Carpenter & Carpenter, Inc. v. Kingham, 2172

• Citation: 109 P.2d 463,56 Wyo. 314
• Decision Date: 21 January 1941
• Docket Number: 2172
• Parties: CARPENTER & CARPENTER, INC. v. KINGHAM
• Court: United States State Supreme Court of Wyoming

109 P.2d 463

56 Wyo. 314

CARPENTER & CARPENTER, INC. v. KINGHAM

No. 2172

Supreme Court of Wyoming

January 21, 1941

Rehearing Denied 56 Wyo. 314 at 350.

APPEAL from the District Court, Laramie County, SAM M. THOMPSON Judge.

Action by Carpenter & Carpenter, Inc., against Fred J. Kingham to have transactions between parties involving three lots declared a mortgage; that the mortgage has been paid, and to require defendant to convey property to plaintiff and for such other relief as was equitable, wherein defendant filed a cross-petition to quiet his title to the premises. From a judgment for plaintiff, the defendant appeals. Rehearing denied, and former opinion modified. See 110 P.2d 824.

Affirmed in part, reversed in part, and remanded with directions.

For the appellant, there was a brief and oral arguments by M. A. Kline and Arthur Kline of Cheyenne.

The trial court erred in finding that the instruments involved constituted a mortgage upon real estate. It is clearly established by the evidence that grantee refused to take a mortgage and that the parties did not intend that it should be a mortgage transaction. 41 C. J. 337. The intention of the parties governs. Parks v. Mulledy (Ida.) 290 P. 205; Sauve v. More Investment Co., 248 F. 642; Johnson v. Bank (Wash.) 118 P. 21; Wallace v. Johnstone, 129 U.S. 58; Bogk v. Gassert, 149 U.S. 17; 41 C. J. 287; McMahon v. Gotch (Ia.) 179 N.W. 929; Hoffman v. Graaf (Wash.) 28 P.2d 236; Holmberg v. Hardee (Fla.) 108 So. 211; Jackson v. Maxwell (Me.) 94 A. 16; Brown v. Hempkins (Tex.) 38 S.W.2d 173; Drennen v. Lavender (Ida.) 238 P. 532; Dean v. Smith (N. D.) 204 N.W. 987; Lamberson v. Bashore (Cal.) 139 P. 817; Shaner v. Bank (Ida.) 161 P. 90; Baird v. Baird (Colo.) 111 P. 79. An agreement to reconvey does not make the transaction a mortgage. 1 Wiltse on Mortgage Foreclosure (9th Ed.) 13; Carter v. Simpson Company (Ore.) 203 P. 580; Moore v. Hopkins (Kan.) 114 P. 1066; Nelson v. Lump (Colo.) 220 P. 1006; Gardner v. Welch (S. D.) 110 N.W. 110; Doolittle v. Murray & Co. (Ia.) 111 N.W. 999; Thomas v. Scutt (N. Y.) 27 N.E. 961. The rule is stated in McFadden v. French, 29 Wyo. 401. The decree of the trial court related to matters not included in the pleadings and is not enforceable. Franz v. Orton, 75 Ill. 100; Love v. Cobb, 63 N.C. 324; Hill v. Fiske, 38 Me. 520. The trial court erred in holding that the contract relating to Lot 3 constituted a mortgage. Judgments not based upon the pleadings are not enforceable. 33 C. J. 1152. The court erred in holding that the contract relating to Lots 1 and 2 in Block 99 was a mortgage in view of the evidence. The courts cannot relieve the effect of a forfeiture agreed upon by a party. Quinlan v. St. John, 28 Wyo. 1; McDonald v. Bartlett (Ill.) 155 N.E. 477; Garvey v. Barkley (Wash.) 104 P. 1108; Coughran v. Bigelow (Utah) 34 P. 51; Benham v. Canal Company (Wash.) 132 P. 884. Plaintiff's title and interest in Lots 1 and 2, Block 99 were extinguished by the foreclosure conducted by A. E. Wilde, Receiver. A court of equity will not relieve a party from the consequence of his own carelessness. Waymire v. Shipley, 97 P. 807; Wright v. Walker, 31 Wyo. 233. The trial court erred in holding that defendant should account to plaintiff for transactions involving certain lots. An accounting cannot be decreed even within the scope of the pleadings. Portes v. Hurlbut (N. J.) 14 A. 891. The trial court erred in the admission or rejection of evidence, to which record exceptions were taken. Plaintiff corporation was without legal capacity to sue, its corporate character having been forfeited under Section 28-1002, R. S.; Section 2, Article X, Wyoming Constitution; Seventy-three First Ave. Corporation Inc. v. Braunstein Brothers Corporation, 6 N.Y.S.2d 664; Motor Engineering Company v. Holmes Company (Mich.) 217 N.W. 25.

For the respondent, there was a brief and oral arguments by Ray E. Lee and Clyde Zachman of Cheyenne.

The main question in this case is whether certain instruments relating to the sale of real estate were in fact sales or were only mortgages. The Supreme Court is not the trier of facts. First National Bank v. Barrett, 54 Wyo. 394; Peterson v. Johnson, 46 Wyo. 473; Willis v. Willis, 48 Wyo. 403. Under the evidence, we believe the instruments executed by the parties constituted a mortgage. 19 R. C. L. 261, Sec. 29; 19 R. C. L. 244, Section 7; Ditto v. Bank, 38 Wyo. 120. It is so held by other authorities. Shillaber v. Robinson, 97 U.S. 68; In re Snider, 114 N.W. 615; Fiske v. Mayhew, 133 N.W. 195; Plummer v. Isle, 82 P. 1009; Smith v. Pfluger, 105 N.W. 476. If the purpose is security, the instruments must be construed to constitute a mortgage. Smith v. Headlee, 183 P. 20; Cohn v. Supply Co., 24 A. L. R. 808; Ditto v. Bank, 38 Wyo. 120; Swift v. Swift, 36 Ala. 147; Leone v. Zuniga, 34 P.2d 699; Ingram v. Mining Co., 65 P. 549; 13 C. J. 608. It is contended that Lot 3 of Block 99 was included in the contract through mistake. Under the evidence, defendant was in default and not in a position to declare a forfeiture. Knight v. Orchard, 92 Mo.App. 466; 17 C. J. S. 896; 24 R. C. L. 661. Plaintiff was entitled to have the contract performed. Boone v. Templeman, 110 P. 947; Stevinson v. Joy, 128 P. 751; Pearson v. Brown, 148 P. 956; 9 A. L. R. 996; Waechter v. Wilde, 47 Wyo. 363. Where both parties are in default, the court should restore them to their original condition. Francis v. Brown, et al., 22 Wyo. 528. Equity has power to do substantial justice. Metcalf v. Hart, 3 Wyo. 513. Forfeitures are not favored. Oil & Gas Co. v. Cross, 31 Wyo. 9; Corp. v. Thomson, 31 Wyo. 264; Oil Co. v. Carter Oil Co., 31 Wyo. 314; Parker v. Meadows, 20 Wyo. 183. The defendant holds the title of the premises as trustee for the plaintiff (Baldwin v. McDonald, 23 Wyo. 108), and must foreclose in order to exclude plaintiff from its interest in the property. Robinson Company v. Davis, 26 Wyo. 484; Gallaher v. Herbert, 7 N.E. 511. When defendant Kingham accepted payment of $ 2430.00 from Mrs. Carpenter and applied rents up to May 31, 1934, he recognized the validity of the contract. Newell v. Stone Company, 184 P. 659. A corporation dissolved under Section 28-1109, R. S., may prosecute an action at law to the same effect as if it were not dissolved. Company v. Sauer, 65 Mo. 279; Wyoming-Indiana Oil and Gas Company v. Weston, 43 Wyo. 526; Havemeyer v. Court (Cal.) 24 P. 121; Hanson v. Choynski (Cal.) 180 P. 816; American Surety Company v. Great White Spirit Company, 43 A. 579; People v. National Trust Company, 82 N.Y. 283. The effect of the statute is to extend the existence of a corporation for such period as may be necessary to wind up its affairs. Bank v. Johnson, 54 F.2d 367 and cases cited. The contract of March 12, 1930 was fully performed and discharged. Rocky Mountain Farm Company v. Lunt, 151 P. 521; Mortgage Company v. Krewson, 224 P. 566; Harn v. Loan Company, 188 P. 343; Hill v. Breeden, 53 Wyo. 125. A former case was settled out of court, which released the plaintiff under the contract of March 12, 1930. Wolford v. Compton, 79 Va. 333; Hoover v. Mitchell, 25 Gratt. 387. Under the settlement, defendant was obligated to convey Lots 1 and 2 to the plaintiff.

BLUME, Justice. RINER, Ch. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

STATEMENT OF FACTS.

In this action the plaintiff, Carpenter & Carpenter, a corporation, alleged that on March 12, 1930, it became indebted to the defendant Kingham; that at that time a deed was executed to defendant for Lots 1, 2 and 3 of Block 99 of the City of Cheyenne, Wyoming, which was intended as a mortgage; that at the same time, the defendant executed a contract of sale for the property; that the mortgage has been paid. Plaintiff asked that defendant be required to convey the property to plaintiff, and for such other relief as is equitable. The court held the transaction to be a mortgage, and ordered an accounting between the parties, and for such further proceeding as the result of the accounting might show to be necessary. The defendant has appealed. The parties will be referred to as in the court below, or by name. The salient facts, omitting some facts which we consider immaterial, are as follows:

On December 12, 1929, the plaintiff executed to defendant a deed for Lot 3 above mentioned. At the same time the defendant executed a contract of sale to the plaintiff, agreeing to convey this property to plaintiff upon the payment of $ 1600.00. Thereafter plaintiff, having acquired Lots 1 and 2 above mentioned, constructed four houses thereon, borrowed $ 6100 from the Home Building and Loan Company, and executed a first and prior mortgage for that sum to that company. The company thereafter went into the hands of a receiver. The money so borrowed, however, was not sufficient to complete the houses above mentioned, and plaintiff through Art Carpenter, its manager, applied to defendant for a loan sufficient to complete them. Art Carpenter and the defendant were friends, and to some extent had been chums. It was agreed between them that defendant should advance money to the plaintiff to complete the houses, that plaintiff should convey to defendant Lots 1 and 2 above mentioned, and also certain property, called the Avalon property, owned at that time by Fannie M. and J. R. Carpenter, parents of Art Carpenter, and that defendant should execute a contract of sale, agreeing to convey to plaintiff these properties upon the payment of $ 3974.42 and interest thereon, partly payable on August 1, 1930, and partly on February 1, 1931. J. R. and Fannie Carpenter executed a deed to defendant to the Avalon property on February 10, 1930; the plaintiff executed a deed to defendant for Lots 1 and 2 on March 8, 1930, both deeds reciting as...