Becker v. Munkelt

BARNARD, P. J.

The defendants have appealed from an order directing the payment to the plaintiffs of the sum of $1188.34 which had been deposited with the clerk of the court.

The plaintiffs conveyed by grant deed a certain parcel of real property to the defendants as trustees for certain creditors of the plaintiff husband. Thereafter, and on April 22, 1929, the plaintiffs brought this action alleging that this deed had-been obtained by fraudulent representations and seeking a reconveyance of the property. The defendants filed an answer supporting the validity of the conveyance and their right to sell the property for the purposes of the trust. After a hearing the court filed findings and an interlocutory judgment, finding in effect that this deed was an equitable mortgage given to secure debts but that the property involved was not to be sold until certain other securities had been exhausted; that it could not be told without a further hearing whether such other securities had been exhausted; and that the defendants could not foreclose said deed as a mortgage until they had filed a report and accounting showing the necessity for such procedure. The interlocutory judgment followed these findings and provided that the defendants, as trustees, should file an account and report within a designated time and naming the time within which objections thereto might be filed.

[763]

A report and accounting was filed and no objection being made the court filed its findings of fact, conclusions of law and a decree of foreclosure. After finding that a sale of the property was necessary the court found that while this action was pending and on July 26, 1929, the parties to the action entered into a written agreement which provided that the property in question should be leased, that it should be mortgaged to one Cline for the purpose of paying off certain delinquent taxes, that the rent should be paid to a certain title company and applied by it upon the principal and interest of the Cline mortgage until the same was paid in full, that the title company should have the right to use any portion of said rental “to pay before delinquency any taxes that may be hereafter accrued upon said premises during the life and term of said mortgage to the said H. C. Cline”, and that after said mortgage had been paid any balance of said rental remaining in the hands of the title company should be paid into court in this action “or shall be paid in accordance with such final order or judgment in said cause as shall direct and control the payment of said money. If no order or judgment shall have been made directing the disposition of the said money then the same shall be paid into said court pending a final determination of said case.” The court then found that after the Cline mortgage was paid the title company had paid into court $1188.34 “to be disposed of by the court in accordance with the provisions” of said agreement; that no taxes had been paid on this property after the commencement of this action except such as were paid pursuant to said agreement; and that certain taxes amounting to about $1300 “are now unpaid”. The usual decree of foreclosure and order of sale was entered on April 25, 1934, and in addition thereto the decree provided as follows: