Baxter v. National Mortg. Loan Co., 29132.

CourtSupreme Court of Nebraska
Writing for the CourtEBERLY, Justice.
Citation259 N.W. 630,128 Neb. 537
PartiesBAXTER v. NATIONAL MORTGAGE LOAN CO.
Docket Number29132.
Decision Date16 March 1935

259 N.W. 630

128 Neb. 537

BAXTER
v.
NATIONAL MORTGAGE LOAN CO.

No. 29132.

Supreme Court of Nebraska.

March 16, 1935


[259 N.W. 631]

Syllabus by the Court.

1. In this state the statute of limitations is a statute of repose; it prevents recovery [128 Neb. 538] on stale demands. If the petition in an action sets forth facts which show upon its face that it is barred by statute, and in avoidance thereof further facts are alleged to remove the bar of the statute, all of which are positively denied by the answer, together with the added allegation that the cause of action is barred by the statute of limitations, the plaintiff cannot recover without first establishing the facts so alleged in avoidance.

2. Where the petition of a plaintiff who has slumbered long upon his rights shows apparent laches on its face, the suitor must generally account for and excuse his delay by proper allegations in his pleading, and must support such allegations by proof.

3. When suit is brought within the time fixed by the analogous statute of limitations, the burden is on the defendant to show the existence of circumstances amounting to laches. When the suit is brought after the statutory time, plaintiff must plead and prove that laches does not exist.

4. When the principal is informed of what has been done by his agent, he must dissent, and give notice of it within a reasonable time; and if he does not, his assent and ratification will be presumed.

5. Evidence admitted without express reservations limiting it to a particular purpose may be considered for any purpose for which it is relevant and competent.

6. Where a borrower leaves the proceeds of a loan to his credit with the lender and authorizes the borrower's agent to receive, withdraw and disburse the proceeds of such loan, the responsibility of the lender ends with the withdrawal of such proceeds by the agent. The lender is not required to see that such funds are properly applied or accounted for by such agent, nor is he responsible for the agent's fraud or peculation, in the absence of knowledge of facts putting him on inquiry.

7. One is charged with knowledge of all facts where he is advised of facts sufficient to put an ordinarily prudent person on inquiry, and where, had inquiry been made, he would have had the actual knowledge of such facts.

8. Evidence examined, and held to fairly establish that plaintiff was guilty of laches in the transaction in suit to such a degree as to preclude recovery by him.

Appeal from District Court, Lancaster County; Frost, Judge.

Action in equity by John W. Baxter against the National Mortgage Loan Company. Judgment for plaintiff, and defendant appeals.

Judgment reversed and cause dismissed.

ROSE, J., and LIVINGSTON, D. J., dissenting.

John C. Hartigan, of Fairbury, and Peterson & Devoe, of Lincoln, for appellant.

Stewart, Stewart & Whitworth, of Lincoln, for appellee.

Heard before GOSS, C. J., ROSE, GOOD, EBERLY, and DAY, JJ., and ELDRED and LIVINGSTON, District Judges.

EBERLY, Justice.

This is an appeal by the National Mortgage Loan Company, defendant in the district court for Lancaster county (and herein designated as " defendant" or " loan company" ), from a judgment entered therein in favor of plaintiff, John W. Baxter, for the sum of $72,620.24. The procedure below was an action in equity, and the cause is here for trial de novo.

In summarizing the allegations of the pleadings, it may be said that plaintiff's petition sets forth that the defendant on or about June 1, 1924, by fraud, secured the execution and delivery of a note for $55,000, secured by a real estate mortgage covering 4,000 acres owned by plaintiff in Pawnee county, Nebraska; that at said time plaintiff [259 N.W. 632] was fraudulently induced to sign the note and mortgage in blank, with authority to defendant to fill out the same in an amount not in excess of $9,000; that, in violation of such instruction, the note and mortgage securing the same were filled out by defendant in the sum of $55,000, which money was not received by plaintiff, and which note and mortgage were void; that on or about April 1, 1925, by falsely and fraudulently representing to the Federal Trust Company that plaintiff was indebted to defendant in the sum of $55,000 on the note and mortgage aforesaid, defendant caused such Federal Trust Company to pay to it from the proceeds of a loan made by such trust company on plaintiff's land more than $55,000 " in purported payment of the aforesaid note and mortgage and defendant has refused to account to plaintiff therefor; " and, further, that " defendant in the aforesaid transaction was represented by its secretary, one R. F. Ireland and plaintiff dealt with said Ireland as an officer and representative of defendant."

[128 Neb. 540] The present action was commenced on June 24, 1932, but in the fifth paragraph of plaintiff's petition the following is alleged:

" During all of the aforesaid time and until 1931 plaintiff was a resident of Connecticut and New York and was not in Nebraska except on a few occasions for short times and on such occasions he was not in Pawnee county, Nebraska Plaintiff at all times herein mentioned has been inexperienced in business matters and has been in poor health. Plaintiff did not discover the facts alleged in paragraphs 3 and 4 hereof and the aforesaid fraud of defendant or any evidence thereof until a short time before the filing of this action."

Defendant's answer contained the following:

" 1st. Alleges that the present cause of action of the plaintiff is barred by the statute of limitations.

2d. That the plaintiff has been guilty of gross laches and negligence in the assertion of his pretended claim and by reason thereof has no cause of action.

3d. The defendant denies each and every allegation in said petition contained."

By the fourth, fifth and sixth paragraphs of such answer it was alleged that the plaintiff employed Rolland F. Ireland " as his attorney-in-fact and as an attorney-at-law to represent the plaintiff in" obtaining " money by mortgage on the lands described in plaintiff's petition and other lands; " that pursuant to such employment by plaintiff there was obtained from defendant $55,000 on the mortgage signed by him on the lands described in plaintiff's petition, which was delivered to plaintiff, and that plaintiff had full notice and knowledge of the said mortgage in the fall of 1924, and fully approved and acquiesced in the same by himself and his authorized agent, received the proceeds thereof, and is estopped to deny same.

To this answer plaintiff filed a reply in the nature of a general denial.

Though the transcript fails to disclose that the plaintiff in any manner challenged the sufficiency of the answer in the trial court, it is now contended that the defendant has failed to properly plead the facts claimed to show that the [128 Neb. 541] cause of action was barred by the statute of limitations, and that mere conclusions are insufficient; that likewise the defendants failed to plead the facts claimed to show laches, and that mere conclusion is insufficient. In a proper case the rule contended for by plaintiff may be conceded. Thus in Pinkham v. Pinkham, 61 Neb. 336, 85 N.W. 285, cited by plaintiff, this court announced the rule: " A reply alleging that the defendant's counterclaim did not accrue within the period provided by law for asserting such claim, and containing no facts from which the conclusion is deduced, tenders no issue, and such allegation may be entirely disregarded."

However, it seems that in view of the doctrine announced in Scott v. De Graw, 90 Neb. 274, 133 N.W. 179, in the light of the facts presented by the present record, the principle announced in the Pinkham Case is not controlling. In the instant case the first four paragraphs of plaintiff's petition set forth a cause of action which accrued, if at all, " on or about April 1, 1925." In this condition the petition obviously failed to state a cause of action at the time it was filed on June 24, 1932, and it was essential for this purpose that there be added thereto allegations of fact which would show affirmatively that the statute of limitations had not run. Evidently for this purpose the pleader added to his petition paragraph 5, already quoted. By the general denial defendant took issue with the facts alleged in this paragraph, and to this he added the allegation covering the defense of the statute of limitations. While the sufficiency of the latter standing alone might be subject to challenge in connection with the issue formed by the general denial, it seems invulnerable to the attack now made.

In Scott v. De Graw, supra, we find an action on a note due December 11, 1901. The [259 N.W. 633] controlling fact was an indorsement of a payment of $6 thereon alleged to have been made on February 7, 1905. The action was begun on December 31, 1909. The allegation of payment was denied in the answer with the allegation that the action was barred. This court, in an opinion by Sedgwick, J., an [128 Neb. 542] nounced the rule, viz.:

" In this state the statute of limitations is a statute of repose. It prevents recovery on stale demands. If the petition in an action upon a promissory note sets out the note which shows upon its face that it is barred by the statute, and partial payments are also alleged in the petition which would remove the bar of the statute, and such payments are denied in the answer, with the allegation that the note is barred, the plaintiff cannot recover without evidence of such payments."

Unless the case last cited is now to be overruled, the fundamental reasoning approved therein is controlling on the question of the proper pleading of the statute of limitations in the instant case.

By parity of reasoning the question of the sufficiency of the pleading of the defense of laches...

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