First National Bank of Hailey v. Bews

• Decision Date: 31 December 1892
• Citation: 3 Idaho 486,31 P. 816
• Parties: FIRST NATIONAL BANK OF HAILEY v. BEWS ET AL
• Court: Idaho Supreme Court

31 P. 816

3 Idaho 486

FIRST NATIONAL BANK OF HAILEY v. BEWS ET AL

Supreme Court of Idaho

December 31, 1892

SUIT UPON PROMISSORY NOTE-MORTGAGE TO SECURE SAME-MORTGAGEES GIVEN POSSESSION OF PROPERTY-HOW PARTIES TO BE BROUGHT IN TO DETERMINE RIGHTS-AGREEMENT AS TO PAYMENT.-1. Where the answer admits the making of the note sued on, and alleges by sufficient averments that a mortgage was given to secure said note, and to further secure the same, entered into an agreement to give the holder of the note and the mortgagees possession of a valuable property, with authority to collect the rents, to keep said property insured, and in case of loss by fire to collect the insurance and pay, first, all taxes premiums on insurance, and then the note and interest thereon; that they took possession thereof and collected the rents; that the property was consumed by fire, and that plaintiffs and mortgagees collected said insurance; that the amount so collected far exceeded all demands, and that said note was fully paid from said funds, the said answer sets up a complete plea of payment and setoff, and proof thereof should be permitted.

TO DETERMINE RIGHTS OF PARTIES, HOW BROUGHT IN.-2. Where it appears either from the pleadings or proof that a complete determination of the rights of all the parties cannot be made without making other persons parties, it is the duty of the court to order such persons brought in, and should permit the defendant to file a cross-bill for that purpose. Appeal for fourth judicial district, Alturas County. Judgment received.

(Syllabus by the court.)

APPEAL from District Court, Alturas County.

Judgment reversed, and new trial ordered. Costs awarded to appellants.

A. F Montandon, for Appellants.

Plaintiff not demurring to new matter in the answer, is deemed to have denied it. (Code, sec. 4217; Williams v. Dennison, 94 Cal. 540, 29 P. 946.) A plea in abatement is waived by pleading to the merits. (Railroad Co. v. Harris, 12 Wall. 65; Bell v. Railroad Co., 4 Wall. 598.) A pleading to the merits admits the capacity to sue. (Society v. Pawlet, 4 Pet. 480; Yeaton v. Lynn, 5 Pet. 224; Livingston v. Story, 11 Pet. 351; Kane v. Paul, 14 Pet. 33; Pullman v. Upton, 96 U.S. 328.) A plea of nonassumpsit waives a plea to the jurisdiction for lack of proper parties. (Evans v. Gee, 11 Pet. 80; Bailey v. Dozier, 6 How. 23; Sims v. Hundley, 6 How. 1.)

Angel & Loy, for Respondent.

A counterclaim must be a claim existing in favor of a defendant and against a plaintiff between whom a several judgment might be had in the action. (Rev. Stats., sec. 4184; Stearns v. Martin, 4 Cal. 227; Naglee v. Palmer, 7 Cal. 543; Howard v. Shores, 20 Cal. 282; Cook v. Davis, 22 Cal. 158; Corwin v. Ward, 35 Cal. 195, 95 Am. Dec. 93; Hook v. White, 36 Cal. 299; McGuire v. Lamb, 2 Idaho, 377, 17 P. 749.) Any person may be made a defendant who claims an interest in the controversy adverse to the plaintiff, or who is a necessary party to a complete determination or settlement of the question involved therein. (Code Civ. Proc., sec. 4102.)

MORGAN, J. Sullivan, C. J., and Huston, J., concur.

OPINION

MORGAN, J.

Plaintiff, a corporation, brought suit against the defendants upon a promissory note for $ 5,000, and allege (1) that plaintiff is a corporation; (2) that defendants were partners; that defendants, on the twenty-ninth day of August, 1887, for value received, made, executed, and delivered to McCornick & Co., bankers at Hailey, Idaho, their certain promissory note in writing, dated on said last-mentioned day--and insert a copy of the note, which is in the usual form; that thereafter, before the commencement of this suit, said note was duly assigned to the plaintiff, who is now the lawful owner and holder thereof; that said note has not, nor any part thereof, been paid; and pray for judgment for note, interest, and costs of suit.

Defendant O. R. Young, by leave of the court, files his amended answer, as follows:

"AMENDED ANSWER.

"O R. Young, by leave of court first had and obtained, files his amended answer herein, and says: 1. That, at the time of the execution of the note sued upon in this action, defendants therein also executed a like note for the same amount to the firm of Willman & Walker, then of Hailey, Idaho, and secured the payment of both said notes by then and there executing their mortgage to plaintiff's assignor and said firm of Willman & Walker, jointly, for the amount of both of said notes, on their certain real property then known as the 'Hailey Merchants' Hotel,' consisting of lots 19 and 20, of block 40, of the town of Hailey, with the improvements thereon, the whole thereof being then worth much over $ 40,000. 2. That about the first day of June, 1888, the note sued upon in this action was assigned to plaintiff, and thereby it became the owner and holder of the same, and to the extent of said note is also owner in the mortgage aforesaid. 3. That, to further secure said mortgagees and this plaintiff, on or about June 24, 1888, defendants aforesaid entered into an agreement with said mortgagees and this plaintiff to the following effect: That said mortgagors would put said mortgagees and this plaintiff in possession of said property, with power to use or rent the same for the benefit of mortgagors, by using or renting the same to best advantage, and apply the proceeds thereof, first in payment of taxes legally levied and assessed thereon, next in keeping said property insured to an amount of not less than $ 25,000 and then apply any overplus remaining after payment of taxes and premium on insurance aforesaid, first to the interest accruing on the said notes, and next toward the principal, and thus on, until all of said notes be fully satisfied; and in case of loss by fire before said notes were paid, then to apply so much of the insurance aforesaid as would be necessary to satisfy the same. 4. Thereupon said mortgagees and this plaintiff did agree with said mortgagors, defendants herein, to use or rent said property, collect the rents, pay the taxes, insure and keep the same insured for $ 25,000, pay the interest and principal thereout, or out of the insurance, in the manner and form as stated in the third paragraph of this answer. 5. Thereupon, and the said mortgagees and this plaintiff having accepted and agreed to do and perform the matters and things as in said paragraph 4 of this answer stated and contained, and in consideration thereof, said mortgagees and this plaintiff were duly put in possession of the property aforesaid, and from said day, and continuously thereafter, said mortgagees and this plaintiff were and remained in possession of the same, used, rented and collected the rents thereof, and applied the same to their own use. 6. That the income aforesaid, collected as aforesaid, for the purpose aforesaid, largely exceeded the possible taxes and insurance premium aforesaid. 7. That on July 2d, and during mortgagees' and plaintiff's possession aforesaid, said property was consumed by fire and was a total loss, and the insurance money which mortgagees and this plaintiff did recover under the insurance aforesaid, together with the rents collected, as aforesaid, largely exceeds any possible amount of both principal and interest on both of the notes aforesaid, and the same are fully paid, and a large amount over and above the same is due defendants. 8. Defendant has no positive knowledge that plaintiff did actually receive any insurance after the loss of the said property by fire, or that plaintiff insured the said property at all, but he avers that the said property was consumed by fire through a general conflagration of the town of Hailey, and the same did not originate on said premises at all; that he is informed, and believes said information, that all risks covered by insurance at said time were fully paid, and therefore alleges the fact to be that all risks of insurance against the said premises, which thereon then and there existed, were fully paid. 9. By the agreement aforesaid, and plaintiff's possession thereunder as aforesaid, plaintiff solemnly agreed to and with defendant to keep the said premises insured against loss by fire during his said possession of the same, for not less than the sum of $ 25,000, and to pay itself thereout, and the other aforesaid mortgagees, any amount that in the event might then remain due on the notes aforesaid, and to...