Lawler v. Jennings

18 Utah 35 | Utah | 1898

Minek, J.:

In 1892, the Gfrizzley Mining Company, a corporation, purchased from the plaintiff certain mining claims for the sum of |39,000. A portion of the purchase price was secured to plaintiff by notes of the company endorsed by the stockholders of which defendant Isaac Jennings was one. After such notes were given the company made payments upon the interest and principal from time to time, and when the old notes matured new notes with like endorsers were given, and the old notes were cancelled. On November 24th, 1894, the indebtedness of the company to the plaintiff was taken up and each stockholder secured or paid the plaintiff his proportionate share of the company’s indebtedness. The note and mortgage sued upon in this case was given plaintiff by defendant Jennings, for the purpose of paying his share of the indebtedness due from the company to the plaintiff, according to the amount of stock held by him.

During the transaction between the company-and the plaintiff, and prior to the giving of the note and mortgage sued upon, about October, 1893, the plaintiff, by mistake of all the parties, was overpaid by the Grizzley Mining Company, by the giving of the said notes, and by payments made, to the amount of $1,000, and this mutual mistake was not discovered by any of said parties or by the Grizzley Mining Company, until the spring of 1896. In June, 1897, the Grizzley Mining Company, after the discovery of the mistake, and for a valuable consideration, assigned to defendant Jennings, its claim against the plaintiff for said amount so overpaid to the amount of $1,000. In this action to foreclose said mortgage defendant Jennings interposed as a defense, by way of a counterclaim, the said claim so overpaid and assigned to him, and prays judgment for such amount with interest from November 24, 1894.

The trial court found as a conclusion of law that the claim of said sum of $1000, which was overpaid to the plaintiff by the Grizzley Mining Company by mutual mistake, and assigned to defendant, was, and is not an assignable thing in action, and for that reason defendant Jennings was not entitled to an offset of the same. This finding is assigned as erroneous.

Respondent contends that appellant is not entitled to recover on the counterclaim set forth in the answer under Sec. 3227 C. L. U. 1888, and that a mere right to assail a settlement of the assignor for fraud or mistake of which be bad made no complaint, is not an assignable cbose in action.

As will be seen from a statement of tbe case this contention does not involve the question of any fraud on tbe part of either party. Tbe question is whether, tbe defendant a stockholder and assignee of tbe company can maintain this counterclaim and recover as against tbe mortgage tbe sum of $1000, which tbe court found was overpaid to plaintiff by mutual mistake of all parties, when such mistake was discovered before tbe assignment to tbe defendant in tbe forepart of tbe year 1896, and sought to be recovered in this action December, 1897.

It appears that tbe Grizzley Mining Company was indebted to the plaintiff. Tbe defendant was a stockholder in the Grizzley Mining Company. For tbe purpose of paying that indebtedness each stockholder paid, or secured to tbe plaintiff, bis proportionate share of that indebtedness in proportion to tbe amount of tbe stock held by them respectively. Payments had previously been made to tbe plaintiff by tbe company from time to time upon tbe original indebtedness. "When tbe present note and mortgage were executed, defendant was informed that tbe plaintiff’s claim amounted to a certain sum, and that bis share thereof would be $3,777, whereupon this mortgage was given in payment. It was subsequently discovered that according to tbe boobs, tbe plaintiff bad been overpaid, by mistake of all tbe parties, in the sum of $1,000. When the stockholders paid or secured their proportionate share of tbe company’s indebtedness they jointly overpaid tbe plaintiff tbe sum of $1,000. Tbe combined indebtedness of tbe company, assumed and agreed to be paid by tbe stockholders, was $1,000 less than was actually paid by them. When tbe defendant executed tbe mortgage and paid his share of the company’s indebtedness by consent of the plaintiff, he executed it for a sum considerable in excess of what it was agreed he should have paid, had the whole truth been known at the time. The company learned of this mistake shortly after the settlement. The defendant was directly inter-' ested in having a portion of that sum refunded. At this time $1,000 was actually due to the company from the plaintiff as shown by the books. That claim was regularly assigned to the defendant, and there is no question about the amount being correct, so far as appears from the findings. Under such circumstances the account was properly assignable to the defendant who should have been allowed a credit for the same, under his counterclaim, as a set-off to the plaintiff’s claim on the mortgage. Sec. 3227' C. L. U. 1888.

When the defendant and his co-stockholders assumed and paid the company’s indebtedness to the plaintiff, they agreed to pay the actual sum due, and they paid $1,000 more than was due. Each stockholder, including the defendant and the company were directly interested in the sum to be paid. The stockholders were endorsers on the note for the company. The debt was their obligation. The defendant was individually liable for the whole sum due the plaintiff, as endorser, before he paid his share by the execution of the note and mortgage. The claim was not stale. It was not based upon an account stated. The mutual mistake was discovered shortly after the amount was paid. There was no fraud involved in the mistake, and no waiver of the mistake appears.

Under such circumstances the rule as laid down in Cross v. Sacramento Sav. Bank, 66 Cal. 462, relied upon by respondent, does not apply.

While the practice of opening accounts, which the parties themselves have adjusted, upon doubtful testimony at tbe instance of an assignee is considered dangerous, yet, if palpable errors are shown, errors which can not be misunderstood, the settlement must so far be considered as made upon absolute mistake or imposition, and ought not to be obligatory upon the injured party or his representatives, because such items cannot be supposed to have received his assent. Chappedelaine v. Decheneaux, 4 Cranch. 306.

Under the statutes of Utah the assignee could bring this action in his own name. Sec. 2903, Rev. Stat.: Sec. 2920 Id.

As a general rule all choses in action and all rights of action arising out of contract, may be assigned. The general test applied in determining the assignability of a chose in action is whether or not it would survive and pass to the personal representative of a decedent. If it would so survive, it may be assigned so as to pass an interest to the assignee which he can enforce in his own name; if it does not so survive, it is not assignable either at law or in equity. Pomeroy’s Rem. Rights and Rem. Secs. 146, 147, 792; 2 Am. & Eng. Ency. of Law, (2d Ed.) p. 1016-17-20; 18 Mich. 218; Crocker v. Whitney, 10 Mass. 316.

We are of the opinion that this claim was assignable, and that the sum of #1,000, found overpaid to the plaintiff by mutual mistake of the parties, with interest thereon from Nov. 24, 1894, should have been allowed the defendant under his counterclaim.

The case is remanded to the district court with directions to modify the conclusions of law and decree in accordance with this opinion, and to enter decree accordingly. The appellant should recover costs.

Zane, C. J., and Bartci-i, J., concur.