244 P. 335 | Cal. | 1926
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *198 This is an action brought to collect the amount alleged to be due on a promissory note and to foreclose a mortgage given to secure the same. The note and mortgage were executed by the defendant Johnson in favor of the defendant Slocum and assigned by the latter to plaintiff. The complaint is in the usual form of a complaint for the foreclosure of a mortgage. The defendant Johnson answered alleging that the note and mortgage were given in payment of a second-hand Avery tractor purchased by him from the defendant Slocum and that the latter, in order to induce Johnson to purchase said tractor, made certain false and fraudulent representations as to said tractor. Said defendant Johnson also filed a cross-complaint against plaintiff and said defendant Slocum, setting up the same matters as were alleged in his answer and asked for a cancellation of said note and mortgage. The court found that the allegations of defendant Johnson's answer and cross-complaint were true except in some respects not material on this appeal, and gave judgment in favor of Johnson and against plaintiff and Slocum. Plaintiff and Slocum have appealed.
Appellants' first contention for a reversal of the judgment is that the findings are not supported by the evidence. While the evidence is conflicting we are not able to say that it is not sufficient to support respondent's claim that the note and mortgage were procured through the false and *199 fraudulent representations of the defendant Slocum. There was evidence that Slocum represented to respondent that the tractor, for the purchase price of which the note and mortgage were given, was in first-class mechanical condition except for a few loose bolts; that it was good as new; that it had not been used enough to really break the machine in; that it had only plowed about ten acres and that the former owner had no trouble with it; that the tractor had been returned to the previous owner because his land was too steep to operate the machine; that compared with the land of the defendant Johnson on which it was proposed to use the tractor, if purchased, the land of the previous owner was practically straight up and down, and that there was no reason why the tractor would not do perfectly satisfactory work on respondent Johnson's land. There is no question from the evidence but that Johnson believed these statements and relying upon them bought the tractor and gave the note and mortgage sued on herein as payment thereof. The evidence further shows that after the delivery of said tractor to respondent he attempted to use the same upon his land and in doing so the counter-shaft of the tractor broke within three hours after respondent had begun operating it and within ten to twelve days thereafter a second counter-shaft broke; that within one month from the time he began to use the machine a connecting-rod broke and knocked a large hole in the side of the crank-case; that in the ordinary use of the tractor the engine heated excessively; that the tractor would not pull up hill; and the former owner had returned it to the defendant Slocum for the reason that he could not get the power out of it. The evidence further shows that the tractor would not pull the plows up the grades on respondent's land and that these grades were steeper than those of the land of the former owner; that upon the connecting-rod breaking, Johnson notified Slocum of that fact and the latter agreed to take it up with the company; that later the tractor was taken from Johnson's land, and he testified at the trial that "it is all scattered about the ground where they left it when they took it apart." Thereafter respondent gave notice of rescission of the contract, note, and mortgage. This evidence was sufficient to justify the findings of the court that the execution *200 of the note and mortgage was procured by the false and fraudulent representations of the defendant Slocum.
The evidence being sufficient to justify the findings, the judgment against the defendant Slocum is valid. As to the judgment against the plaintiff, the assignee of Slocum, it is conceded by appellants that at the date of the execution of the note and mortgage, April 2, 1921, a note secured by a mortgage was a non-negotiable instrument, although since that date such a note has been made negotiable (Civ. Code, sec.
Neither appellants, the Fair Oaks Bank, nor Slocum set up in any of their pleadings any of the facts which they now rely upon as constituting an estoppel against respondent. In other words, neither of said appellants have pleaded any facts by way of estoppel. Each of said appellants was made a defendant in respondent's cross-complaint asking for the cancellation of said note and mortgage, and each *201
filed a separate answer to said cross-complaint. The opportunity to plead estoppel was thus given to each of said appellants. "It may now be regarded as firmly settled that, as a general rule, a party who has an opportunity to plead an estoppel upon which his cause of action depends must do so" (10 Cal. Jur. 654). Upon his failure to do so the question cannot be considered (Placer Co.
v. Lake Tahoe Ry. Tr. Co.,
The appellant, the Fair Oaks Bank, had an opportunity to plead facts by way of estoppel in its answer to the cross-complaint, and having failed to make such plea is, in our opinion, precluded from proving said facts in any stage of the proceedings, either to controvert the allegations of respondent's answer to the complaint or in support of its answer to respondent's cross-complaint. Our attention has not been called to any direct authority in support of the conclusions to which we have arrived. On the other hand, we know of none prescribing a contrary rule. It seems, however, upon principle that from the well-established rule requiring an estoppel to be pleaded in case there is an opportunity to do so, otherwise no proof thereof will be permitted, there can be no escape from the above conclusion.
We are unable to agree with the assertion that the cross-complaint was unnecessary as between the parties to this action. It is true that the same facts substantially are set up therein as were alleged in respondent's answer to the complaint. Had the action been confined simply to the foreclosure of the mortgage, and had judgment therein been rendered in favor of the respondent, said judgment could have provided only that the plaintiff in said action take nothing. It could not have been decreed in said action that said mortgage be delivered up and canceled. The mortgage was on record as a lien against respondent's real property and he was entitled, if the same had been procured by fraud and misrepresentation, to have the same surrendered up and canceled of record. This relief could only be obtained by *203 him either by an independent action brought for that purpose, or, in case action had been brought to foreclose the mortgage, by the filing of a cross-complaint asking for the same relief.
There is another consideration, however, which in our opinion leads to the conclusion that the judgment should be affirmed. Even if we assume that the plaintiff had the right to rely upon estoppel, yet, as the trial court found the allegations of respondent's answer to the complaint and his cross-complaint to be true, we think this was at least an implied finding that the facts relied upon by appellant as an estoppel were not true. As we have already seen, the effect of an estoppel is to prevent the party against whom it is invoked from proving the truth of the matter upon which he relies. In this action the facts relied upon as an estoppel, if proven to the satisfaction of the trial court, would have prevented the respondent from proving the false and fraudulent statements, which he claimed were made to him by the defendant Slocum, as a defense to plaintiff's action to foreclose said mortgage. The record shows that the action was tried upon the theory that it was not necessary to plead the facts relied upon by plaintiff as an estoppel and that such estoppel was in issue. When the court, therefore, found that the allegations of respondent's answer and cross-complaint were true, it must have necessarily passed upon the issue of estoppel, and, by finding in favor of respondent, impliedly found against the appellant upon said issue of estoppel. An express finding, therefore, upon such issue was not necessary under the circumstances of this particular case.
The judgment is affirmed.
Shenk, J., Richards, J., Waste, C.J., Seawell, J., Lawlor, J., and Lennon, J., concurred.
Rehearing denied. *204