Commercial Bank v. Jackson
9 S.D. 605
S.D.
1897
Check Treatment
Haney, J.

The issues presented by this appeal are stated and exhaustively discussed in the decision heretofore filed and reported. 7 S. D. 135, 63 N. W. 548. Both parties petitioned for a rehearing — appellant contending the judgment of the lower court should have been reversed; respondent, that it should have been affirmed without modification. After a careful re-examination of the record, and consideration of the able arguments of counsel upon the rehearing, the court is constrained to adhere to the views expressed in its former opinion, adding to the rea*606sons therein assigned a few observations in support of the modifications.

Respondent seems to be content with the pro rata rule as announced, but insists it has been wrongly applied in this case. It is contended that appellant is precluded from invoking it, for the reason that she alleges in her affirmative defense that the two $2,000 notes “were also turned out to be held by said bank as collateral to the payment of the first two of said notes.” Assuming that, if it was agreed between her and the bank that her note should be held as collateral to the others, the others should be first paid out of the proceeds of the sale, there is no error in our former decision, because the existence of such an agreement does not appear from the record before us. It is true that the admission or averment in an answer of any fact alleged in the complaint establishes the existence of such fact, and renders evidence thereof unnecessary. McLaughlin v. Alexander, 2 S. D. 226, 49 N. W. 99; Humpfner v. D. M. Osborne & Co., 2 S. D. 310, 50 N. W. 88; Calkins v. Mining Co., 5 S. D. 299, 58 N. W. 797; Myrick v. Bill, 3 Dak. 284, 17 N. W. 268. In the case last cited, wherein the doctrine is extended to the utmost limit, its' operation is restricted to an admission or avermeno which establishes plaintiffs right, and we are strongly inclined to the opinion that it should apply only where the admission or averment relates to a fact alleged in the complaint. •Ordinarily plaintiffs right of action must depend upon the facts alleged in his complaint, and, if it fails to state a cause of _action, he cannot recover. The abstract does not contain the complaint. It is stated that it is in the usual form for the foreclosure of real estate mortgages. Hence we presume it alleges ownership of all the notes by the plaintiff. Appellant’s averment that the two $2,000 notes are held as collateral security is not an admission of any fact alleged in the complaint. The averment being. new matter in the answer, not relating to a counterclaim, is, in the absence of any evidence, to be taken as controverted. Were the same fact alleged in the complaint it *607would be taken as true, without evidence, because not controverted in the answer. Comp. Laws, § 4933. If appellant is precluded from proving a state of facts different from that alleged in her answer, plaintiff is equally bound by the allegations of its complaint. It would seem that a material issue is raised by the pleadings concerning the manner in which the notes were held by the bank, upon which it is doubtful whether any proper finding was made by the referee. McKenna v. Whittaker (S. D.) 69 N. W. 587. But as neither party here, or in the court below, objected to the referee’s report for failure to find on all the material issues, we think the recitals contained in the statement sent appellant by Rubey, and which is made a part of the referee’s decision, should be accepted as correctly stating the facts. We must presume it was properly received in evidence. As an admission of the manner in which the notes are held by the bank, it is, in the absence of any evidence or any finding to the contrary, conclusive upon the plaintiff. The contents of the statement, and construction to be given it, are fully considered in our former opinion.

It is suggested further that plaintiff’s notes should be first paid, because the pro tanto rule is recognized in Indiana. This cannot be so. It will be presumed the law of Illinois on this subject is the same as the law of this state. The court has decided the contract by which the bank acquired its rights was made in Illinois, and the land mortgaged, to secure the notes is located in this state, Thomas v. Pendleton, 1 S. D. 150, 46 N. W. 180; Meuer v. Railway Co., 5 S. D. 568, 59 N. W. 945; Sandmeyer v. Insurance Co., 2 S. D. 346, 50 N. W. 353. The judgment below must be modified by providing that the proceeds arising from the sale of the mortgaged premises, after paying the attorney’s fees, costs, and charges of sale, shall be paid to plaintiff and appellant Lydia E. Jackson, in the proportion of two-fifths to her and three-fifths to the plaintiff; and the judgment, when so modified, is affirmed — the parties, respectively, to pay their own costs, including the costs of the rehearing.