Albergo v. Gigliotti

• Decision Date: 12 December 1938
• Docket Number: 5971
• Citation: 85 P.2d 107,96 Utah 170
• Court: Utah Supreme Court
• Parties: ALBERGO v. GIGLIOTTI et al

85 P.2d 107

96 Utah 170

ALBERGO v. GIGLIOTTI et al

No. 5971

Supreme Court of Utah

December 12, 1938

Appeal from District Court, Seventh District, Carbon County; George Christensen, Judge.

Action by Leopoldo Albergo against Felice W. Gigliotti and others on a note and for foreclosure of mortgage securing the note and for judgment that interests claimed by defendants were without legal validity, wherein defendant Rosario Gigliotti filed a counterclaim and cross-complaint.

From the judgment, the defendants Felice W. Gigliotti and others appeal, and plaintiff filed cross-appeal as to a portion of the judgment.

JUDGMENT AFFIRMED, except as to portion as to which the plaintiff filed cross-appeal, and that portion of the judgment reversed.

Harley W. Gustin, of Salt Lake City, for appellants.

Marl D Gibson, of Price, and B. W. Dalton, of Los Angeles, Cal., for respondents.

FOLLAND Chief Justice. HANSON and LARSON, JJ., MOFFAT, Justice WOLFE, Justice, concurring.

OPINION

FOLLAND, Chief Justice.

This case is heard on appeal and cross-appeal from a judgment of the District Court of Carbon County in an action on a note and mortgage for foreclosure and sale and for judgment that the interests claimed by defendants are without legal validity. The court gave judgment for the plaintiff except for holding that the plaintiff must repay to Rosario Gigliotti the amount the Gigliottis paid the county for its deed, before his title be declared void as against plaintiff. Plaintiff filed a cross-appeal as to the latter portion of the judgment.

Plaintiff's cause of action is based on a negotiable note for $ 6,000, dated August 22, 1927, payable five years after date, and a mortgage for the same date given to secure it. Payments of principal and interest were made from time to time, but at the time of suit there were owing $ 5,685.45 principal and $ 1,032.42 interest, the last payment being dated June 2, 1936. Felice W. and Maria Gigliotti were the makers of the note and the mortgage. The mortgage, which recited the note it secured, was duly recorded on August 25, 1927. By its terms the mortgagors agreed "to pay all taxes and assessments on said premises * * * and in case of suit to foreclose, to pay all court and other costs and a reasonable attorney's fee." On August 31, 1931, the mortgagors entered into an agreement of sale with Rosario (or Ross) Gigliotti, who is a defendant, which agreement provided that Rosario should "be liable for that certain mortgage" above referred to and "the parties hereto jointly and severally agree to pay all taxes and assessments for public improvements, share and share alike." This agreement was recorded by Rosario Gigliotti. The 1931 taxes were not paid and the tax certificate was bought by the county which on January 3, 1936, received the auditor's tax deed. On July 17, 1936, the county conveyed its title by quit-claim deed, reciting that it was a sale and not a redemption to Maria, Felice W., and Rosario Gigliotti, and on July 28, 1936, Felice W. and Maria Gigliotti quitclaimed the property to Rosario. At the time the Gigliottis bought the county's title the plaintiff had sent to the county commissioners a certified check in sufficient amount to redeem the property. Defendant Rosario claims clear title under these quitclaim deeds; plaintiff contends that in making the purchase from the county defendants were only paying the taxes as they were bound to do and that they took no title for themselves thereby and that Rosario Gigliotti took none independently.

In his complaint, plaintiff alleges execution and delivery to plaintiff of the note and mortgage, setting out the note and attaching a copy of the mortgage; that certain sums as set out have been paid on principal and interest and "that there is now due and owing to the plaintiff by Felice W. Gigliotti and Maria Gigliotti on said promissory note" a principal sum and interest specified; that demand has been made and payment refused. Plaintiff prays judgment for the sum alleged, with interest, for judgment that defendants have no title, for a lien against the property and foreclosure in the usual form.

Defendants demurred, then answered--Felice W. and Maria Gigliotti entering a general denial, and Rosario Gigliotti setting forth his tax title and claiming title as against plaintiff and the other defendants, denying generally plaintiff's allegations on the note and mortgage.

In reply plaintiff set out the agreement of sale between the Gigliottis, alleged that their purported purchase from the county was a redemption, and also alleged fraud and conspiracy in trying to defeat plaintiff's title and in purchasing from the county and making the quitclaim deed to Rosario.

At the trial, the parties stipulated the making, executing and delivering of the note and mortgage, the payments as set out by plaintiff and that $ 750 is a reasonable attorney's fee for plaintiff's attorney. The note and mortgage were not produced at the trial or introduced in evidence. The only important conflict in the evidence was as to the knowledge and intent of the parties and county officials when the county sold to the three Gigliottis.

The court found the plaintiff entitled to judgment on the note and foreclosure of the mortgage; that defendants took no title for themselves by their deed from the county but only paid the taxes as they were required to do; that defendants had acted fraudulently in procuring the deed from the county and any rights acquired thereby were inferior to plaintiff's mortgage; that Rosario Gigliotti put up the money for which the county issued the quitclaim deed and that plaintiff must repay this amount with interest before the judgment should be entered.

The parties by assignments of error on the appeal and cross-appeal have raised five principal questions:

(1) Defendants' demurrer should have been sustained because plaintiff did not allege directly that he was the holder or owner of the note sued on.

(2) Judgment for plaintiff was erroneous because plaintiff did not produce the note and mortgage at the trial, which was necessary to support the judgment.

(3) Rosario Gigliotti did not, by entering into the agreement of sale with his parents in 1931, preclude himself from purchasing the property from Carbon County after expiration of the period of redemption from tax sale.

(4) Defendants did not practice fraud upon the plaintiff.

(5) If judgment be for plaintiff, then it was proper for the court to require payment of the money advanced by Rosario Gigliotti for the deed from Carbon County before entering the judgment.

All the questions are stated from the point of view of the appellant and will be considered in order.

1. Respondent contends that the demurrer was properly overruled and that the complaint sufficiently alleged ownership of the notes for the reason that (a) when the payee of a promissory note is plaintiff and alleges execution of the note and delivery to him, it is presumed that he retained ownership; and (b) it was a necessary implication of paragraph nine of the complaint that plaintiff was the holder and the owner. The general rule is admitted to be as appellants state it, viz., that in an action on a promissory note plaintiff must allege that he is the holder or owner of the note. It has been almost unanimously held in other jurisdictions, and we so hold here, that when the payee of a promissory note alleges due making and execution of the note and delivery of the note to him, and the allegations of the complaint do not show transfer, assignment or endorsement by the payee, it is presumed that the payee is the holder or owner and a demurrer interposed on this ground will be overruled. Berry v. Barton, 12 Okla. 221, 71 P. 1074, 1083, 66 L.R.A. 513; Burling v. Stinnett, 46 Okla. 159, 148 P. 140; First Nat'l Bank v. Lutz, 28 N.M. 615, 216 P. 505; Van Marel v. Watson, 28 Ariz. 32, 235 P. 144, 145; Dysert v. Weaver, 46 Cal.App. 576, 577, 578, 189 P. 492; Phillips v. Oppenheim, 125 Okla. 181, 256 P. 352; Oulvey v. Converse, 326 Ill. 226, 228, 157 N.E. 245; Peters v. Hubb Diggs Co., Tex. Civ. App., 35 S.W.2d 449; Marvick v. Knight, 51 S.D. 151, 212 N.W. 866; Thompson v. Johnson, 202 N.C. 817, 164 S.E. 357; Barton v. Pochyla, Tex. Civ. App., 243 S.W. 785, 787; Gibson v. Hannay, 198 Iowa 930, 934, 200 N.W. 579; Union Guano Co. v. Garrison, 130 S.C. 404, 407, 126 S.E. 133.

Appellants rely on three cases as holding to the contrary. In Matteson v. Trask, 63 Mont. 160, 206 P. 428, the action was not brought by a payee. In Young v. Bray, 54 Mont. 415, 170 P. 1044, the action was by the payee, but was not against the maker--it was against an alleged converter of the chattel securing the note and the court did not know whether plaintiff's theory was for conversion, on the note, or implied assumpsit. In J. I. Case Threshing Mach. Co. v. Simpson, 54 Mont. 316, 170 P. 12, the action was by the payee against the maker and the court held that a demurrer should have been sustained because the complaint failed to allege plaintiff's interest in the note sued on. But the case is not authority for appellant's position here, as is revealed by the court's opinion in that case:

"The complaint does not allege that the notes were made, executed or delivered to the plaintiff, or that plaintiff is the owner or holder thereof, or that the amount due upon the indebtedness is due to the plaintiff. Section 6573, Rev Codes. Indeed, it would seem that the complaint was drawn adroitly to avoid any direct allegation that plaintiff has an interest in the notes sufficient to warrant it in maintaining the action. * * * It was not absolutely necessary for plaintiff to allege that it was the owner of the notes at the time suit was commenced. * * *...