Northrup v. Security Title Insurance & Guarantee Co.

SHINN, P. J. Lincoln A. Freeman and Molly Luke Freeman, husband and wife, appeal from a judgment in favor of plaintiff, Jessie Northrup, declaring plaintiff to be the owner of certain real property and quieting her title against the claims of appellants Freeman under a promissory note held by Lincoln A. Freeman and a trust deed on said real property securing the same. Plaintiff acquired title by execution sale [519]of the right, title and interest of John and Susan Wight, former owners.

The note for $3,500 which was to be repaid in four months, and the trust deed were dated June 24, 1939. On August 2, 1939, they were transferred to George Pepperdine as security for certain monies to be advanced to John Wight and Lincoln A. Freeman, for use in the development of oil leases in Montana. Pepperdine later transferred them to Consolidated Petroleum Company, which in turn delivered them up, endorsed in blank. Later, Lincoln A. Freeman was named in the assignment as the assignee and he proceeded to take steps for a sale of the property under the trust deed. The court found that the note and trust deed were given by Wight and his wife to Mrs. Freeman without consideration and for the sole purpose of using the same as security for the Pepperdine loan. It was also found that they had been “delivered up” by the holder to John Wight and in truth and in fact were owned by him.

Mr. Freeman testified that he met Wight some time in 1937 and loaned him $300 to help him retain some oil leases; he had borrowed this money from his father, this being his only source of income. From a memorandum book he read items totaling $1,063 as loans to Wight in 1938, part of it his money and the rest of it borrowed from his father, his sister, or from friends. The notations, however, were not made at the time of the supposed transactions. The evidence was that the account was made up as late as 1942. These loans, Freeman testified, were personal loans, not in connection with any business. In June, 1939, he was interested with Wight in an oil venture in Montana; his wife gave him $500 and he loaned it to Wight in cash; on January 10, 1940, his wife loaned Wight an additional $750 in cash; in the following month he loaned Wight $410 which he had received from his father, but this, he testified, might have been given to Wight to pay some of the expenses of their oil venture. He also testified that at the time the $750 was advanced in January 1940 he and his wife understood that the note and trust deed were then held by Mr. Pepperdine but would be returned to Wight after Pepperdine was paid off and would be given to them to secure all monies previously loaned; that he had had a written agreement to this effect, but he had not seen it for quite a long time—that he does not have the agreement; there was another agreement under which he was obligated to Pepperdine, but that he did not have it in his possession; he did not remember