Gertner v. Limon National Bank

Mr. Justice Butler,

dissenting.

The material part of the transaction between Gertner and The Limón National Bank is in writing; hence this court has opportunity equal to that of the trial court to determine the nature of the transaction. The Limón bank was pressing Ewy for payment. Through the efforts of Mrs. Ewy, an arrangement was made whereby Ewy deeded to Gertner the Cheyenne county land, and Gertner borrowed money on some Minnesota land, and, through the First National Bank of Westbrook, Minnesota, sent to the Limón bank a draft for $14,411.70, payable to the order of Ewy. The draft was accompanied by the letter that is referred to in the majority opinion as the “fourth letter.” As stated in that letter, the draft was sent with the understanding that the mortgages covering the land in question “be satisfied and the satisfaction placed of record.” The letter requested the Limón bank to “see to this,” and to send to the Westbrook bank “the old mortgages, notes and abstract covering Mr. Ewy’s land in Cheyenne county.” This was a clear, definite offer to pay the amount enclosed, provided that, if accepted, it must be in satisfaction and discharge of the mortgages upon the land. The Limón bank, when it received the draft, had the option to accept the offer, or to reject it. It accepted the offer by the letter referred to as the “fifth letter,” and by endorsing the draft in Ewy’s name, collecting it, and applying the proceeds on Ewy’s indebtedness. Wills, the Limón bank officer who wrote this letter, testified that the party who wrote the fourth letter seemed to think that the mortgage *44 was for $14,350; that that is what he (Wills) thought the person who wrote the fourth letter believed; but that he (Wills) did not write him' and tell him that he was mistaken. He swore, however, in attempted explanation, that he “did not know at that time that the land was to be acquired by Gertner; had no reason to believe that. ’ ’ And yet on the very day that he wrote the letter acknowledging the receipt of the draft and promising that “the release and abstract will be forthcoming,” he wrote to Ewy the “sixth letter,” in which he said: “We are today sending for your papers and will have them released as per their request and forward them to them, or to you, whichever you desire. I believe you were to make a deed to them. We will prepare this deed for you if you have not already made one and send it to you for your signatures. Let us know about this.”

When Gertner’s offer and draft were accepted, the mortgage debt, so far as the land was concerned, was paid, and Gertner was entitled to have the mortgage •released, and by suit could have compelled such release. The letter enclosing the draft (“fourth letter”) requested the Limón bank to see to it that the “satisfaction” be placed of record. After awaiting several months, the Westbrook bank (acting for Gertner) received word that no release had been recorded, and that the amount of the incumbrance was $20,000. Ewy’s attention was called to the situation by letter dated March 28,1923 (“ninth letter”). On April 5, the Cattle Loan Company wrote to the Westbrook bank (“tenth letter”) offering to “turn” a first trust deed for $14,500, stating that it wanted title to the land to rest in Ewy and his wife; that it still was carrying some plain notes of Ewy; and that it is “necessary that we have some semblance of security, * * * some sign of security.” On April 30, the Limón bank wrote to the Westbrook bank (“fourteenth letter”) that it was not its intention to force Ewy to pay the loan of $5,200, as it fully expected that his cattle “in the next couple of years” will *45 take care of this deficiency, as “the cattle lie now has show a good margin of profit.” It also said, “We presume he [Gertner] would prefer to have the $20,000 deed of trust credited to [with] $14,500. ’ ’ On April 30, after receiving the assurance in the letter of April 5 (“tenth letter”) that it was necessary for the Cattle Loan Company to have “some semblance of security,” the West-brook bank wrote to the Limón bank on May 4 (“fifteenth letter”) that Gertner “thinks it will be best to reduce your trust deed to $5,200 and leave the land stand in his name for the present time.” On receipt of this letter by the Limón bank, the Cattle Loan Company, on May 7, wrote to the Westbrook bank (“sixteenth letter”) that it had credited $14,500 on Ewy’s note, leaving a balance of $5,200, “which we will hold as security to our loan to Oscar of $5,200.” The trap was sprung. The security no longer was to be a “semblance,” a seeming security, a mere pretense, but was to be converted into a real, an actual, an enforceable security. Gertner’s acquiescence was in the continuance of a mere “semblance” of security. But if it were otherwise; if, laboring under the mistaken belief that, as the Limón bank and the Cattle Loan Company had used his money and also continued to hold the unreleased mortgage on the land, they were in a position to dictate terms to him — terms that he was helpless to refuse — he chose what he considered the lesser of two evils, and acquiesced in the endorsement of a credit of $14,500 on the mortgage debt, intending that the mortgage should continue as a valid security for $5,200 — even on that supposition, the Limón bank-would have no lawful right to foreclose the mortgage. There was no consideration for the revival of any part of the debt, which, so far as the land is concerned, had been fully paid and discharged.

Another matter is worthy of notice. The letter of November 28, 1922 (“sixth letter”), conclusively shows that on that date Wills believed that Ewy was to deed the land to Gertner. Where did he get this belief or *46 knowledge? The testimony of Ewy and his wife furnishes the answer. It is this, in substance: Wills called at the ranch in October, 1922, and proposed that the Ewys go to Minnesota to get Gertner to buy the land for $14,500. He said that if they could sell the land for that amount he would give clear title. Wills did not make two propositions;' simply proposed that they try to sell the land to Gertner. No mention was made of anything except $14,500 to clear the land. To enable them to go, Wills permitted them to use $200 received from the sale of cattle. Wills said, “Why don’t you go back and try to get the old man to buy this?” — referring to the land. Wills told Ewy to sell the land for $14,500 and give Gertner a deed for it, and the bank would release the land and carry the balance against the Ewy cattle. If this conversation did not occur — and Wills swears that it did not — where did Wills get the belief or knowledge that Ewy was to deed the land to Gertner? No answer to this question can be found in the record.

As to the letter of January 31, 1925 (?), in which Mrs. Ewy said, “Mother can now get a loan on her land here to pay off $5,200 on it, if you wish so” (“eighteenth letter”), this is to be said: Mrs. Ewy testified that Mrs. Gertner “knew it was not a lien several months after the deed was given;” that “they never thought it was a lien upon the land. ’ ’ By reason of the extraordinary conduct of the Limón bank, Mrs. Gertner found herself in this predicament: A mortgage that had been satisfied and discharged by her husband, and which the bank had promised to release, Avas held unreleased by the Limón bank, and was liable to be foreclosed. Evidently laboring under a mistake as to her legal rights, she was attempting'to avoid the impending calamity. Viewed as an admission, it is Avithout force; viewed as a promise, it is indefinite and is Avithout any consideration, and therefore it is Avholly ineffectual to re\dve a lien that had been satisfied and discharged.

*47 Entertaining these views, it is impossible for me to concur in the majority opinion. The judgment should be reversed.

Mr. Chief Justice Burke and Mr. Justice Denison authorize me to say that they concur herein.