38 Ind. 323 | Ind. | 1871
The appellees sued John W. Canan and the appellants, who are executors of the will of George W. Clippinger, deceased, on two promissory notes made by Canan to Clippinger, dated November 20th, 1869, one at sixty and the other at ninety days, payable at Harrison’s Bank, with interest and attorneys’ fees, if suit should be instituted on them, and which notes were indorsed by Clippinger to the appellees. A separate action had been commenced on each note, but as they were consolidated by agreement, and a
Canan made default. The executors of Clippinger answered, first, the general denial; second, that their testator indorsed the notes for the accommodation of Canan, as renewals of certain other promissory notes of Canan, before that time held by the plaintiffs; that at the time said notes were so indorsed by the deceased to the plaintiffs, they held a mortgage from Canan as security for the payment of said other promissory notes and any renewals thereof; that the plaintiffs agreed with their testator, before or at the time of said indorsement, that if he would so indorse said notes, they would hold said mortgage, and it should stand as an indemnity to him against liability as such indorser; that he indorsed said notes on the faith of said agreement, and in consideration thereof; that said mortgage has, by the wilful and gross neglect and misfeasance of the plaintiffs, without the fault or privity of their testator, or of them, ceased to be of any value as a security in the hands of the plaintiffs, or as an indemnity to the testator, or to them; that said Canan has become insolvent; by reason of which their testator and they are discharged, etc.; third, that said notes were made by Canan as renewals of certain promissory notes held by the plaintiffs for money loaned by them to Canan on his individual credit; that the plaintiffs held a mortgage of personal property from Canan, as security for the payment of said last named notes and any renewals thereof, the mortgage bearing date, and having been executed and acknowledged on the 2d day of January, 1869, and has ever since remained in the possession of the plaintiffs, the property mentioned in the mortgage having been left by the plaintiffs in the possession of Canan; that the mortgage was recorded January 15th, 1869, and that a copy of it is filed with the complaint; that on the 20th day of November, 1869, plaintiffs and Canan procured and induced their testator to indorse said notes in suit, for the accommodation of Canan, by means of him,, said Canan, and
“I hereby acknowledge that George W. Clippinger has this day become an accommodation indorser for me upon two notes for three thousand dollars each, dated November 20th, 1869, due respectively sixty and ninety days after date, given by me to A. and J. C. S. Harrison, in renewal of six thousand dollars of the original debt secured' by this mortgage. Dated November 20th, 1869.
“J. W. Canan.”
And by-means of them, the said plaintiffs, in consideration of such indorsements, entering upon the back of said mortgage a memorandum in writing, as follows:
“We hereby acknowledge that this mortgage stands as ah indemnity, so far as the same is now a subsisting security, to George W. Clippinger, for his indorsement to us of two notes made by J. W. Canan for three thousand dollars each, dated November 20th, 1869, due respectively sixty and ninety days after date, subject, however, to any priority, if such there be in law, to any other parties who may have become bound on any ¡renewals of any part of the original debt secured by said mortgage, or to the ratable interest, if any, of such parties in said mortgage. Dated this 20th of November, 1869. A. & J. C. S. Harrison.”
That the plaintiffs did, then and there, with an intent to defraud and take an undue advantage of said testator, withhold from him their knowledge of the fact that they had not had said mortgage recorded in the recorder’s office of Marion county, Indiana, within ten days after it had been executed to them by said Canan, and did then and there permit their testator to rest in and act upon the belief that said mortgage would be an indemnity to him in any event whatever against the liability he was about to assume upon the faith and credit thereof, and upon the faith and credit of the memorandum which they had entered upon the back thereof, and
The second and third paragraphs of the answer having been held good on demurrer thereto by the plaintiffs, they replied in seven paragraphs, to wit:
First. A general denial of the second and third paragraphs thereof. '
Second. For further reply to the second paragraph of the answer, that the mortgage was not held as a security for the notes, in renewal of which the notes in suit were given, or any of them, but was held as security for the payment of other notes and renewals thereof held by them; that Clippinger was liable, and holden to them, on the notes, in renewal of which the notes sued on were given as surety of Canan, which Clippinger believed he would have to pay, at the time .of said indorsement, and, to secure himself, as far as possible, and fearing to take a mortgage direct from Canan, and hoping to avoid the effect of the United States bankrupt law, he procured Canan to make said memorandum
Fourth. For further reply to said second paragraph, that the mortgage was not recorded in the proper office within ten days after its execution, as the law requires, which fact was known to Clippinger at the time he indorsed said notes, and the rights of other creditors of Canan had attached, whereby said mortgage had become of no effect at and before the time when said endorsements were made thereon.
Sixth. For further reply to the third paragraph of the answer, that the mortgage was not held as a security for the notes, in renewal of which the notes sued on were given, but was held as security for other notes of Canan, indorsed by Clippinger,-not connected with these notes; that Clippinger was liable to them on the notes, in renewal of which these notes were given, and he believing that he would have to pay the same, and to secure himself from loss, and avoid the operation of the bankrupt law, procured (Sanan to make said
Seventh. For further reply to said third paragraph, that said mortgage was not recorded at the date of said indorsements, and has never been recorded; and before said indorsements, the rights of other creditors of said Canan had intervened and attached to said mortgaged goods, and the said mortgage had become of no force or effect.
The defendants, the executors, demurred separately to all of the paragraphs of the reply, because they did not state facts sufficient, and the demurrers to the third and fifth paragraphs were sustained, and those to the other paragraphs were overruled. The third and fifth paragraphs of the reply are, therefore, not copied in this opinion.
There was a trial by the court; findingforthe plaintiffs; motion for a new trial overruled; and final judgment for the plaintiffs.
The first four errors assigned relate to the correctness of the court’s action in overruling the demurrers to the second, fourth, sixth, and seventh paragraphs of the reply. The second and fourth paragraphs of the reply are to the second paragraph of the answer. We must, therefore, examine the sufficiency of that paragraph of the answer; for if it was not good, then the demurrer was properly decided against the
We think the sixth paragraph of the reply, which was directed to the third paragraph of the answer, was good. It meets, by way of traverse or by new matter, all the material allegations of the third paragraph of the answer.
It is immaterial whether the seventh paragraph of the reply was good or bad. It only asserts a fact which was already
The only other error complained of is the refusal of the court to grant a new trial on the motion of the defendants.
The reasons-assigned for a new trial were as follows:
“First. For error of law occurring at the trial and excepted to by appellants, and which worked accident and surprise to the appellants, which ordinary prudence .could not have guarded against, in this, that is to say, that the appellants put the appellee, John C. S. Harrison, upon the stand as their witness (they having first asked the court if the said witness would be permitted to testify, in his cross examination, to any matters except such as were necessarily called 'out by his answer to such questions as should be asked him in the examination in chief, and received from the court a negative answer), and thereupon asked said witness the following questions in the examination in chief and no other, as bearing solely upon their defence .as specially pleaded and set forth in the second and third paragraphs of their answer:
“ i. State whether or not ¡George W. Clippinger, the testator, indorsed the notes in suit to your firm for the accommodation of, and as surety for, the defendant John W. Canan?
“2. State whether or not John W. Canan executed, acknowledged, and delivered to your firm a mortgage on the personal property in the Spencer House, at Indianapolis, on the 2d day of January, 1869?
“3. State, if you can., the name of the attorney who drew that mortgage?
• “4. State whether or not the notes representing the debt covered by that mortgage were promptly paid or renewed at maturity?
“5. State who, if any one, were indorsers on any renewals of those notes, at the time the notes here sued on came to your possession?
“7. Will you please produce it to the court?
“8. Please state, if you can, whose signature this is under the first memorandum written upon the back of the mortgage.
“ 9. Please state whether or not this memorandum was . signed by him with your knowledge or consent.
“ 10. State whether or not it was signed before the indorsement to your firm by George W. Clippinger of the notes now here sued on, and as a part of that transaction.
“11. State whether or'not the notes spoken of in this memorandum are the same notes you here sue on.
“ 12. State, if you can, whose signature this is under the other memorandum written upon the back of the mortgage.
“13. State whether or not it was signed by you before the indorsement to your firm, by George W. Clippinger, of the notes here sued on, and as a part of that transaction.
“ 14. State whether or not the notes described in this memorandum are the same notes you here sue on.
“15. State, if you can, to what ‘other parties,’ and what ‘renewals,’ reference is had toward the close of this memorandum, if any.
“ 16. State whether or not you obtained a judgment on the note you have designated as the Guetig and Roos note against John W. Canan, Henry Guetig, and Jacob Roos, on the 12th day of January, 1870, in this court.
“ Whereupon the court, upon the cross examination of the said witness, John C. S. Harrison, by his own attorney, permitted said witness to give his testimony upon the matter which was entirely new, and which was in nowise gone into or called out by any of said questions asked by the appellants upon the examination in chief, and upon which the appellees rely in the second and sixth paragraphs of their reply, in avoidance of the defences so set forth and specially pleaded in the second, and third paragraphs of appellants’ answer; that, is to say, the said witness, although he had
“Second. For the reason that the judgment rendered by the court involved excessive damages and error in the assessment of the amount of recovery, in this, that whereas only a judgment for six thousand two hundred and fifty-seven dollars and sixteen cents, principal and interest of the notes sued on, and costs taxed at-dollars, should have been rendered against the appellants as executors of George W. Clippinger, an indorser of said notes, the court rendered a judgment against them for six thousand five hundred and sixty-nine dollars and ten cents, having added to the principal and interest of said notes the sum of three hundred and twelve dollars, attorney’s fees.
“Third. For error of the court in admitting, over the objection and exception of the appellants, the testimony of John C. S. Harrison, John D. Howland, Israel Taylor, Samuel W. Watson, and John W. Canan, byway of varying and contradicting the terms of the two acknowledgments in writing upon the back of the mortgage signed by said John W. Canan, and the said appellees, by their firm name of A. & J. C. S. Plarrison, the said mortgage with said written acknowledgment having already been produced and proved by the appellants.
“Fourth, fifth, and sixth. That the decision of the court is not sustained by sufficient evidence, and is contrary to law.
Seventh. For error of the court, in admitting (over the objection of the appellants) the testimony of John D. How-land, a witness for appellees, touching conversations between himself and Hammond, which took place before, and not at, the time of the signing by John W. Canan and the appellees
“Eighth. For error of the court in admitting, over the objection and exception of the appellants, the testimony of Israel Taylor as to what Harrison said to Hammond about the mortgage, in order to vary or contradict the engagements shown by the written acknowledgments signed by Harrison upon the mortgage, the said witness not testifying that it was said at the time of the signing by Harrison of the written acknowledgment, but testifying that he did not see Harrison sign the said written acknowledgment.
“Ninth. For error of the court in admitting, over the objection and exception of the appellants, the testimony of John C. S. Harrison, touching anything he said to Hammond, and any conversation between himself and Hammond before, and not at, the time of the signing by him of the-acknowledgment in writing produced and proved, in order to vary or contradict the engagements shown by such acknowledgment in writing.”
The first reason for a new trial is based on the alleged violation by the court of an agreement previously entered into with counsel for the defendants, concerning the extent to which the witness Harrison should be allowed to go in testifying on cross examination, or as a witness for the plaintiffs, when he should be put on the stand as a witness for the defendants. It is not claimed that the plaintiffs or their attorneys were parties to this agreement. As a rule, it is not proper for the court to state or agree beforehand what it will or will not decide at some subsequent stage of the cause, but it should leave counsel to decide for themselves what course they will pursue in the presentation of the facts of the case, or other steps to be taken, and decide questions when they are presented in their regular order. We find, however, upon an examination of the bill of exceptions, no such agreement. A party examined by his ad
The second reason for a new trial is based on the idea that .attorney’s fees could not be allowed as part of the damages to which the plaintiffs were entitled. The following expresses the position assumed by counsel for the appellants on this point in the case:
“Upon this feature of the case, we desire only to say that, so far as the words, ‘ and attorney’s fees if suit be instituted on this note,’ in the notes sued on, are concerned, they do not import a promise to pay a sum certain absolutely, and at , all events, but are so controlled by a contingency—by something so entirely extrinsic—that if they do not destroy the mogotiable quality of the notes altogether, the notes are, at least, not negotiable to the extent of any additional obligation that could be imposed by such words.”
This question has been several times considered by this .•court, and we see no reason in the argument before us to • change our rulings. The promise in the notes was to pay a .sum certain, and if that certain sum. had been paid according to promise, there would have been no question about the . attorney’s fees; that stipulation in the note becomes available only after and in consequence of the dishonor of the \^note by non-payment.
The third reason is, that the court admitted parol evidence to vary and contradict the terms of the indorsements on the mortgage, one of which was signed by >Canan, and the other by the plaintiffs. There is no good ¡ground for this position. The indorsement of Canan says
The seventh, eighth, and ninth reasons for a new trial are of the same nature. Hammond was acting in the matter as the attorney of Clippinger; Howland was acting, as the attorney of the plaintiffs; Canan was a party to the negotiations, and they all participated, as did one or both of the plaintiffs, in the conversations preceding and attending the transaction of the business and the signing of the papers, and their statements were properly admitted to show the attending circumstances, and, among these, whether the preceding notes were part of the debt secured by the mortgage, whether Clippinger knew that the mortgage had not been recorded, and the consideration and agreement on which the indorsements were made on the mortgage.
The other reasons for a new trial call in question the sufficiency of the evidence to justify the finding of the court. It was alleged by the. defendants, in their answer, that Canan alone washable on the notes for the debts, In renewal of which the notes in suit were given to the plaintiffs. But the evidence clearly shows that this allegation was untrue. There is nothing to the contrary of what is testified on this subject by J. C. S. Harrison and Canan, who each testified that . the notes in suit were renewals of notes on which Clippinger was the security of Canan for the same amounts. It was.alsp alleged in the answer that the debts,, in renewal of which the
Then it was alleged in the answer that the plaintiffs concealed from Clippinger the fact that the mortgage had not been recorded in time, and was, therefore, invalid as to third parties. The evidence shows that this fact was known to Clippinger. He could hardly have failed to know it, if it had not been told to him, from the examinations of the mortgage which he must be presumed to have made while negotiating for the making of the indorsements on it, and at the time when they were made. It would be a singular circumstance out of which to manufacture a charge of fraud, as the public records, upon examination, would, at once, show the truth of the matter, if the party did not have access to the original and the usual indorsements on it, which the law' requires the officer to make. But we need not further examine the evidence. When the defendants failed to prove facts so essential in their case, it is difficult to see how it can be maintained that there should have been a finding in their favor.
There is a legal question involved in the case which is not discussed, and that is, whether the indorsement by the plaintiffs on the mortgage could, in any event, vest in Clippinger any right under the mortgage. The mortgage was executed to secure the payment of claims in which Clippinger had no sort of interest, either as payee, indorser, or surety. Neither the notes mentioned in the mortgage, which it was given to secure, nor any interest in them was assigned to him. He held none of the paper secured by the mortgage, nor was he indorser or surety on any such paper, so that he could claim under the mortgage for indemnity or reimbursement directly or by subrogation. The assignment of a mortgage, independent of the debt which it
The court committed no error in refusing to grant a new trial.
The judgment is affirmed, with costs.