John T. Raithel Et Ux v. Wallace A. Hall

• Decision Date: 07 October 1925
• Citation: 130 A. 749,99 Vt. 65
• Parties: JOHN T. RAITHEL ET UX v. WALLACE A. HALL ET AL
• Court: Vermont Supreme Court

130 A. 749

99 Vt. 65

JOHN T. RAITHEL ET UX v. WALLACE A. HALL ET AL

Supreme Court of Vermont

October 7, 1925

February Term, 1925.

APPEAL IN CHANCERY. Heard on pleadings and findings of fact by chancellor at the September Term, 1924, Windham County, Fish Chancellor. Decree for plaintiffs. Appeal by claimant, Elmer P. Goodnow. The opinion states the case.

Decree affirmed and cause remanded.

Carpenter & Clawson for claimant.

Barber Barber & Miller for the plaintiffs.

Present WATSON, C. J., POWERS, TAYLOR, SLACK, and BUTLER, JJ.

OPINION

SLACK

This is a suit in chancery, and is here on claimant's appeal from a decree for plaintiffs. The suit was brought against Hall and Hughes. It appears from the allegations of the original and amended complaint that on August 13, 1921, Hall conveyed to plaintiffs a farm and personal property in the town of Dummerston for forty-two hundred dollars, and took in part payment plaintiffs' promissory note, of same date, for twenty-seven hundred dollars, secured by a mortgage on said farm and also by a mortgage on said personal property; that on January 17, 1923, plaintiffs brought a body action against Hall for fraud and deceit in the sale of said farm, which action was returnable to Windham county court; that Hughes became bail for Hall in that suit by indorsing his name on the original writ, and that to secure him for so doing, Hall assigned to him said note and mortgages; that at the April Term, 1923, of said court, the jury returned a verdict for plaintiffs in that suit for twenty-two hundred and ten dollars, but that a final judgment had not been obtained when this suit was commenced; that Hall had given out by speech that he would never pay any damages the jury might award against him; that he had no money, or property other than his claim against the plaintiffs evidenced by said note out of which to satisfy any judgment which the plaintiffs might eventually recover; that plaintiffs believed that it was his intention to sell and dispose of said note and never pay any judgment in their favor; that plaintiffs' claim, because of its nature and the fact that it had not been reduced to a final judgment, could not be set off, at law, against the claim which Hall held against them; and that by reason of the premises plaintiffs were entitled to have their damages in the action against Hall, when ascertained, set off and applied in reduction of his note; and the prayer is that Hall and Hughes be enjoined from selling, assigning, or otherwise disposing of said note and mortgages, and that such judgment as the plaintiffs finally recover in their action against Hall may be applied in part payment and satisfaction of the note they gave him, and that to the extent of such judgment it may be set off against said note. The supplemental complaint, which was filed May 24, 1924, alleges that the judgment rendered by the lower court on said verdict was affirmed by the Supreme Court at the May Term, 1924, and had, therefore, become a final adjudication of plaintiffs' damages in that action, and prays, in substance, as does the original complaint. Neither defendant filed any pleading other than a joint demurrer which was not relied upon, but the case proceeded below as though each had filed a general denial to the complaint, and the decree is unchallenged so far as they are concerned.

After plaintiffs filed the supplemental complaint, Elmer P. Goodnow asked, and had, leave to intervene as claimant to said note and mortgages, and thereupon filed an answer to the complaint wherein he admitted the assignment of the real estate mortgage to Hughes, but alleged that the purpose of such assignment was to secure Hughes, not only for becoming bail for Hall in plaintiffs' action at law, but also to secure him for services and disbursements in defending Hall in that action; and further alleged that on May 8, 1923, Hall sold and assigned to the claimant, for a good and valid consideration, all of his, Hall's right, title, interest, and estate in and to said mortgage; that at the time he purchased said mortgage he had no knowledge of any contemplated action on the part of these plaintiffs to have their judgment against Hall applied to the payment of said mortgaged note, and that he had no knowledge of these proceedings until the last of May, 1924, and denied the right of the plaintiffs to have their judgment against Hall set off against said mortgage. In reply, the plaintiffs reaffirmed that said note and mortgages were assigned by Hall to Hughes to secure the latter for becoming bail for the former in the deceit action, and, severally, denied all other allegations of claimant's answer, and further alleged, in substance, that claimant had full knowledge of the litigation pending between them and Hall at the time of the alleged assignment to him; "that defendant Hall approached said claimant for the purpose of selling his interest in said mortgage debt solely for the purpose of hindering and delaying the plaintiffs in the collection of their claim and judgment against said Hall; that claimant was fully aware of all these circumstances when he purchased defendant Hall's interest in said mortgage debt of the plaintiffs, and became a party thereto; that the circumstances attending said transaction were such as to put the claimant or any prudent person upon inquiry as to the object and purposes for which defendant Hall was attempting to transfer said mortgage debt to said claimant; that by reason thereof said transfers are fraudulent and void as against the rights of these plaintiffs." The new matter set up in plaintiffs' reply was denied by the claimant.

Evidence was heard bearing on the issues thus presented, the facts were found and stated, and a decree was entered declaring the assignment from Hall to the claimant to be null and void, and applying the amount of plaintiffs' judgment against Hall in payment and satisfaction of his interest in said note in accordance with the prayer of the complaint.

At the close of all the evidence, the claimant moved for a decree in his favor denying the right of plaintiffs to have the amount of their judgment against Hall set off against said note, and establishing his title to the note and mortgage under his assignment, the motion was denied and he had an exception. The motion was properly disposed of. The pleadings presented controverted questions of fact touching which evidence had been introduced by both parties; hence it was the duty of the chancellor to find and state the facts. While the statute which provides for a hearing of chancery causes involving controverted questions of fact by a chancellor (G. L. 1511), does not expressly provide that he shall find and state the facts, the provision of the same section relating to exceptions makes it clear that it was intended he should do so. That provision is "Exceptions taken in the trial of controverted questions of fact before a chancellor shall be available on appeal in the same manner as in county court causes tried by the court"; and in the county court causes there referred to the facts must be found, etc., before a bill of exceptions is allowed. G. L. 2259. Then, too, a trial by the chancellor is like, and takes the place of, a trial by a special master, and the statute expressly provides that special masters shall make full report of the facts found by them (G. L. 1518), and that no question regarding the admission or exclusion of evidence by them shall be heard in this Court unless objection thereto is made by exception to the report, which is the finding, duly filed in the court of chancery. G. L. 1520. The latter provision has been repeatedly held to apply to hearings before chancellors. Barber v. Bailey, 86 Vt. 219, 84 A. 608, 44 L.R.A. (N.S.) 98; Rowley v. Shepardson, 90 Vt. 25, 96 A. 374; Vermont Marble Co. v. Eastman, 91 Vt. 425, 101 A. 151; Waterman v. Moody & Rogers, 92 Vt. 218, 235, 103 A. 325. To dispel any existing doubt in the matter, we take this occasion to...