of Widell, as president of the corporation, to attend to the business of securing the necessary money and loans for carrying on the business of the corporation and to execute on its behalf promissory notes therefor, all of which was known to its directors and stockholders; that one of the purposes of securing the loan in question from Hoerr was to secure money for the corporation; and, further, that $20,000 thereof was placed to its credit and used by it in paying its employees and other indebtedness. Again, the note was upon its face the negotiable note of the corporation, and Hoerr could have negotiated it. Therefore the evidence in this case is amply sufficient to justify the conclusion that, eliminating any question of usury, the $5,000 note exacted by Hoerr as a bonus was a valid obligation of the corporation; for it actually obtained by the transaction a sum of money four times greater than the amount of the note, which was used to discharge its obligations. We are not called upon to discuss or determine whether the note was void because usurious, for it is clear that Hoerr cannot urge the claim.

3. The last contention of the appellants to be considered is that the defendant bank is not in position to take advantage of usury in the Hoerr mortgage, for the reason that a subsequent mortgagee cannot allege usury in a prior mortgage. Even if such be the rule, neither Boynton nor Hoerr is in a position to invoke it in this case, for the trial court found and decided at the suit of the plaintiffs that the Hoerr mortgage was void and should be canceled of record, and the only relief granted to the defendant bank was judgment foreclosing its mortgage. It may be conceded that the result of the judgment will be that the bank's mortgage is a first lien on the mortgaged premises; but this result follows from the judgment in favor of the plaintiffs canceling the Hoerr mortgage and the record thereof as void. If, however, the trial court had expressly directed judgment in favor of the bank canceling the Hoerr mortgage, it would not have been error; for the bank did not in and by its mortgage assume and agree to pay the Hoerr mortgage, nor was the bank's mortgage made by its terms subject to the Hoerr mortgage, for the only reference to his mortgage therein was to the effect that the premises were then "incumbered by a mortgage to W. G. Hoerr to secure payment of the sum of twentyfive thousand dollars." This does not estop the bank from contesting the validity of the Hoerr mortgage. Calkins v. Copley, 29 Minn. 471, 13 N. W. 904.

Order affirmed.

THOMAS F. FLOODY v. GREAT NORTHERN RAILWAY COMPANY.1

Nos. 15,634-(99).

April 24, 1908.

Right to Dismiss Action-Appeal from Order Granting New Trial.

Where a cause has so far proceeded that the defendant has obtained a favorable decision or verdict on the merits of the action, plaintiff cannot, as a matter of right, after obtaining an order vacating the decision or verdict and granting a new trial, dismiss the action to the prejudice of defendant's right to review the order on appeal. Phelps v. Winona & St. Peter R. Co., 37 Minn. 485, distinguished.

New Trial.

June 12, 1908.

Upon the facts stated in the opinion, the trial court had jurisdiction, and did not abuse its sound legal discretion in vacating a former order, which directed a verdict in favor of appellant, and in granting a new trial.

Action in the district court for Ramsey county against the Great Northern Railway Company and the Chicago, St. Paul, Minneapolis & Omaha Railway Company to recover $25,000 for personal injuries. The case was tried before Hallam, J., and a jury which returned a verdict in favor of plaintiff for $15,000, the court, before the jury retired, having granted the motion of the Great Northern Company to direct a verdict in its favor. The further history of the case is stated in the opinions. From an order granting plaintiff's motion for a new trial against the Great Northern Railway Company, that company appealed. A motion to dismiss the appeal was denied, and the order appealed from was affirmed.

M. L. Countryman, for appellant.

Humphrey Barton and John H. Kay, for respondent.

The following opinion was filed on April 24, 1908.

BROWN, J.

In an action for personal injuries plaintiff had a verdict against one of the defendants, the Chicago, St. Paul, Minneapolis & Omaha Railway Company, but a verdict was directed by the court in favor of the other, the Great Northern Railway Company. Thereafter the Omaha Company moved for a new trial on various grounds, and from an order denying the motion appealed to this court, where the order was reversed and a new trial granted. Floody v. Great Northern Ry. Co., 102 Minn. 81, 112 N. W. 875, 1081. After the cause was remanded from this court, plaintiff moved for a new trial as to the Great Northern Company, and his motion was granted on October 29, 1907. On the following day plaintiff attempted to dismiss the action as to both defendants, notice of which was duly served upon the attorneys of the Great Northern Company. If plaintiff had the right to dismiss at this time, the proceedings taken for that purpose were in all things regular and effectual. The following day, October 31, 1907, defendant Great Northern Company appealed from the order granting plaintiff's motion for a new trial, and plaintiff now moves to dismiss the appeal, on the ground that there was no action pending when it was taken.

Our statutes (section 4195, R. L. 1905) undertake to regulate and control the subject of the dismissal of actions, and provide when and how in the instances there specifically mentioned an action may be dismissed without a determination of its merits; but a case presenting facts like those at bar is not provided for. Under the statute referred to, plaintiff may dismiss as a matter of right in all cases where no provisional remedy has been granted, or counterclaim interposed, or affirmative relief demanded by defendant, where he elects to do so before the commencement of the trial. After the trial begins he cannot in any case dismiss without the consent of defendant or permission of the court. In the case at bar there had been a trial of the action with a verdict for defendant, which was set aside in the new trial granted on plaintiff's motion, after which plaintiff gave notice of dismissal. As already suggested, our statutes do not cover a case of this kind, and we turn to the rules of the common law in determining the right of plaintiff to thus finally dispose of the case.

Under the early English practice a plaintiff or complainant in an action or proceeding had the right voluntarily to discontinue or dismiss his action even after trial and adverse decision. Washburn v. Allen, 77 Me. 344, 346. The rule was followed for a time in some of the courts of this country. People v. Mayor's Court of Albany, 1 Wend. 36; Wooster v. Burr, 2 Wend. 295. But the injustice of the rule to defendant and a purpose to protect his rights brought modifications by acts of parliament and decisions of the courts, so that finally it became settled at common law that plaintiff could not dismiss as a matter of right where it would prejudice rights of defendant acquired in the due course of the action. The rule is clearly stated in Cooper v. Lewis, 2 Phillips, 178, 181, where the court said: "The plaintiff is allowed to dismiss his bill on the assumption that it leaves the defendant in the same position that he would have stood if the suit had not been instituted, but that is not so where there has been a proceeding in the cause which has given the defendant a right against the plaintiff." The rule thus expressed has been adopted and followed, where the subject is not covered by statute, by nearly all the courts of this country. Bank v. Rose, 1 Rich. Eq. (S. C.) 292; Benton v. Bellows, 61 Ν. Η. 107; State v. Hemingway, 69 Miss. 491, 10 South. 575; Conner v. Drake, 1 Oh. St. 166, 170; 14 Cyc. 406, and cases cited. In Bank v. Rose, supra, the court held that, whenever in the progress of the cause the defendant entitles himself to a decree against the plaintiff, the latter cannot voluntarily dismiss the action to the prejudice of the right so acquired.

Within this rule it is clear that plaintiff's attempted dismissal was ineffectual as to the Great Northern Company. In other words, he had no right under the particular circumstances of the action at the time to thus terminate it without the consent of defendant. Defendant's substantial rights were materially affected, and to hold the dismissal a valid termination of the action would destroy absolutely the right to protect the verdict which had been rendered in its favor. If the verdict was right under the principles of law applicable to the facts, it finally ended the litigation in defendant's favor, and a judg

ment thereon would bar another action for the same cause. Defendant, therefore, had the right to a review of the order and to sustain the verdict, if the order vacating it was erroneous. Our statutes provide that an appeal from such an order may be taken at any time within thirty days from the date of notice that it has been filed, and if plaintiff may dismiss the action before the expiration of this period the right of appeal is effectually taken away and defendant compelled to submit to a second trial of the action, when in a given case an appeal might result in a reversal of the order granting a new trial and a reinstatement of the verdict. This would extend to plaintiff an arbitrary privilege to the prejudice of defendant and destroy rights which the rule of voluntary dismissal designs to protect.

We therefore hold, in harmony with the rule stated, that where a cause has so far proceeded that defendant has obtained a favorable decision or verdict on the merits of the action, which he is in a position to insist is right and should stand, plaintiff cannot, after obtaining an order vacating the decision and granting a new trial, and before the expiration of the period for appeal therefrom, dismiss his action to the prejudice of the right of defendant to review the order on appeal.

The case is unlike Phelps v. Winona & St. Peter R. Co., 37 Minn. 485, 35 N. W. 273, 5 Am. St. 867. There plaintiff obtained a verdict, which the court set aside on defendant's motion, leaving the parties in the same situation as though no trial had taken place, and by the dismissal both parties stood in the same position they did before the action was commenced. Here defendant had the verdict, and plaintiff's dismissal, if allowed, would bar its right to maintain and insist that the verdict was right and should stand. Of course, if in such case defendant should not, within the time allowed therefor, appeal from the order vacating the verdict, plaintiff could, within the rule of the Phelps case, thereafter dismiss his action.

Motion to dismiss denied.

The following opinion was filed on June 12, 1908.

LEWIS, J.

This cause was originally tried in the district court May 9, 1906. Respondent recovered a verdict against the Omaha Company, and the