208 Wis. 628 | Wis. | 1932
The following opinion was filed May 10, 1932:
The controversy on this appeal is between the bank and the three appellants who, together with the six indorsers of the note of June 2d and two others, guaranteed the note of December 12, 1927. In the view we take of this controversy a comparatively narrow question is here for determination: Did the trial court err in failing to dismiss, on the merits, the bank’s cross-complaint as against the five guarantors who guaranteed only the payment of the note of December 12th?
Prior to December 12th the bank held a note for $20,000 made by the Country Club, which was indorsed by six individuals and secured by deed of all the lands belonging to
While the bank did not, in its original answer and cross-complaint, specifically pray for rescission of the deal of December 12th wherein it surrendered its note of June 2d and satisfied its mortgage security by conveying the land covered thereby back to the Country Club in consideration of receiving a new note for $20,000 guaranteed by the eleven guarantors, three of whom are the appellants herein, it did allege all of the facts and circumstances surrounding its several transactions with the Country Club and- others, and finally prayed, among other things, for such further and other judgment or relief as may be just and equitable in the premises. It is apparent that the bank in setting forth in its answer and cross-complaint all of the facts and circumstances and praying for such relief as may be just and equitable, thereby fully submitted its claims and rights to the jurisdiction of the court, sitting as a court of equity.
Had the bank specifically asked for rescission of the December 12th transaction, cancellation of its deed, and
We see little difference between a situation in which rescission or cancellation is specifically asked, and one in which all of the facts justifying rescission and cancellation are submitted to the court with the result that the court grants rescission, cancels instruments, and restores a party to a prior status as fully as the circumstances will possibly permit.
Under the June note and deed the bank had a certain status which continued to exist up until the time of the December transactions. Its status was then changed. It surrendered the June note and its deed security. Up until that time it had no claim against the appellants. They were not parties to any transaction prior to that time. The entry of the appellants into the December transaction was for the purpose of facilitating the proposed refinancing of the Country Club, and their guaranty of the December note was the consideration which led the bank to cancel its June
The court having had jurisdiction of all of the parties it should have determined all of their rights, to the end that the whole controversy might be settled and determined. Since the judgment of the court fully restored the bank to. its status under the June 2d note, the note of December 12th should, it seems to us, have been canceled and the five additional guarantors discharged. We think the judgment of the court should have provided for a dismissal of the bank’s cross-complaint against the five additional guarantors on the merits.
By the Court. — Judgment reversed, with directions to modify the judgment in accordance with the opinion..
A motion for a rehearing was denied, with $25 costs, on .October 11, 1932.