80 P. 307 | Wyo. | 1905
Lead Opinion
This is a proceeding in equity to foreclose a mortgage upon certain real estate situated in Albany County, Wyoming. The parties here sustain the same relation that they did in the trial court and will be referred to respectively as plaintiff and defendant. The mortgage in question is the last of a series of three mortgages executed by the defendant Tepper upon the same property. All of the mortgages, and the notes for which they were security, were executed in the State of California, where the parties in each instance resided.
On December 19, 1886, the defendant executed a mortgage to one Carl Weigleb upon the property in question, to secure the payment of a note of even date therewith, for the sum of sixteen or eighteen hundred dollars, there being a conflict in the evidence as to the exact amount of this note and mortgage. Neither the note or mortgage were offered in evidence, and it is impossible to ascertain the exact amount from arwthing that appears in the record. On June 20, 1889, Weigleb assigned this note and mortgage to the plaintiff, Conradt. On June 23, 1891, the defendant executed to the plaintiff a mortgage upon the property in question; with a note of even date therewith, to secure the sum of two thousand dollars, plaintiff releasing the original mortgage to Weigleb as part of the consideration for the
The plaintiff in his petition asks for a decree of foreclosure and sale of the property, and for a judgment against the defendant for any deficiency that may remain after applying all the proceeds of said property to the satisfaction of the judgment. Defendant answered by admitting the execution of the note and mortgage, but alleging that the note and mortgage were made to the plaintiff without consideration. The further defense was interposed that the plaintiff, at the time the transactions in question occurred, was a member of a firm of stock brokers doing business in the State of California, in the firm name of E. Gauthier & Co., and that the note and mortgage in question were made to the plaintiff as trustee for said firm to secure marginal losses incurred by the defendant in his dealings in mining-stocks on the board of trade through said firm; relying upon the provision of the constitution of California, prohibiting the buying and selling of the capital stock of corporations on margins or for future delivery, declaring all such contracts void and providing- for the recovery of money paid in such transactions. Plaintiff in his reply denied generally the allegations of the defense and all matters of fraud or avoidance set up and charged in the answer.
At the trial of the cause the defendant filed an amended answer, alleging, in addition to the defense set forth in the original answer, that the mortgage was not witnessed and was, therefore, not entitled to record and void, and asked for a cancellation of the mortgage and note, and for judgment against the plaintiff in the sum of $1,071.05,'for rents collected by the plaintiff on said property and alleged to have been wrongfully applied to the payment of interest on said
The plaintiff in error has filed a motion in this court to strike the bill of exceptions from the files, for the reason that it does not contain the order of the court overruling the motion for a new tidal, and for the further reason that there is no finding by the judge signing the same that the said bill is true or contains a true recital of the facts therein contained. In the absence of anything to indicate that the facts set forth in the bill of exceptions are not true, the signature of the trial judge to the bill imports verity and will he presumed to be a sufficient verification of the truth of the statements therein contained. In the bill of exceptions, immediatel}'- following- a copy of the motion for a new trial, we find the following entry: “and thereafter, to-wit, on .the third day of January, A. D. 1903, the court having-denied the said motion to which ruling the defendant at the time excepted, leave was given the said plaintiff up to and including the first day of the next ensuing- term of the court within which' to reduce his objections and exceptions to writing, and file a bill of exceptions herein.” It will be observed that the bill of exceptions recites the fact of the denial of the motion and an exception thereto. We think this is all that is required. It is unnecessary to incorporate in the bill, of exceptions a copy of the journal entry overruling the motion. The motion to strike is denied.
That the note and mortgage in question were without any legal consideration was the chief defense interposed by the defendant in the trial court. It is claimed that the note and mortgage were given to the plaintiff as trustee for E. Gauthier & Co., a firm of stock brokers doing business in the State of California, of which firm the plaintiff was a member, to secure said firm for stocks purchased for the defendant on margins or for future delivery. On this point there is a sharp conflict in the evidence, but we think the evidence sustains the allegation of the answer to the effect that the note and mortgage were executed to the plaintiff as trustee for the firm of Gauthier & Co., and that no money actually passed from the plaintiff to the defendant, as consideration for the execution of the note and mortgage; but that the difference between the first and second mortgages and the second and third mortgages, after
The mortgage in litigation is the last of a series of three mortgages, and each of the previous mortgages became merged in this one. It will, therefore, be necessary to consider each of the mortgages and the transactions surrounding their execution. The first mortgage was executed to Carl Weigleb three years before the defendant, according to his own testimony and the undisputed evidence of all the witnesses, had any dealings of any kind whatever with the plaintiff. It is claimed, however, that this mortgage was assigned by Weigleb to the plaintiff in pajmient of margins on stock; and that the consideration for the assignment was tainted. Weigleb testifies that the consideration for the assignment of the note and mortgage to Con-radt was to protect the account of one Bachman, whom he thought had dealings in stocks with the plaintiff. This assignment was made, according to the undisputed evidence of the witnesses in this case, more than eighteen months before the defendant had any dealings whatever with the plaintiff or the firm of Gauthier & Co. It does not appear that the ’assignment had any connection whatever with airy transactions between the plaintiff and defendant, and it is not clear to us how this assignment from Weigleb to the plaintiff can furnish any relief to thi^ defendant. So far as the record discloses, the consideration for the mortgage between Weigleb and the defendant was untainted, and so far as the defendant is concerned it is immaterial what Weigleb did with the mortgage. It still remained in the hands of the plaintiff, or any other legal assignee, a valid lien against the property of the defendant. The principle is well established that when the consideration of a mortgage is made up of several distinct transactions, some of which are legal and some of which are not,
As to the two thousand dollar mortgage, plaintiff testifies that he paid the defendant one hundred and fifty dollars in cash, being the difference between the amount due on the mortgage to Weigleb and the one for two -thousand dollars. Defendant testifies that he never received a cent, but that the difference was applied by the plaintiff to make up the defendant’s marginal losses to Gauthier'& Co.
As to the mortgage in question, plaintiff testifies that the fifteen hundred dollars of consideration, remaining after the cancellation of the second mortgage, was paid to the defendant in coin, twenty dollar gold pieces. The defendant again testifies that he never received a cent of money from the difference between the first and second and the second and third mortgages, but that it was placed to his credit on the books of Gauthier & Co. to protect his account in the stock dealing transactions. As before stated, on this point we think the District Court was justified in holding with the defendant.
It is important to consider the application of the provision of .the constitution of California above cited to this case. It appears from the record that the defendant, for a number of .years prior to the commencement of any transactions between himself and the plaintiff, had been dealing in stocks on the board of trade in San Francisco, carrying an account with different firms of stock brokers, and frequently transferring his account from one firm of brokers to another. On December xo, 1890, he transferred his account from Refish & Co., a firm of stock brokers with whom he had been doing business, to Gauthier & Co. In order to secure the stock that Refish & Co. held as security for the balance owing them by the defendant, Gauthier & Co. advanced for the defendant to Refish & Co. the sum of $665.55 and took the stock then held by Refish & Co. as security for this advancement, the certificates for such stock being delivered to Gauthier & Co. at this time. From this time on until the defendant closed his account with Gauthier & Co. stocks were bought and sold by Gauthier & Co., from time to time, at the request of and on the account of the defendant. On July 20, 1891, Weigleb, who had also an account in stock transactions with Gauthier & Co., transferred his account to the defendant. The stock held for Weigleb was credited on the books of Gauthier & Co. to the account of the defendant, Pepper, Gauthier & Co. at
In many states, in transactions similar to those involved in this case, the broker is held to be the agent 'of the cus.-tomer; but in California, the courts hold that the relation between the broker and customer is that of vendor and vendee. (Cashman v. Root, 89 Cal., 373; 26 Pac., 883.) In interpreting the provision of the constitution of California, now under consideration, our conclusions must of necessity be governed by the construction placed upon it bv the courts of that state. Assuming, for the purposes of this case, that the relation between Gauthier & Co. and the defendant was that of vendor and vendee, we are of the opinion that a portion of the transactions between the defendant and Gauthier & Co. do not constitute dealing in stocks on margins or for future delivery. It appears that a
We think the weight of authority sustains the view that, even though stock is purchased upon margin, if the customer on whose account the stock is purchased afterwards pays the broker the amount of advancements he has made, and for which the broker holds the stock' as a pledge or
The trial court found generally for the defendant without stating any conclusions either of law or of fact’. Evidently the court held that the entire consideration for which the mortgage was given went to secure the account óf the defendant with Gauthier & Co., and that such account was in its entirety void, as constituting purchases of stock on margins or for future delivery. As we have airead}'- suggested, the court was justified in finding from the evidence that that portion of the consideration of the mortgage in question, which was not embraced in the original mortgage to Weigleb, was given to secure defendant's account with Gauthier & Co., and that so much of said account, so secured, as constituted marginal stock transactions was void, which to that extent would render the consideration for the mortgage void. The court erred in holding void the entire account of defendant with Gauthier & Co. For the reasons stated in this opinion, that portion of the consideration represented by the amount embraced in the original mortgage to Weigleb constitutes a valid charge against the defendant; all proper and reasonable charges on account of stock purchased for the defendant and subsequently delivered to him or to his brokers by his direction constitute valid charges against the defendant; any money advanced by Gauthier & Co. to Refish & Co. for the defendant on December 10, 1890, at the time that the account was opened, together with such interest thereon as the law would allow, after deducting the proceeds of that portion of the stock received from Refish & Co. which was sold by Gauthier & Co. and placed to the credit of the defendant, constitutes a valid
As the judgment must be reversed and the cause remanded for a new trial, it is proper to say that it will be the duty of .the court upon another trial to ascertain the amount of the valid indebtedness of the defendant to Gauthier & Co., for which the mortgage was in part given as security. We think it will be necessary to take further evidence in order to arrive at a correct detennination of that matter, for the reason that the evidence introduced at the former trial was not taken upon this theory. The plaintiff’s case was evidently presented upon the theory that he had actually loaned the money to defendant independent of his dealings with Gauthier & Co., and further that none of such dealings were void; while the defendant’s case was presented upon the theory that his entire account with Gauthier & Co. was void. For this reason the evidence fails to explain many matters which may be found material to the inquiry herein suggested.
The judgment of the District Court is reversed and the cause remanded for a new trial. Reversed and remanded.
Rehearing
on petition eor rehearing.
This cause was heretofore decided by this court. (81 Pac., 307.) A petition for rehearing was filed, together with a