Churchill v. Welsh

• Decision Date: 24 May 1879
• Citation: 47 Wis. 39,1 N.W. 398
• Parties: OLIVER CHURCHILL, RESPONDENT, v. WILLIAM WELSH, APPELLANT.
• Court: Wisconsin Supreme Court

47 Wis. 39

1 N.W. 398

OLIVER CHURCHILL, RESPONDENT,

v.WILLIAM WELSH, APPELLANT.

Supreme Court of Wisconsin.

Filed May 24, 1879.

Appeal from circuit court, Clark County.MacBride & Grenedy and J. R. Sturdevant, for appellant.

Ring & Youmans, for respondent.

TAYLOR, J.

--This action was brought to recover the value of twenty-one promissory notes of one hundred dollars each, given by one T. C. Hartford, to the plaintiff, bearing date the fifth day of September, 1877, payable the first in forty days after date, the second in forty days after the first became due, and the third in forty days after the maturity of the second, and so on, one of said notes maturing at the end of each succeeding forty days after the fifth of September, 1877, with interest at the rate of ten per cent per annum. The payment of these notes was secured by a chattel mortgage upon a stock of goods owned by the said Hartford, and a part of which stock was the consideration for the notes. The notes and chattel mortgage were placed in the hands of the defendant at the time they were executed, with the consent of the plaintiff and maker.

The plaintiff claimed that the notes and mortgage were placed in the hands of the defendant, with his consent, but he does not explain why they were so placed, except to be held by defendant for collection. After the first note became due, the plaintiff demanded that defendant deliver the notes to him. This the defendant declined to do on the ground, as he claimed, that the agreement between plaintiff and Hartford was that the notes should remain in the possession of the defendant until certain other debts which Hartford owed to other parties, were first settled. This action was commenced on the twelfth day of February, 1878.

It is an action to recover damages for the conversion of the notes by the defendant, and the amount of damages claimed is the amount of the face of the notes, and interest at ten per cent.

The defendant's answer alleges, that for some time previous to the fifth day of September, 1877, the plaintiff and said Hartford had been and then were copartners in business; that on that day the plaintiff sold his interest in the partnership business and stock to Hartford, for the sum of $2,100, for which sum the notes in question were given, Hartford agreeing to pay all the debts of the firm, and executing a mortgage on the stock to secure the payment of said notes; that both parties agreed that these notes and the mortgage should be placed in the hands of the defendant; that Hartford should first pay the debts of the firm, and then pay these notes; that defendant was not to deliver any of these notes to the plaintiff, until the partnership debts were all paid; and that at the time of the commencement of this action the partnership debts were not all paid. The defendant denies that he has converted the notes to his own use, and avers that he now has, and ever since their delivery to him has had, the same in his possession, and that he now is, and at all times has been ready and willing to deliver the same up to whoever may be lawfully entitled thereto.

The answer then concludes as follows: “And the defendant further answering, charges the fact to be, that he, said C. F. Hartford, who is not a party to this action, without any request or collusion on the part of this defendant, makes demand of this defendant, either that he deliver the said notes to him, or that defendant hold the same according to the condition of the agreement, in reference to the same hereinbefore stated in this answer; that this defendant is ready and willing to deliver said notes to the clerk of this court, or to any person to whom the court may order the same to be delivered; that this defendant has no interest whatsoever in this controversy, but that the only parties in interest are the said plaintiff and the said C. F. Hartford. Wherefore the defendant asks that the complaint herein be dismissed as against the defendant; that this defendant may be discharged from all liability to the plaintiff, or any party interested in said notes upon the defendants depositing the same in court; that the said C. F. Hartford may be substituted a defendant herein, in place of this defendant, and that the defendant may have such other and further relief in the premises as may be just and proper.”

To this answer the plaintiff filed a reply, denying all the allegations of the same, and especially denying the partnership alleged to have existed between the plaintiff and Hartford.

The pleadings were all verified. When the cause came on for trial at the circuit, immediately after the jury were sworn, the defendant's counsel produced the notes, and said to the court: “We have here in court the notes referred to in the complaint, and we wish at this time to deposit them with the clerk of this court, subject to the order and direction of the court;” and at the same time handed the notes to the clerk.

After the trial and verdict in favor of the plaintiff for the full sum of $2,100, and interest at ten per cent from September 5, 1877, and before judgment the defendant moved the court to reduce the verdict, the amount of the notes, and enter judgment for nominal damages in favor of the plaintiff, and that the notes be ordered to be delivered to the plaintiff; this motion was overruled, and the defendant excepted, and judgment was entered for the full amount of the verdict.

The defendant also made a motion to set aside the verdict, or the minutes of the court, on the ground that the verdict was contrary to law and against the evidence; that the court erred in the charge to the jury in the several matters excepted to by the defendant, and that the damages were excessive. This motion was also overruled, and the defendant excepted.

The evidence upon the trial was conflicting, and if the number of witnesses was conclusive as to the weight of the evidence, certainly the weight of the evidence was in favor of the theory of the defense that the notes were to remain in the hands of the defendant, not, as set out in the answer, until the debts of the firm of Churchill & Co. were paid, but until the notes themselves were paid.

The plaintiff denies the alleged partnership, and denies that he agreed that either the firm debts or other debts owing by Hartford, should be paid before the notes were paid. He claimed that he wanted the notes placed in the bank for collection, but that the defendant insisted they would be equally safe in his hands, and that he finally left them with him; that when the first became due, he called on defendant, and defendant said it had not been paid, and that there were other debts to be paid; that he afterwards called on the defendant and inquired where the notes were, and that Walsh abused him and ordered him off his premises. Soon after, and before the commencement of this action, he demanded the notes of the defendant, and he refused to give them up.

The defendant and Hartford, the maker of the note, and Hartford's brother, testified that the notes were delivered to the defendant, with the express agreement that he was to hold them until they were paid by Hartford, and that it was also agreed that the debts owing by Churchill & Co., as well as the old mercantile debts owing by Hartford, were to be paid before these notes should be paid, and they and two or three other witnesses swear to the partnership existing between the plaintiff and Hartford. The evidence also shows that the chattel mortgage was indorsed at the time it was filed in the presence of the plaintiff, “subject to the order of William Welsh.”

The evidence also shows that when the plaintiff demanded the notes of the defendant, he replied he would give them up if both parties agreed to it, but he could not give them up unless both parties agree thereto.

Notwithstanding the number of witnesses were in favor of the defendant, the jury found for the plaintiff, and this court cannot reverse the judgment, though we might be inclined to think the weight of evidence was in favor of the defendant.

We have noticed this subject of evidence, as bearing upon the question of the good faith of the defendant in refusing to surrender the notes when demanded, which is a matter of great importance in determining the question of the right of the defendant to surrender the notes after suit brought in mitigation of damages.

As we have concluded that the circuit judge erred in not granting the motion of the defendant to reduce the verdict to merely nominal damages upon the offer of the defendant to surrender the notes to the plaintiff, it will be unnecessary to pass upon the other questions discussed upon the argument of this appeal.

It has been a well established rule in the courts of England for more than a century, that in actions of trover, the court will, under certain circumstances, permit the defendant, after suit brought, to bring the property claimed into court for the defendant, with the costs up to that time, and the court will then order a stay of proceedings, or permit the plaintiff to proceed with the action at the risk of having the costs finally adjudged against him, unless he be able to show that he has been specially damaged by the conversion of the property by the defendant in addition to its value at the time of its return. Or the courts will, in a proper case after verdict, upon a tender of the property, reduce the verdict to nominal damages.

This rule has been followed in Vermont to its full extent as practised in the English courts, and has been recognized as a proper exercise of the power of the court in special cases in the courts of Maine, New York, Massachusetts, and other states. The cases in which this rule has been acted upon by the courts are mostly cases for the conversion of bills, notes, bonds, and other contracts for the payment of money.

The rule was, perhaps, first definitely defined by the court of King's Bench, in 1762, in the case of ...