106 P. 660 | Utah | 1910
Tbis is an action for tbe foreclosure of a mortgage. From a judgment entered in favor of plaintiff, defendant appeals.
Tbe complaint recites that tbe mortgage was executed by defendant to secure tbe payment of her promissory note of even date therewith for tbe sum of $8421.28, and contains a prayer for a foreclosure and sale of tbe mortgaged property. Defendant in her amended answer admits tbe execution of tbe note and mortgage, but seeks to avoid their effect by alleging, among other things, that there was a contemporaneous and collateral oral agreement between plaintiff and defendant, in which plaintiff promised to accept in payment of tbe note and mortgage certain goods and merchandise as tbe same should be manufactured by tbe. Sam Levy Cigar Company, a corporation engaged in tbe manufacture and sale of cigars, and that said goods and merchandise were tendered to plaintiff as tbe same were manufactured by tbe cigar eom-pany mentioned, and that plaintiff refused to accept tbe same, and that be thereby violated tbe terms of tbe oral agreement referred to and rendered tbe Sam Levy Cigar Company, for whose benefit, it is claimed, tbe note and mortgage were given, financially unable to pay either tbe principal or interest of tbe note and mortgage.
Much evidence was introduced on the issue tendered by these allegations of the answer. Tbe court, in its sixth finding of fact, among other things, found “that- the said note and mortgage were executed and delivered by defendant to plaintiff and were received by plaintiff in good faith- and
The facts and circumstances leading up to and surrounding the execution of the note and mortgage, as disclosed by the record, are about as follows: On or about July 1, 1905, the Sam Levy .Cigar Company, a corporation engaged in the manufacture and sale of cigars in Salt Lake City, Utah,
Henry McCornick was called as a witness and interrogated by counsel for plaintiff concerning the transaction involving the $2500 advanced by the bank, and the terms and conditions, if any, upon which it was understood between him and Levy that the goods should be purchased in the East by Levy, and testified as follows: “Q. I want to be very brief about it. State whether or not it is a fact that you gave or loaned to Joe Levy $2500 for the purpose of going ■ East to buy goods, instructing him to> pay as little as possible, and get the goods back here leaving as much as possible to be due to the Eastern people from whom he bought. A. My recollection of the fact was, I think the account standing, $2500, $2700 overdrawn. Q. That is the Sam Levy Cigar Company— A. The Sam Levy Cigar Company had been trying for some time to get the matter straightened up, one way or the other. He came into the bank one morning and stated he needed $2500, or some such amount as that, but he wanted to buy more stock. Q. Now, did you arrange or agree with him, or instruct him in any manner, as to how he should buy goods, what he should do with the
It will be observed that Henry MoOornicb, notwithstanding counsel repeatedly called bis attention to tbe alleged understanding between him and Levy respecting tbe terms and conditions upon which goods should be purchased in tbe East with tbe $2500, as testified to by Levy, did not deny there was such an understanding. Tbe effect of bis testimony on this point is rather a corroboration than a contradiction of Levy’s testimony. Further, we think tbe subsequent transactions bad with reference to tbe goods, to which transactions plaintiff was a party, also tend to corroborate tbe evidence of Levy. When tbe goods arrived from tbe East, as many of them as could be disposed of were sold by Levy at reduced prices, and tbe money deposited in plaintiff’s.bank. Plaintiff did not permit any of this money to be used to pay tbe debts incurred by tbe cigar company in tbe purchase of tbe goods, and when these debts commenced falling due plaintiff and J. E. Levy, in order to put tbe goods beyond tbe reach of tbe creditors of the company, entered into an arrangement by which tbe goods were sold by Levy to an ostensible innocent purchaser, who took possession of them and continued tbe business in bis own name, tbe proceeds of which, less running expenses, be turned over to plaintiff. The transaction last referred to we shall hereafter refer to more in detail.
While in some of tbe subsequent transactions leading up to and culminating in tbe execution of tbe note and mortgage in issue a claim was made that Mrs. Levy could be held on her alleged guaranty, and while there are some expres
There is some controversy as to whether these transactions between Levy, Bass, and the bank were had on the advice of plaintiff and in pursuance of a plan outlined by him, or at the request of J. 3Ü. Levy. We think, however, it is unimportant which of the two conceived the idea and suggested the plan by which the goods were sold and turned over to Bass. The record shows that each of them fully understood all the facts and circumstances under which the sale was made to Bass and expected to be mutually benefited thereby. The chattel mortgage executed by Bass to plaintiff, so far as material here, recites as follows: “For the purpose of obtaining the above loan I (Bass) represent that I am lawfully possessed of the said property herein described, and that the same is free from all incumbrances and liens whatsoever.” Attached to the mortgage is the affidavit of the mortgagor and mortgagee, which reads as follows: “John Bass, mortgagor, and W. S. McCornick (plaintiff) mortgagee, being first duly sworn on their respective oaths, depose and say, each for himself, as follows: That he is a party to the within chattel mortgage, and that the same is made in good faith to secure the amount of indebtedness named therein and without any design to hinder or delay or. defraud the creditors of said mortgagor.” This affidavit was sworn to November 7, 1905. Counsel for plaintiff contend that, “as between the cigar company and Bass, the sale of the goods was a mere colorable one,” but, they insist, that plaintiff, in the part he took in the transaction with Levy, on the one hand, and Bass, on the other, acted in good faith. Let this be as it may, the fact remains, however, as shown by the record, that plaintiff not only knew all the facts and circumstances leading up to and surrounding the sale of the goods to Bass, but was a material and necessary factor in the transaction, and that, without his assistance, the sale would never have taken place. For the purposes of this appeal we will assume that, as to this particular transaction, plaintiff not only acted in perfect
It necessarily follows, from the facts and circumstances which we have briefly reviewed, that the creditors, by attaching the goods, would have made trouble for plaintiff, by involving him in a lawsuit, all of which, the record shows, he fully appreciated and was anxious to avoid. Levy testified that he informed plaintiff that, if the goods were not paid "for within a specified time, the cigar company would be
The undisputed evidence shows that Mrs. Levy was not a business woman, and had had but little, if any, experience in business matters; and that at the time she signed the note and mortgage she was under a nervous strain caused by the loss of her husband about a year before, and, according to her own testimony, which is not denied, she “was a physical wreck.” And furthermore, the evidence, without conflict, shows that she was ignorant of the fraudulent transactions hereinbefore mentioned, commencing with the arrangement made and entered into between Henry McOomick and JR. Levy, wherein the bank, according to the evidence of Levy,
We are of the opinion that the sixth finding of fact made by the trial court is not only unsupported by, but is contrary to, the evidence. The finding is as follows: “That the said
The judgment is reversed. In view of the indefiniteness of the allegations of defendant’s answer upon which she bases her defense, and because of which the plaintiff may have failed to introduce explanatory evidence, we have decided not to direct findings and judgment, but to reman*-1 the cause for a new trial, with directions to the lower court to permit the parties to amend, their -pleadings should they be so advised. Each party to pay his own costs on this appeal.