48 Colo. 494 | Colo. | 1910
delivered the opinion of the court:
Appellee, as plaintiff, brought suit against appellant, as defendant, to quiet title to certain lots. The defendant claimed a lien upon the premises in question growing out of what it terms a building and loan contract, consisting of (1) a certificate for twenty-five shares of the capital stock of the defendant issued to plaintiff, upon which he agreed to pay the sum of $12.50 per month, payable monthly in advance until such stock should mature, which was assigned to defendant as collateral security for a loan made by the latter to. the former; (2) a note of plaintiff for $2,500.00, payable on or before ten years after date, at six per cent, per annum, together with a monthly premium thereon of $15.00, the stock subscription, interest and premium amounting to $40.00 per month, which plaintiff, by the note in question, agreed to pay monthly until such stock matured. The considera
The defendant claimed that plaintiff had failed to comply with the terms of the note and mortgage in question; that for this reason certain sums were due it; that as provided in the mortgage, it had elected to declare the whole sum thereby secured, due; that the .cash surrender value of the stock was $337.22; that after allowing this credit, there was due and unpaid on the $2,500.00 note, including the interest thereon, premiums, monthly installments on the stock certificate, and other items, aggregating the sum of $2,426.43, for which defendant prayed judgment, and a decree foreclosing the mortgage on the lots in controversy. In brief, it' may be said, the defendant contended that, according the the conditions upon which the stock was issued, the terms of the note given, and the mortgage securing it, the plaintiff was to pay the sum of $40.00 per month until his stock reached its face value, namely, $2,500.00, when, by the surrender of the certificate representing it, the $2,500.00 note was to be cancelled and the mortgage securing it released; but as the stock had not matured, and was only worth the surrender value indicated, plaintiff was indebted to the defendant in the sum demanded.
As a defense to this claim, the plaintiff contended' that he and a Mr. Harding had been for a long time intimate and confidential friends; that Harding was the agent of the defendant, in charge of the lots in
As a defense to the note and mortgage embraced in the so-called building contract upon which the defendant relied, the plaintiff averred facts (the sufficiency of which is not challenged), from which it appears that these instruments were secured in such circumstances as to render them void, and for this reason the plaintiff prayed that they be so declared. The pleadings and testimony disclose that at the time plaintiff signed the building and loan contract, he also signed a note for fifteen hundred dollars, payable to the defendant, and a deed of trust on the lots in question securing it, and that this note and the security were subsequently assigned to another party. This is the fifteen-hundred-dollar note above referred to.
By supplemental defense the plaintiff set up that defendant had failed to pay this note, and that the deed of trust securing it had been foreclosed, which would necessitate the payment by plaintiff of the amount for which the premises in dispute were sold in order to redeem.
The evidence establishes, without question, that
The testimony of plaintiff is to the effect that he bargained with Harding, as the agent of defendant, for the purchase of the premises for the sum of three thousand dollars, five hundred dollars of which was to be paid in cash, and the remainder in installments of forty dollars per month without interest, the deferred payments to be secured by deed of trust or mortgage on the lots. His testimony on this subject is corroborated by other witnesses.
On the subject of the execution of the instruments under which the defendant claimed a lien on the premises in dispute, he testifies, in substance, that-when he' paid the five hundred dollars, the defendant was to prepare the necessary papers to evidence their contract, consisting of a. deed to him from it, and a trust deed securing the balance of the purchase price, to be paid in installments of $40.00 per month; that he was subsequently notified by Harding that the deed of trust was ready for his signature; that he called at the office of Mr. Harding, and there found a Mr. Bennett, who at that time was secretary of the defendant; that when the papers he' was to execute were presented for his consideration, they were more voluminous and numerous than he expected, and he suggested to Harding that he had better get a lawyer to look them over for him; that Harding replied: “Charlie, why do you want to fool away your money on a lawyer? You have known me for a number of years, and know that I wouldn’t misrepresent anything to you. These papers are exactly in accordance with our agreement, and you had just
The court found the issues between the parties in favor of the plaintiff, and determined that the note, contract and mortgage held by the defendant were unconscionable and inequitable, and that they were procured from the plaintiff by the defendant through misrepresentation and by untrue and false interpretations thereof. On these findings judgment was rendered to the effect that the note and mortgage, constituting what has been designated as a building and loan contract, were void, and for a sum in favor of plaintiff, the details of which it is not necessary to mention, as the judgment is correct if either of the grounds upon which it is based can be sustained by the record before us. From this judgment the defendant has brought the case to this court for review on appeal.
On behalf of the defendant it is contended that even if the building and loan contract cancelled by the decree of the court was procured by misrepresentation, and by untrue and false interpretations thereof, the circumstances were such that a court of equity was not justified in cancelling them upon the ground that they had been procured by fraud. In support of this claim it is contended that the plaintiff was guilty of such negligence in failing to read the instruments he executed that a court of equity will not relieve him from the consequences of his folly in these respects. Notes and mortgages duly executed and acknowledged should not be set aside for alleged misrepresentations with respect to their contents except where the testimony on the subject is clear and convincing.—Langley v. Fitzgerald, 43 Colo. 301. This rule of law, however, which should be observed and followed in cases of this character, does not necessarily mean that where there is a con
Applying these propositions to the case at bar, we are of the opinion the trial, judge was right in holding that the.instruments relied upon by defendant to establish a lien upon the property in controversy were obtained through misrepresentation, and by untrue and false interpretations thereof, and were, therefore, void. This conclusion renders it unnecessary to consider the other ground upon which the trial court based its decision.
The judgment of the District Court is affirmed.
Affirmed.
Mr. Justice Musser and Mr. Justice Hill concur.