6 Colo. App. 190 | Colo. Ct. App. | 1895
delivered the opinion of the court.
The allegations of the complaint are that on October 20, 1884, plaintiff George S. Redfield and one Warner made their promissory note to one T. C. Henry for $6,400, due five years from date, with interest payable semiannually at ten per cent per annum, and secured it by a deed of trust upon certain land owned by them; that after the giving of the note the plaintiff purchased from Warner his interest in the real estate, and assumed the payment of the trust deed; that the sole consideration of the note was a title to eight water rights, to be secured to the makers by The Fort Morgan Irrigation Company and the defendant, The Travelers Insurance Company, the water to be taken from the canal of the Irrigation Company, and used in the irrigation of their lands; that the Irrigation Company had contracted a bonded indebtedness of $60,000, secured by deed of trust upon all of its property, executed to Gustavus F. Davis, vice president of the Insurance Company, as trustee, and that this company was the owner of all the bonds so secured ; that by a provision in the trust deed the Irrigation Company was authorized to sell water rights, and the trustee might issue to the purchaser a release of those purchased by him from the lien of the trust deed; that Henry was the agent of the Insurance Company, and while he was the nominal payee of the note, the Insurance Company was the real party in interest, and
A demurrer to the second answer, on the ground of insufficiency, was sustained. No leave was taken to amend or plead further. Afterwards, pursuant to an order made by the court some time prior to the filing of the answer, the plaintiff filed a cross complaint, setting up the trust deed and note, and praying a decree of foreclosure.
Upon the assumption that the complaint is sufficient to authorize a decree of cancellation, the second answer states -a good defense. If its averments are true, the defendant was an innocent holder of the note. It advanced the money to Mr. Henry on the faith of its ownership by him. Whatever agreement the makers had with Henry, they invested him with the apparent title to the note, and if the defendant dealt with him in the belief that he owned it, it took the note unaffected by ány agreement between him and the makers. The answer also alleges that the plaintiff had been in the free and undisturbed use and enjoyment of the water rights for which he claims the note was given ever since their conveyance to him by the Irrigation Company. As shown by the record, the time between the conveyance and the filing of the answer was nearly seven years. If this averment is true, there can be no decree for cancellation or rescission in this action, because the complaint contains no offer to account or pay for the use which the plaintiff has had of the water rights. He who asks equity must do equity. The plaintiff cannot repudiate his contract and still retain the benefits which he has derived from it, and his desire to restore what he has received must appear in his complaint, or he has no standing in a court of equity.
The objections made in argument to this answer couple it with the first defense. Inconsistency between the two, and redundancy, are asserted. Neither of these is a ground of demurrer. The only ground for demurrer to an answer
But it is urged that by subsequently filing its cross complaint the defendant waived the error committed in sustaining the demurrer. We have no controversy with counsel’s general statement of the rule invoked. A party against whom a demurrer is sustained, by pleading over, precludes himself from complaining of the ruling on the demurrer. The right to further plead in such case is given by section 71 o£ the code, which provides that after a demurrer is decided the unsuccessful party may plead over, or amend, upon such terms as may be just, and within a time to be fixed by the court or judge. Therefore, to authorize a party to plead or amend, there must be ah order of the court prescribing the terms upon which the pleading may be filed, or the amendment made, and fixing the time within which it shall be done ; and the order comes after the ruling upon the demurrer. Upon the sustaining of this demurrer, no order relating to amendment or pleading was made, and none was asked. The cross complaint was filed in pursuance of an order made long prior to that time, and before the filing of anj'- answer in the case. It is not in the nature of a defense to the action at all. It is an independent proceeding by the defendant against the plaintiff for affirmative relief upon the trust deed, and in which the defendant is the real plaintiff, and the plaintiff the real defendant. In equity practice a defendant could obtain relief of that kind only bjr filing a cross bill; and while, under our code, such a bill passes under the general name of counterclaim, its characteristics and purposes are the same as under the practice in equity. It is not properly an answer. The decision upon the demurrer had nothing to do with the filing of the pleading in question. Under the order'permitting it, it could have been filed if the-demurrer
But there is another feature of the answer which requires attention. It contains a tender to the plaintiff of a release deed from the Supply Company to him for the eight water rights which he claims to have purchased. He states in his complaint that the note was given in consideration of title to these water rights, and bases his claim to relief upon the refusal of the defendant to execute its agreement with him, by investing him with title. It also appears from the complaint that the Supply Company was the absolute owner of the property, and could convey a perfect title. This being the conceded fact, if it is true, as alleged in the answer, that the plaintiff has had the constant and unmolested' use and enjoyment of that for which he contracted, he was bound to accept the deed, and there could be no cancellation. The policy of the law is to sustain contracts, not to destroy them; and if the withholding of the title resulted in no injury to the plaintiff in the intermediate time, the execution to him of a sufficient deed before final decree, giving him all that he purchased, placed him in the exact situation contemplated when the contract was made, and disentitled him to the relief praj^ed. Davidson v. Moss, 5 How. (Miss.) 673; Wickliffe v. Lee, 6 B. Monroe, 543; Hunt v. McConnell, 1 Mon. 219; Evans v. Bolling, 5 Ala. 550; Boyce v. Grundy, 3 Pet. 210; Ayers v. Mitchell, 3 Smed. & Mar. 683.
But we do not think that the allegations of the complaint are sufficient to sustain a decree of cancellation. It is not averred that the execution of the note and deed of trust was induced by any fraudulent representations or conduct on the part of the defendant. Nothing in the nature of mistake or accident is set forth. There is no allegation that after the execution of the instruments, the defendant, by conveyance to an innocent purchaser, or otherwise, put it out of its power to perform its contract; on the contrary, it is expressly and
We think, however, that the bill contains sufficient averments to entitle the plaintiff to specific performance, and that upon the establishment of the case which it states the court would be authorized to grant relief of that kind, provided the necessary parties were before it. The title to the property is alleged to be in The Fort Morgan Land & W ater ■Supply Company, which is not a party to this proceeding; and until it is made a party, and brought in, no adequate relief in this direction can be afforded. But the complaint, as it is, is answered by a tender of performance. The deed to which the plaintiff avers himself to be entitled is brought into court and offered to him. This obviates the necessity of a decree for performance. The contract should be adjudged performed, and the defendant, unless its money shall be paid, permitted to proceed to a foreclosure of its trust deed upon its cross complaint. The effect of the tender of the deed is to admit a cause of action in the plaintiff for specific performance, and the costs of the proceeding, down to the time of filing the answer, should therefore be adjudged against the defendant. The judgment is reversed and remanded with instructions to the court below to conduct any further proceedings in the case in accordance with this opinion.
• Reversed.