Dickson v. Cole

(1) Action,, at law or in equity f (2) Cause of action: Assignor and assignee of mortgage: Release of mortgage debts by assignor. (3) Hffect of admissions in pleadings. (4) Burden of proof; Mattes's of defense: Non-suit. 1. The complaint avers, in substance, that plaintiff transferred to defendant notes and mortgages to secure a debt due the latter; and defendant agreed to use due diligence in the collection thereof, to retain out of the proceeds the amount of such debt, with costs and expenses of collection, and to pay the surplus to the plaintiff; that defendant made such collections; and that, after deducting the amount of such debt, costs and expenses, he has a certain surplus in his hands, for which judgment is demanded. Reid, that a cause of action at law is stated, and not one in equity for an accounting. 2. If defendant took from the mortgagor a conveyance of the premises described in one of such mortgages, and released the mortgage debt without any agreement with the plaintiff in regard thereto, he is liable to account to plaintiff for the amount of such debt. 3. If allegations of the complaint are admitted in the answer, plaintiff is not required to prove them, although such admissions are made in connection with averments which he controverts, or, although the allegations thus admitted are elsewhere denied in the answer. Sexton v. Bhames, 13 Wis., 99, and other cases in this court followed. 4. The answer here admits all the allegations of the complaint above stated, but avers, by way of avoidance, a further agreement between the parties. Plaintiff made proof only that at a certain date (after the collection of said securities), he demanded of the defendant a statement of the business, and that defendant admitted that it was closed up, and promised to make such statement. Defendant then moved for a nonsuit, which was denied. Held, (1.) That the bwrden of proof was on defendant, to show the new agreement set up in the answer. (2.) That plaintiff, under the pleadings, was not required to produce evidence except as to the demand for a statement of the business, and probably even that was necessary only to fix the time when interest on his claim should commence. (3.) That if any costs or expenses of collection accrued, the amount of which is not admitted in the complaint, that is matter of defense, to be set up and proved by the defendant. (4.) That the nonsuit was therefore properly denied.

APPEAL from the Circuit Court for Dane County. It appears by the pleadings that on the 7th of June, 1860, the plaintiff was indebted to the defendant in the sum of one thousand dollars, and that, for the purpose of securing the same, he transferred to the defendant four promissory notes, secured by three mortgages on real estate, on which there was then unpaid over thirteen hundred dollars of principal, and some interest. The defendant agreed to use due diligence in collecting said notes and mortgages, and, retaining the amount of plaintiff’s indebtedness to him, to pay over the surplus, if any, to the plaintiff, less the necessary costs and expenses of collection. In November, 1860, the defendant collected one of the notes and mortgages in cash, the amount thereof being about $350. In 1862 he received from another mortgagor, Rugg, a conveyance of the mortgaged premises, in which he was named as grantee, in full satisfaction and discharge of the indebtedness of said Rugg. The principal of such indebtedness was over $800, and some years’ interest had accrued thereon. Rugg was insolvent. The remaining mortgage, which was for $300, and executed by one Lord, who was also insolvent, was foreclosed by the defendant in his own name. On the foreclosure sale, which was in 1863, the defendant purchased the mortgaged premises for the full amount of the debt secured by the mortgage, and costs of foreclosure, and took a conveyance thereof to himself from the officer making such sale. Thus far the facts are undisputed. The action is for a money demand only, arising on contract. The complaint alleges that the defendant has collected on such notes and mortgages five hundred dollars more than his debt against the plaintiff and the costs and expenses of collection; and demands judgment for that sum and interest from a specified date. The answer of the defendant alleges that on or about November 24th, 1861, the parties made a further agreement, by 'which he released the plaintiff from the payment of said debt of $1,000 and interest, in consideration whereof the plaintiff released and surrendered to the defendant all claim for the money collected on the one note and mortgage, and all claim to the other notes and mortgages and the proceeds thereof, and agreed that said money, notes and mortgages should be the absolute property o£ the defendant. And it is further alleged, that, pursuant to such agreement, and with the knowledge and consent of the plaintiff, the defendant settled with the mortgagor Rugg, “ by taking and accepting from him, in the defendant’s own right, and for his own use, a deed of conveyance by quitclaim of the premises described-in said mortgages, in satisfaction of said note and mortgagesand that he foreclosed the Lord mortgage “in his own name and in his own right,” and purchased at the foreclosure sale the mortgaged premises for the amount of the mortgage debt and costs of foreclosure, taking a conveyance thereof to himself, as before stated. The answer also alleges, and the testimony tends to show, that the premises covered by the Rugg and Lord mortgages were not equal in value to the respective mortgage debts. But upon this question the testimony is conflicting. On the trial, the plaintiff introduced testimony tending to show that in 1863 he asked the defendant to send him a statement of the business, and that defendant said it was all closed up, and promised to make a statement thereof, but has never done so ; and there rested his case. Thereupon the defendant moved the court for a nonsuit, on the grounds, 1st. That the plaintiff is not entitled to recover under the complaint; and 2nd. That there is not sufficient evidence to entitle him to recover. The court denied the motion. The testimony on the trial in relation to the special agreement stated in the answer is very conflicting — that on behalf of the defendant tending to show that such an agreement was entered into as therein alleged, and that on behalf of the plaintiff tending to show the contrary. It became a question of fact on the trial, whether the de.fendant settled the Rugg mortgages by the direction and with the consent of the plaintiff; and a letter written by the latter to the former, dated November 24th, 1861, was read in evidence, wherein he advised the defendant ■ to settle the matter with Rugg and take a deed of the property. The plaintiff testified that he had previously told the defendant that if he took the property he must take it at the full amount of the mortgages upon it. Under the charge of the court, which is further mentioned in the following opinion, the jury found for the plaintiff, and assessed his damages at $830. After a motion for a new trial had been denied, judgment was perfected on the verdict; and the defendant appealed. It is not denied that if the plaintiff is entitled to be allowed the full amount of the mortgages, the verdict is for the proper sum. 1. The court should have nonsuited the plaintiff. (1.) The complaint is insufficient. The plaintiff’s real cause of action is for an account. There is no allegation as to the amount of costs and expenses incurred by the defendant in collecting the notes and mortgages, or that the plaintiff had no knowledge upon the subject. (2.) There was no evidence given by the plaintiff to show that defendant had collected anything, nor as to the amount of costs and expenses in collecting; so that when the plaintiff rested, it was not possible for the jury justly to find that any sum was due from defendant to plaintiff. The plaintiff, having relied upon the admission in the answer, was bound to take the whole admission together. When the admission is in writing, and is the only evidence in the case, there is no rule which will allow a court or jury to find one part true, and the other part false. The answer, taken as a whole, is a denial of indebtedness, and yet the court held that it admitted an indebtedness. This was error. Dorlon v. Douglas, 6 Barb., 451; Troy etc. B. B. Co. v. Kerr, 17 id., 581. The costs and expenses of collecting tbe notes and mortgages may bave amounted to the whole residue, and the plaintiff should have proved that he was entitled to recover some specific sum. 2. The weight of testimony is with the defendant. But if the court considers that the testimony of plaintiff and defendant is balanced, then there can be no recovery, as the written testimony shows that defendant took title to the Bugg property with the plaintiff’s consent, and that property was substituted for the notes and mortgage of Bugg, and the defendant held it as trustee; and until he sold it there could be no liability. insisted that plaintiff had a right to avail himself of defendant’s admissions, and these, with the proofs offered on the trial by the plaintiff, were plainly sufficient in law to entitle him to recover.