Lohman v. Reymond.

• Decision Date: 14 October 1913
• Citation: 137 P. 375,18 N.M. 225
• Parties: LOHMAN ET AL.v.REYMOND.
• Court: New Mexico Supreme Court

18 N.M. 225

137 P. 375

LOHMAN ET AL.

v.REYMOND.

Supreme Court of New Mexico.

Oct. 14, 1913.Rehearing Denied Dec. 17, 1913.

Appeal from District Court, Dona Ana County; Parker, Judge.

Action by Martin Lohman, as trustee, against Numa Reymond and others, in which George Lynch and another filed a cross-complaint. Judgment for cross-complainants and defendant named appeals. Affirmed.

On December 6, 1892, the cross-complainant George Lynch and his two brothers, since deceased, executed their deed of trust for the benefit of creditors to the plaintiff, Martin Lohman, and to the defendant Numa Reymond, as trustees. Numa Reymond having left the country, Martin Lohman, trustee, had instituted this suit against Numa Reymond, trustee, and the creditors as defendants, including George Lynch and William Lynch, surviving members of the firm of Lynch Bros., to remove Numa Reymond as such trustee. Numa C. Frenger was appointed by order of the court trustee in place of Numa Reymond. Thereafter, and during the year 1909, George Lynch filed his cross-complaint in the nature of a bill in equity praying for an accounting by the trustees and the appointment of a receiver for the trust estate to take possession and dispose of the same under provisions of said trust deed, and under the direction and order of the court.

George Lynch alleged in his cross-complaint that he is also interested as a creditor of the estate by assignments from other creditors, in addition to his interest as a residuary beneficiary. Lohman and Reymond are sued only in their capacity as trustees. Martin Lohman and Numa Reymond, being in court only as trustees, undertook, nevertheless, to answer the cross-complainant in their individual and personal capacity, and to litigate their individual controversies with Lynch in this suit. The suit was tried upon the issues made by the cross-complaint of George Lynch, the answer of plaintiff, Martin Lohman, the reply of defendant George Lynch, and the answer of defendant Numa Reymond. It is also stipulated in the case that the reply of George Lynch to the answer of Martin Lohman shall be treated as a reply of Edward C. Wade, as co-cross-complainant, with George Lynch, to the answer of Numa Reymond. The vital question upon the appeal is whether Numa Reymond assigned to George Lynch his claim as a creditor against the estate in question.

On or about December 13, 1906, Numa Reymond, John H. Riley, and Martin Lohman, for the consideration of their mutual promises, and for the express consideration of $1 in hand paid, agreed together orally to release (or assign) and did release (or assign) to George Lynch their claims against the trust estate of Lynch Bros. In pursuance of this oral agreement (or assignment), they executed and delivered to George Lynch a written instrument, appearing on its face to be a release to George Lynch, of all their claims against George Lynch. The trial court found as a fact that the said Lohman, Riley, and Reymond did, in fact, assign to George Lynch their claims against Lynch Bros., and upon conflicting evidence, the trial court found that this assignment was made unconditionally. The typewritten instrument in evidence contained a condition written with a pen below, after the signature of the parties.

Where, in a suit to compel trustees to account, the trial court did not hear all of the witnesses testify, an assignment that the court erred in finding that certain claims has been assigned to cross-appellant L. required a review on appeal of all the evidence in the case.

N. C. Frenger, of Las Cruces, for appellant.

J. H. Paxton, of Las Cruces, for appellees.

ABBOTT, District Judge (after stating the facts as above).

The vital question for decision in this case is raised by the first assignment of error, which is: “That the district court erred in admitting in evidence the release submitted by appellees George Lynch and Edward C. Wade and marked Exhibit A under their evidence, upon the ground that the same was referred to in appellee's cross-complaint, and the same, or a copy thereof, was not filed with said cross-complaint, the same having been within their power and control, and no sufficient reason having been given for failure so to do, and which said cross-complaint and their action thereby was founded, as to their rights claimed against appellant, upon said release, it being an instrument in writing.”

[1] The argument of appellant is that, in so far as appellee George Lynch claims to be the owner of the credits of appellant under said estate of Lynch Bros, this action was founded upon the writing appearing in evidence as Exhibit A. It is referred to in the cross-complaint. The same, or a copy thereof, was not filed with said cross-complaint, though within the power and control of said George Lynch, and no sufficient reason was given for failure to do so. The said writing was therefore not entitled to be admitted in evidence, under subsection 307 of the Code of Civil Procedure (Laws 1907, c. 107), which is as follows: “When any instrument of writing upon which the action or defense is founded is referred to in the pleadings, the original or a copy thereof shall be filed with the pleading, if within the power or control of the party wishing to use the same, and if such original or a copy thereof be not filed as herein required, or a sufficient reason given for a failure to do so, such instrument of writing shall not be admitted in evidence upon the trial.”

It is evident upon the face of the record that George Lynch filed his cross-complaint against Numa Reymond only in Reymond's capacity as trustee. He prayed for an accounting by the trustee, and the appointment of a receiver for the trust estate. Unless George Lynch had something more than a mere interest as residuary beneficiary of the trust estate, it is questionable whether he would have an interest sufficient to entitle him to maintain his action; and it was therefore proper to allege that certain creditors had assigned their claims against the trust estate to Lynch, so as to show Lynch's interest and right to sue. The written instrument from Reymond, Riley, and Lohman to Lynch was not pleaded as a basis of the action, nor was any recovery sought upon it. Lynch did not sue as assignor individually or personally. There was no occasion to do so; nor could he know that there ever would be such action. He was justified in taking the position that he would only have to present his title in the receivership proceedings. In his cross-complaint he was not seeking to confirm his title to the claims of Lohman, Reymond, and Riley against the trust estate.

The record shows that up to the time of the filing of the answer of Lohman and Reymond to the cross-complaint, that Lohman and Reymond were only sued in the action in their capacity as trustees. So far as the record shows, Lynch could not then know that there would be any occasion for personal suit against any of the creditors who had released (or assigned) their claims to him. The trustees, Lohman and Reymond, however, being in court only as trustees, undertook to answer the cross-complaint in their individual and personal capacity, and to litigate their individual controversies with Lynch in this suit under his cross-complaint. At the time of filing his cross-complaint, he was, from the record, justified in thinking he would only have to present his title in the receivership proceedings. To question his right and title to the claims of Lohman, Reymond, and Riley against the trust estate in his cross-complaint, in which he was suing for an accounting and receivership, would have been improper pleading. It is a copy of the instrument on which the suit is founded which is to be attached to plaintiff's complaint, and not the evidence required to sustain his case. In this case, the release from Reymond, Lohman, and Riley was not the instrument upon which the action of appellee was founded, but nothing more than a part of the evidence upon which he had a right to rely in case his title to the claims of Lohman, Reymond, and Riley was questioned. It was proper for appellee to set forth all of his interest in the trust estate, so that his right to maintain his action might be unquestioned. Suppose it was shown upon the face of his cross-complaint that the claims of creditors were in so large amount that appellee would certainly have no interest as residuary beneficiary. The record shows in this case that the appellee did not base his title wholly upon the so-called release, but that an oral agreement previous to the written instrument was also relied upon. He had no reason to believe that his title to the claims of Reymond, Lohman, and Riley would be questioned in this action; and his cross-complaint was not based upon such instrument, and it therefore becomes not only unnecessary but improper for the same to have been set forth in his cross-complaint, and, his action not being founded thereon, the same was not inadmissible in evidence. Latterett v. Cook, 1 Iowa, 1, 63 Am. Dec. 428; Fisher v. Patton, 134 Mo. 32, 33 S. W. 451, 34 S. W. 1096; Horne v. Mullis, 119 Ga. 534, 46 S. E. 663; Diggs v. Way, 22 Ind. App. 617, 51 N. E. 429, 54 N. E. 412; Vannice v. Green, 14 Iowa, 262; Bryson v. Kelley, 53 Ind. 486; Duffy v. Carman, 3 Ind. App. 207, 29 N. E. 454; Williams v. Frybarger, 9 Ind. App. 558, 37 N. E. 302; Lester v. People, 150 Ill. 408, 23 N. E. 387, 37 N. E. 1004, 41 Am. St. Rep. 375; State v. Wenzel, 77 Ind. 428; Worley v. Moore, 77 Ind. 567; Shetterly v. Axt, 37 Ind. App. 687, 76 N. E. 901, 77 N. E. 865; Conn v. State, 125 Ind. 514, 25 N. E. 443.

The written instrument having been properly admitted in evidence, it remains to be determined what is the legal effect of said instrument, and this question is directly raised by the eighth assignment of error, which is: “That said court erred in finding that, in law, the appellant has assigned over to the appellee George Lynch...