Berryman v. Dore

• Decision Date: 11 December 1926
• Citation: 43 Idaho 327,251 P. 757
• Parties: H. G. BERRYMAN, Administrator of the Estate of C. W. BERRYMAN, Deceased, Appellant, v. L. B. DORE and VIOLA D. DORE, Respondents
• Court: Idaho Supreme Court

251 P. 757

43 Idaho 327

H. G. BERRYMAN, Administrator of the Estate of C. W. BERRYMAN, Deceased, Appellant, v. L. B. DORE and VIOLA D. DORE, Respondents

Supreme Court of Idaho

December 11, 1926

TRIAL BY JURY-MARGINAL SATISFACTION OF MORTGAGE HELD MERELY RECEIPT-PAROL EVIDENCE ADMISSIBLE CONCERNING INTENT TO RELEASE NOTE-FRAUD MUST BE PLEADED-MORTGAGOR'S CONSENT TO RELEASE OF MORTGAGE-ERRONEOUS INSTRUCTIONS-EFFECT OF MORTGAGEE'S RELEASE WITHOUT CONSIDERATION-REFUSAL TO DIRECT VERDICT.

1. There being questions of fact to be submitted to the jury, it was not error for court to decline to try the case without a jury.

2. When release without consideration of mortgage securing note is with consent of mortgagor, action is maintainable on the note.

3. Certification stamped on margin of mortgage record, and signed by mortgagee, that mortgage and secured indebtedness was fully paid, satisfied and discharged, is not a contractual release or renunciation of rights, but a mere receipt, permitting parol evidence that payment was not made and that release of note was unintentional and by mistake.

4. To meet claim of plaintiff in action on note that by the words stamped on margin of mortgage record, and signed by him without consideration, "I hereby certify that this mortgage and the indebtedness secured hereby is fully paid satisfied and discharged," he did not intend to release note as well as mortgage, but that such release was unintentional and by mistake, and as bearing on his understanding of the recital, evidence that he had satisfied many other mortgages by marginal releases in which the same rubber stamp was used was admissible.

5. Fraud, to be available as a defense, must be pleaded.

6. As bearing on plaintiff's contention that his satisfaction without consideration of defendant's mortgage to him was with defendant's consent, entitling him to sue on the note secured, evidence of defendant's subsequently mortgaging the land to another, and selling the land clear of the mortgage to plaintiff, is competent.

7. Evidence being immaterial to the pleaded issues, motion to strike should be granted.

8. There being no issue of fraud or evidence to support estoppel, it is error to give instructions submitting such matters.

9. Instruction to find for defendant if plaintiff renounced in writing his rights on note sued on, and such renunciation was absolute and unconditional, was erroneous in not explaining that the release would not have that effect if the release of the note recited in the release of mortgage was, as claimed by plaintiff, unintentional and by mistake.

10. Where mortgagor consents to release without consideration of mortgage, he is personally liable on the note without any new promise of any kind to pay it.

11. There being material issues on which the evidence presented questions of fact for the jury, refusal to direct verdict was proper.

APPEAL from the District Court of the Sixth Judicial District, for Bingham County. Hon. Ralph W. Adair, Judge.

Action on promissory note. Judgment for defendant L. B. Dore. Reversed and remanded.

Reversed and remanded. Costs to appellant.

Peterson & Coffin, for Appellant.

The burden rests upon one who depends upon fraud to plead and prove it. (Bretthauer v. Foley, 15 Cal. 19, 113 P. 356; St. Louis & S. F. R. R. v. Reed, 37 Okla. 350, 132 P. 355; Anchor Buggy Co. v. Houtchens, 59 Wash. 697, 109 P. 1019; Allen v. Kane, 79 Wash. 248, 140 P. 534; Coates v. Marsden, 142 Wis. 106, 124 N.W. 1057; Shebley v. Quatman, 66 Ore. 441, 134 P. 68; Fehr v. Haworth, 33 Idaho 96, 190 P. 248; Moser v. Pugh-Jenkins Co., 31 Idaho 438, 173 P. 639, L. R. A. 1918F, 437.)

A mortgage securing a note may be released without releasing the note. (27 Cyc. 1429.)

The so-called release is merely a receipt and its terms may be explained, varied or contradicted by parol. (Gagnon v. Molden, 15 Idaho 727, 99 P. 965; Barghoorn v. Moore, 6 Idaho 531, 57 P. 265.)

Such instruments are in nowise contractual in their nature, but are mere acknowledgments and the reason which has given rise to the parol evidence rule has no application. ( Farmers' Savings Bank v. Aldrich, 153 Iowa 144, 133 N.W. 383; Strawn v. Missouri K. & T. R. Co., 120 Mo.App. 135, 96 S.W. 488; Hennessy v. Kennedy Furniture Co., 30 Mont. 264, 76 P. 291; Ramapo Foundry & Wheel Wks. v. Carey, 113 N.Y.S. 10.)

The principle admitting parol evidence to vary the terms of written instruments does not rest upon the ground of fraud, accident or mistake, and hence it is not necessary, in order to form a basis for admission of such evidence, that the pleading should contain an allegation thereof. (Stamper v. Cornett (Ky.), 121 S.W. 623; Gulf C. & S. F. R. Co. v. Jones, 82 Tex. 156, 17 S.W. 534; Taylor v. Merrill, 64 Tex. 494.)

"A discharge under seal to defendant of a mortgage held by a plaintiff to secure a note given by defendant to plaintiff is only prima facie evidence of the payment of the note which may be reviewed by parol." (Soule v. Soule, 157 Mass. 451, 32 N.E. 663; Thompson v. Avery, 11 Utah 214, 39 P. 829.)

Whitcomb, Cowen & Clark, for Respondents.

There can be but one action for the recovery of any debt secured by mortgage upon real or personal property. (C. S., secs. 6949-6955.) The remedy by foreclosure is exclusive. ( Cederholm v. Loofborrow, 2 Idaho (176), 191, 9 P. 641; First Nat. Bank v. Williams, 2 Idaho 670, 23 P. 552 (618); Clark v. Paddock, 24 Idaho 142, 132 P. 795, 46 L. R. A., N. S., 475; Kelly v. Leachman, 3 Idaho 392, 29 P. 849; Rein v. Callaway, 7 Idaho 634, 65 P. 63; Barnes v. Buffalo Pitts Co., 6 Idaho 519, 57 P. 267; Portland Cattle Loan Co. v. Biehl, 42 Idaho 39, 245 P. 88.)

Our statute was borrowed from California. (Cal. Code Civ. Proc., sec. 726; 18 Cal. Jur. 235, sec. 522, and cases cited in note.)

The rule in California, as in Idaho, is imperative, and precludes the mortgagee from suing upon the debt alone. (Western Fuel Co. v. Sanford G. Lewald Co., 190 Cal. 25, 210 P. 419; Crescent Lumber Co. v. Larson, 166 Cal. 168, 135 P. 502; Lilly-Brackett Co. v. Sonnemann, 157 Cal. 192, 21 Ann. Cas. 1279, 106 P. 715; Hibernia Sav. & Loan Soc. v. Thornton, 127 Cal. 575, 60 P. 37.)

The mortgagee may not waive his security or release it without the consent of the mortgagor, for the purpose of bringing an action upon the debt. (Rein v. Callaway, supra; First National Bank v. Williams, supra; 18 Cal. Jur. 247, sec. 531; Denver Stockyards Bank v. Martin, 177 Cal. 223, 170 P. 428; National Hardwood Co. v. Sherwood, 165 Cal. 1, 130 P. 881.)

The release of the mortgage was a waiver of the security and a renunciation of the debt. (C. S., secs. 5989, 5986, subd. 3; Whitcomb v. National Ex. Bank, 123 Md. 612, 91 A. 689; Pitt v. Little, 58 Wash. 355, 108 P. 941; Baldwin v. Daly, 41 Wash. 416, 83 P. 724; Dickinson v. Vail, 199 Mo.App. 458, 203 S.W. 635; Northern Crown Bank v. International Elec. Co., 24 Ont. L. Rep. 57, Ann. Cas. 1912A, 472.)

If the plaintiff desired to avoid the effect of his unconditional and absolute release of the debt and its security, he must plead and prove the execution of it by accident, fraud or excusable mistake, and have the instrument reformed. He may not give oral evidence to alter, vary or modify the terms of the writing. (Jensen v. McConnell Bros., 31 Idaho 87, 169 P. 292; Fralick v. Mercer, 27 Idaho 360, 148 P. 906; Tyson v. Neill, 8 Idaho 603, 70 P. 790; 9 Cyc. of Evidence, 331; 10 R. C. L. 1021, sec. 214; Allen v. Ruland, 79 Conn. 405, 118 Am. St. 146, 8 Ann. Cas. 344, 65 A. 138.)

TAYLOR, J. Wm. E. Lee, C. J., and Givens, J., concur. Budge, J., took no part in the decision.

OPINION

TAYLOR, J.

On August 9, 1923, defendants executed and delivered to plaintiff a promissory note for $ 1,500, due one year from date, and a real estate mortgage securing the payment thereof. On December 10, 1923, plaintiff executed and acknowledged before a deputy county recorder a marginal release on the record of the mortgage, in the following words:

"I hereby certify that this mortgage and the indebtedness secured hereby is fully paid, satisfied and discharged.

"C. W. BERRYMAN.

"Signed and acknowledged before me the 10th day of December, 1923.

"H. A. BENSON,

"County Recorder.

"By RUTH F. HILLIARD,

"Deputy."

Plaintiff delivered the mortgage to defendant L. B. Dore, but retained the note. When the note came due, plaintiff demanded payment, which was refused. Plaintiff instituted this action to recover on the note. At the close of the evidence, the court granted a nonsuit as to defendant Viola D. Dore. This appeal is by the administrator of plaintiff's estate from a judgment in favor of defendant L. B. Dore.

Plaintiff pleaded a simple action on the note. Defendants pleaded that a mortgage was executed as security for the note, and set forth at length the satisfaction. The plaintiff conceded the release of the mortgage, but contended that the purported release of the note was made unintentionally and by mistake.

Appellant specifies 58 assignments of error. It will be unnecessary to treat them all in detail. The error claimed in granting a nonsuit as to Viola D. Dore is neither argued nor well founded. Appellant specifies that the court erred in trying the case with a jury, contending that "the issue made by the pleadings was an issue to be determined by the court." As will be shown herein, there were questions of fact to be submitted to the jury, and it was not error, therefore, for the court to decline to try the case without a jury. Defendant does not claim to have paid anything on this indebtedness, and the only point involved in the case is the effect of the marginal release.

Counsel for defendant argue that a mortgagee cannot maintain an action upon the note alone...