiary, that the said Sinkler thought the mortgaged property was a team of horses, and that they did not say anything to him about an engine. It is also shown that about this time the said Sinkler communicated with the defendant Dale about the mortgage, and that on the 3d day of January, 1910, over a year after the giving of the mortgage, and more than a month after Dale had been notified that proceedings were going to be instituted against him, the release on the mortgage on the homestead of Cassius Englert was recorded.

Dale could send him to state prison, and He, however, fully corroborated the plaintiff would if I didn't fix them up-Mr. Dale thought if he came to me I would fix it up;" that she believed what he said; that she asked Higgins to wait until her boy came home, but he said he couldn't wait; that she was pretty badly scared and thought that perhaps he would send her boy to the penitentiary; that her health was bad at the time and she was excited; that she signed the notes and mortgage to save her son from going to state prison; that she did not owe Mr. Dale anything; that she had no reason for signing the notes and mortgage except to save her boy; that she thought Higgins drew up the mortgage while he was at her house, that he was writing for quite a while, he said he was a notary public, and had authority to handle these papers; that after she signed the mortgage she asked Higgins to wait until the boy would come; that John Johnson, the liveryman, was out in the barn at the time of the talk about putting her son into the penitentiary. She testified that Higgins told her that her son "had mortgaged property, and did not tell Mr. Dale, and had taken the bankrupt law," and that she believed if she did not sign the mortgage that they would put her son in the penitentiary; that Higgins did not tell her that her son had sold mortgaged property, he said that he had mortgaged property; that she did not have any knowledge of any agreement between her son with Mr. Dale for the giving of this mortgage, and that Mr. Higgins did not tell her about any such agreement; that Mr. Higgins did not tell her that Mr. Dale wanted her to give this mortgage so that he could release the preliminary mortgage on Cad's homestead; that she did not complain to Mr. Dale until two years after (last fall); that she had written to him in the May before, and asked him if he had canceled the mortgage or released the mortgage; that she did not see Mr. Dale before because she supposed that as long as Mr. Dale held that (the mortgage) he would not make him (Cassius) any trouble; that Higgins talked with her and the threats were made about half an hour before Johnson came in, and that he did not The defendant's contention is that there hear them; that at the actual time she signed is no proof of duress in the case. He also the papers there was not anything said about contends that the evidence shows laches on putting her boy in the penitentiary, nor was the part of the plaintiff; the action not beanything said at the time that Johnson wit-ing brought until over two years after the nessed them; that her son at this time, or giving of the mortgage. He also contends prior to this time, started to go through that the evidence shows that the sons were bankruptcy, but she did not know whether the parties chiefly instrumental in starting he went through. She said "that Higgins the suit, and argues that the proof shows told her that her son had mortgaged property, and had taken the benefit of the bankrupt law, and did not tell Mr. Dale, and Mr. Dale could send him to state prison-that is just exactly what he said to me." The witness Johnson, the liveryman, testified that he witnessed the mortgage, and that while he was in the house nothing was said about

conclusively a conspiracy on the part of the sons not merely to have the mortgage on Cassius' farm released, but subsequently to have that on the farm of his mother declared void. He contends that this action was really brought by the sons, and not by the mother. Upon a careful perusal of the record we see much in this contention.

no clear and convincing proof of fraud or is flatly contradicted by him, and the fact duress is shown such as must be furnished of the visit of Higgins and his driver, Johnbefore we are justified in setting aside an son, in the absence of her sons. It is to be instrument of the nature of the one before | remembered, however, that these parties us. In the place, indeed, of being convinced stopped at the farms of both sons on their that a fraud was committed upon the plain- way out and did not find them in, and the tiff, we read in the record evidence of a inference, if any, is that they desired that fraudulent attempt on the part of the plain- the sons should know of their intended visit tiff and her two sons to defraud the defend- to their mother. There is also, of course, ant. Plaintiff must have known that the evidence of fraud in Higgins' admonition prior mortgage on her son's homestead was to Johnson to keep quiet about the matter, to be and had been released. She testifies but this admonition can well be accounted that she was induced to sign the mortgage for by the fact that Cad was in financial upon her own farm because of some threat straits, and the natural desire of Dale to that her son Cad would be prosecuted by keep his negotiations with him hidden from Dale for mortgaging property and then go- other creditors. We, too, do not approve of ing into bankruptcy, when the evidence the practice of an agent acting as a notary shows that Dale was a witness for her son public in mortgages and deeds which are in those very bankruptcy proceedings. She taken on behalf of his principal and such admitted that she lived with her son on his is condemned in many jurisdictions. place at the time, and had never been ab- practice, however, seems to be common in sent from him, and had lived with him there North Dakota, and seems to be sanctioned for two years after signing the mortgage by the weight of authority (1 Cyc. 555), and and until he left the country for the reason in view of the practice and the sanction of as given by his brother that "he was getting the weight of authority, we can hardly at himself into trouble by staying." Yet at this time set aside a conveyance for this no time before the bringing of the suit did reason. We do not, on a perusal of the recshe take any steps to cancel the mortgage, ord, see that clear and convincing evidence and never said anything about it until May of fraud which will justify us in setting 27, 1910 when she merely wrote Mr. Dale aside the mortgage, especially as to do so to ask if the "mortgage had been released," would be to deprive the defendant of his or that "she wanted to see him (Dale) about security for his debt and leave the two farms the mortgage." It is inconceivable that dur- to be inherited by the two sons free from ing these two years she should not have all debts and incumbrances, though the debt spoken to her sons of the visit to her and her from Cad is unpaid and he has left the counexecution of the papers, and that at least try as a practical fugitive from justice. one of her sons should not have acquainted her with the facts.

[3] There are only two conclusions to be had, and these are either that she executed the mortgage voluntarily, or that the criminal offense that she referred to was not a bogus one, but a real one, which the evidence shows that her son may in fact have committed before the visit, that of mortgaging her horses for his own debt and in his own name. In the latter case her mortgage would not have been deemed to have been executed under duress. Gregor v. Hyde, 62 Fed. 107, 10 C. C. A. 290; Compton v. Bunker Hill Bank, 96 Ill. 301, 36 Am. Rep. 147; Hilborn v. Bucknan, 78 Me. 482, 7 Atl. 272, 57 Am. Rep. 816; Landa v. Obert, 45 Tex. 539; Sanford v. Sornborger, 26 Neb. 295, 41 N. W. 1102. Added to these are the facts that the action was started by the sons and all the negotiations with the attorney were had by them, and even then not until after Cad had left the country, and just after the recording of the release of the mortgage on his own land. It is to be remembered that the plaintiff in her testimony was incoherent as to what crime Higgins had charged her son with having committed. The only suggestion of fraud, indeed, that there is to be found is in her report of a conversation with Higgins, which

The

[4] But counsel for respondent contends that there was a lack of consideration for the mortgage, or at any rate a failure of consideration. He contends that the release of a mortgage given on an unproved homestead is no consideration. He also contends that the respondent was simply a surety in the transaction and that such contract required a consideration, and that the promise to release was not complied with, and that, therefore, there was a failure of consideration which avoided the mortgage. We think, however, that there is nothing in this contention. The evidence shows that a release of the mortgage was executed by Dale on April 22, 1909, and nearly two years before the bringing of the action at bar. It also shows that immediately after the execution of the mortgage by the mother Dale told the son, Cad, that he could have the release whenever he desired it. It is true that the release was not recorded until January 19, 1910, and probably after Dale had some knowledge that proceedings might be instituted against him. There was no obligation, however, on the part of Dale, the mortgagee, to record the release, provided that it was executed and acknowledged in proper form, which it was. See section 6173, R. C. There was no failure of consideration and the delay in recording is evidence against rather than

in favor of the respondent. The inference, the promise to release a mortgage upon the if any, is that Cassius Englert kept the release until the last moment so that his creditors would know nothing of its existence, and did not record the same until he was about to start proceedings against Dale for the cancellation of the second mortgage, and in which case he would naturally desire the record to show a release of the prior one. Counsel, too, is in error in thinking that a mortgage upon a government homestead on which patent has not issued is a nullity. Section 2296 of the United States Revised Statutes (U. S. Comp. St. 1901, p. 1398), which provides that "no lands acquired under the provisions of the Homestead Act shall in any event become liable to the satisfaction of any debt contracted prior to the issuing of the patent therefor," has repeatedly been held as intended as a prohibition on the involuntary appropriation of the homesteader's land by way of execution or attachment before final proof, but not to contemplate a restriction upon his power to voluntarily mortgage his interest therein. Weber v. Laidler, 26 Wash. 144, 66 Pac. 400, 90 Am. St. Rep. 726; Dickerson v. Bridges, 147 Mo. 235, 48 S. W. 825; Stark v. Duvall, 7 Okl. 213, 54 Pac. 453; Adams v. McClintock, 21 N. D. 483, 131 N. W. 394. .

The judgment of the district court is reversed, and judgment ordered in favor of the defendant and appellant, and dismissing the action of plaintiff and respondent.

On Petition for Rehearing.

[5] Counsel for respondent argues that the finding of the trial court must prevail in this case. He states that: "In reviewing findings of fact made by a trial court, it must be presumed on appeal that the decision of such a court is sustained by the weight of evidence; and, unless it appears that the testimony clearly preponderates against such decision, the presumption that the findings are right must prevail." He is clearly in error, however, in so far as the present action is concerned. This is an equity case, and has come before this court for a trial de novo under the provisions of the so-called Newman Act (section 7229, R. C. 1905). The rule which prevails in cases which are triable by a jury does not prevail in equity cases which are tried and appealed under the provisions of section 7229. A trial de novo, in short, is a trial de novo.

Counsel also confuses a lack of consideration with a failure of consideration. He alleges in his complaint that "the plaintiff further states that the said mortgage was and is entirely without consideration," and seeks to sustain this proposition by proof that

son's unpatented government homestead was the consideration for the subsequent mortgage, and that this promise was not complied with prior to the repudiation of the mortgage by the plaintiff. This, to our mind, would be a failure, and not a lack, of consideration. This was the main reason for the statement made by the court that a mortgage made upon a government homestead before final proof was not a nullity; because upon the theory of a nullity, and this theory alone, could there be any contention that there was no consideration for the execution of the mortgage by the mother. Counsel says that he never put forth such a contention, and "that it is an imputation of ignorance for this court to say that he so contended." He certainly, however, stated in his brief that "a mortgage upon government land by one in possession of same is void if the homesteader never perfects his title to the land under the homestead laws. The mortgage does not attach until the patent issues," and upon this statement he based his claim that "the agreement to release or the releasing of the preliminary mortgage on government land" furnished no consideration for the mother's mortgage. So too, practically all, if not all, of the cases which he cites are cases in which the contract or mortgage for which the second obligation was sought to be substituted or to operate as a security, were cases in which the original agreement was itself void.

[6] Counsel also claims that there is no proof in the record that the release of the Cassius Englert mortgage was delivered before the defendant, Dale, had notice that Mrs. Englert intended to repudiate the subsequent mortgage upon her property. He, however, has entirely failed to realize on whom the burden of proof rests in this case. It is for the plaintiff to show that the release was not delivered, and not for the defendant to show that it was. There is certainly nothing in the evidence to show that it was not delivered prior to the notice of the alleged repudiation of the subsequent mortgage, while the date of the release is prior to that time. It is to be remembered that this is an action to set aside a written instrument, which upon its face is valid and has all the outward indications of an instrument that was solemnly executed. must be plain that the burden of proof to show either an absence or a failure of consideration is upon the plaintiff. This, indeed, is not only the rule of the common law, but the rule which the statute prescribes. See sections 5325 and 5326, R. C. 1905.

The petition for a rehearing is denied.

It

SOMMER v. MILLER. (Supreme Court of South Dakota. June 24, 1913.)

1. ALTERATION OF INSTRUMENTS (§ 16*) LEASE-MATERIAL ALTERATION BY LANDLORD-RIGHTS OF TENANT.

An alteration by a landlord of a lease of a farm for two years for a part of the crops by the insertion of a provision that in case the landlord sells the land the lease shall terminate is a material alteration, and is not enforceable against the tenant whose legal rights are unaffected thereby, and the tenant voluntarily surrendering the premises to a purchaser during the term does not thereby acquire any rights against the landlord not participating in the purchaser's act in depriving the tenant of possession.

[Ed. Note.-For other cases, see Alteration of Instruments, Cent. Dig. §§ 114-121; Dec. Dig. § 16.*]

2. VENDOR AND PURCHASER (§ 232*) - BONA FIDE PURCHASER-NOTICE.

A purchaser of premises in the open and notorious possession of a tenant is chargeable with full knowledge of the tenant's actual legal rights under his lease.

[Ed. Note.-For other cases, see Vendor and Purchaser, Cent. Dig. §§ 540-545, 548-562; Dec. Dig. & 232.*]

Appeal from Circuit Court, Lyman County; Wm. Williamson, Judge.

Action by Frank Sommer against R. M. Miller. From an order sustaining a demurrer to a counterclaim, defendant appeals. Affirmed.

Bartine & Bartine, of Oacoma, for appellant. Brown & Brown, of Chamberlain, for respondent.

1911, and that he did, in violation of the rights of this defendant, take possession and did use the same, and did refuse to allow this defendant the use and occupancy of the said premises under the terms of his contract aforesaid." "(4) That by reason of the plaintiff's failing to reserve for and save for this defendant his rights to the use of said premises under the terms of said contract, and because the plaintiff fraudulently and without the knowledge or consent of the defendant altered and changed the original contract of lease as aforesaid, and by reason of said change and alteration the terms of said contract were varied and defendant's rights to the use of the land terminated without his consent as aforesaid, this defendant was damaged as follows: In the loss of the use of the premises for the year 1911 in the sum of $250." Plaintiff demurs to this counterclaim on the ground that it does not state facts constituting a cause of action or counterclaim. Respondent's only contention is that the facts stated are not such as to entitle the defendant to a recovery of damages in any sum whatever. In this contention we think respondent is right.

[1] The alleged alteration in the lease which is conceded by the demurrer was material, and of such character as would render the same wholly unenforceable by the plaintiff as against the defendant. But the wrongful alteration of a written contract by one party thereto in no manner affects the legal rights of the other party to the contract. The principle is elementary, and is laid down in 2 Cyc. 181 (b), as follows: "An unauthorized SMITH, J. This is an appeal from an change in an instrument, whether it be a order sustaining a demurrer to a counter-mere spoliation or an alteration, will not declaim in defendant's answer. Other matters prive the party against whom it is made of are immaterial. The counterclaim, in substance, alleges that about April 1, 1910, plaintiff and defendant entered into a written contract of lease of certain lands belonging to plaintiff for a term of two years, under which the defendant was to pay plaintiff, as rent, a portion of the crops and hay grown on the leased premises. The second paragraph of the counterclaim alleged that some time after the execution of the written contract the plaintiff fraudulently and without the knowledge or consent of the defendant altered and changed said written contract by inserting therein a clause providing that, “in case the plaintiff herein sold said land, that the contract or lease hereinbefore described should cease and should thereby terminate." The third paragraph of the counterclaim states "that during the farming season of 1910 the defendant farmed the said land and settled with the plaintiff under the terms of his said contract; that during the summer of 1910 plaintiff sold and conveyed the premises herein described to one I. E. Thompson; and that the said I. E. Thompson claimed the right to the use and the occupancy of the said premises during all of the season of

any rights nor confer upon any other person any title." It necessarily follows, if the legal rights of the defendant under this written contract of lease were not and could not have been changed or affected by the wrongful act of the plaintiff in inserting therein the clause providing for a termination of the lease in case of sale of the leased premises, that defendant's right to possession was not and could not have been terminated thereby. The loss of the use of the leased premises therefore could not have been the result or in consequence of the alleged wrongful act of the plaintiff. Had the purchaser Thompson sought to oust the defendant from possession of the leased premises, under a claim that the lease was terminated by a sale of the premises to himself, and that he had become entitled to possession as purchaser, and had the defendant incurred the expense and trouble of defending against such claim, the costs and expenses so incurred might perhaps be considered a result of the wrongful act of the plaintiff in altering the lease, for which he would become liable in damages. But the alteration of the lease in no manner affected defendant's rights to defend against

For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes

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