Satterlund v. Beal

• Citation: 95 N.W. 518,12 N.D. 122
• Decision Date: 05 June 1903
• Docket Number: 6731
• Court: United States State Supreme Court of North Dakota

95 N.W. 518

12 N.D. 122

JOHN SATTERLUND v. ORLANDO H. BEAL

No. 6731

Supreme Court of North Dakota

June 5, 1903

Appeal from the District Court, McLean County; Winchester, J.

Action by John Satterlund against Orlando H. Beal. Judgment for plaintiff. Defendant appeals.

Reversed.

Judgment of the district court reversed. Appellant recovered his costs on this appeal.

Newton & Smith, for appellant.

(1) Plea of payment admits plaintiff's right of action, and denies defendant's liability by reason of matter in avoidance, i. e., discharge by payment. 16 Enc. of Pl. & Pr 167, 18 Am. & Eng. Enc. of Law 556. Reply must not set forth facts inconsistent with those alleged in the complaint. Rev Codes, 5277. At common law such pleading is called departure Gould's Pleading (3d Ed.) 453. Under the Codes it is inhibited. 18 Enc. Pl. & Pr. 462, Test 2. 6 Enc. Pl. & Pr. 462, Test 2. Max. Code Pleading 561.

Pleading statutes of limitation by the language, "that the claim set out in the counterclaim of the defendant's answer was barred by the statute of limitations," states no issuable fact, but a conclusion of law. 13 Enc. Pl. & Pr. 214 and cases cited.

(2) Where payment is alleged in the complaint and denied in the answer burden of proof is on plaintiff. Farmers' Loan & Trust Co. v. Siefke, 144 N.Y. 354, 39 N.E. 358, and cases cited, 18 Am. & Eng. Enc. of Law 171; Curtis v. Perry, 50 N.W. 426. Payment must be in money or something accepted in its stead. People ex rel., Port Chester Sav. Bank v. Cromwell, Treas., 102 N.Y. 477-485, 7 N.E. 413, 2 Gr. on Ev. section 519, (9th Ed.), 18 Am. & Eng. Enc. of Law 150, 11, also p. 139. A cross demand cannot be treated as payment except by agreement, 18 Am. & Eng. Enc. of Law 152, and cases cited. Under plea of payment, proof of other security taken and obligation surrendered is inadmissible. Bank v. Chilson, 63 N.W. 362. Payment in fact must be proved. Lawrence v. Bill, 14 N.Y. 477. Bar of statute of limitation is not payment. 16 Enc. of Pl. & Pr. 213; Austin v. Wilson, 46 Ia. 362.

Action to remove a cloud on title is an equitable one; it is, therefore, subject to the maxim, "he who seeks equity must do equity." 17 Enc. Pl. & Pr. 370, par. 8a. Where a mortgagor of land seeks to quiet title against a mortgage, he must first pay the mortgage debt, notwithstanding it is outlawed; unless he does so within the time fixed by the court, his action will be dismissed, and relief denied him. 17 Enc. Pl. & Pr. 370, note 4, citing Boyce v. Fisk, 110 Cal. 107, 42 P. 473; DeCazara v. Ornena, 80 Cal. 132, 22 P. 74; Brandt v. Thompson, 91 Cal. 458, 27 P. 763; Booth v. Hoskins, 75 Cal. 271, 17 P. 225; Johnson v. San Francisco Saving Union, 75 Cal. 134, 16 P. 753; Tripp v. Duane, 74 Cal. 85, 15 P. 439; Otis v. Gregory, 111 Ind. 504, 13 N.E. 39; Hall v. Hooper, 47 Neb. 111, 66 N.W. 33; Brewer v. Merrick County, 15 Neb. 180, 18 N.W. 43; New York Nat. Bldg. Ass'n. v. Cannon, 99 Tenn. 344; Merriam v. Goodlett, 54 N.W. 686; Loney v. Courtney, 39 N.W. 616.

The rule will be applied, whenever the adverse equity grows out of the transaction before the court, or such circumstances as the record shows to be a part of its history, or when it is disclosed in the pleading or proof, with full opportunity by the adverse party to explain, or reply to the charge. Comstock v. Johnson, 46 N.Y. 615; Tripp v. Cook, 26 Wend. 143; McDonald v. Neilson, 2d Cow. 139; Casler v. Shipman, 35 N.Y. 333; Finch v. Finch, 10 Ohio St. 501; Hanson v. Keating, 4 Hare 1-5, 6; Whitaker v. Hall, 1 Glyn. & J. 213; Colvin v. Hartwell, 5 Clark & F. 484.

Boucher, Philbrick & Cochrane, for respondents.

F. H. Register, on oral argument.

Payment may be made by any lawful method agreed upon between the parties. 2d Gr. on Ev. 526 and cases cited. Communication to attorney, in presence of both parties and communication by an attorney to the opposite party, are not privileged. Wm. H. Hughes, Ex'r. v. S. P. Boone, 102 N.C. 137; Thayer v. McEwen et al., 4 Ill.App. 416; Carr v. Weld, et al., 19 N. J. Equity 319; Whiting v. Barney et al., 30 N.Y. 330, 14 Enc. of Law 139.

Note was in possession of defendant, and mortgage does not show when it was due, nor did defendant's answer show. Plaintiff could not plead statute before trial, because not possessed of the facts. Under the circumstances of this case, form of amendment to reply was sufficient; it apprised defendant that plaintiff relied on the statute. 13 Enc. Pl. & Pr. 217 and cases cited.

OPINION

COCHRANE, J.

This case was tried to the court without a jury, and is here for trial anew upon all the evidence, pursuant to section 5630 Rev. Codes 1899. The defendant, Beal, indorsed two notes for plaintiff in 1882. May 6, 1886, a judgment was duly obtained and docketed, in favor of William Deering, the payee in these notes, and against this plaintiff as maker and this defendant as indorser thereof. To secure and indemnify Beal against loss through the enforcement of this judgment against him, the plaintiff, Satterlund, on January 8, 1887, made his promissory note for $ 500, due two years after its date, and bearing 10 per cent interest, and payable to defendant, Beal; also a mortgage securing the note upon a large number of town lots in the village of Washburn, McLean County, N.D. This mortgage plaintiff had recorded, and then delivered it, with the note it secured, to defendant. Defendant, Beal, did not consider this note and mortgage sufficient security, and, as a conclusion to some conversation between them, plaintiff paid to the Deering attorneys $ 100, which was applied as payment on this judgment, under date of March 1, 1887, thereby reducing defendant's liability to this extent; and plaintiff executed and delivered to the defendant a contract or bill of sale of certain hay to be grown during the season of 1887 upon Burnt Creek bottom. Beal paid the balance of the Deering judgment, $ 393.85 and some costs, on January 18, 1889.

The first point in controversy, toward the elucidation of which counsel on either side expended some time, is whether the bill of sale of the hay, when delivered to and accepted by the defendant, was an absolute payment of the $ 500 note and mortgage, entitling the plaintiff to a surrender and release thereof; or, on the other hand, was it intended only as an additional security to defendant against liability for plaintiff's debt? Plaintiff's complaint, and his own evidence in support of it, narrow the inquiry upon this point within a small compass. Plaintiff alleged the making of the $ 500 note, and the mortgage securing it; also the recording of the mortgage, and delivery of the note and mortgage to defendant. He then avers that the note, with interest, has for a long time been paid in full, but that the mortgage has not been satisfied, but remains unsatisfied of record and a cloud upon plaintiff's title. He then prays judgment that the defendant give up the mortgage to be canceled, and that the same be satisfied of record. Defendant admits the averments of the complaint, excepting the averment of payment, and denies the payment of the debt secured by this mortgage. This fixes the burden of proof upon plaintiff to show that the debt was paid. Farmers' L. & T. Co. v. Siefke, 144 N.Y. 354, 39 N.E. 358; Curtis v. Perry (Neb.), 33 Neb. 519, 50 N.W. 426. To sustain this burden, plaintiff testified that when he made the contract of sale of the hay in Burnt Creek bottom it was agreed that the proceeds of the nay when sold should be paid on the note. In cross-examination he testified as follows: "Q. He was to account on the note for the proceeds of the hay? A. Yes. Q. You don't know whether it was paid by the proceeds or not, do you? A. No; I could not state that." Plaintiff produced no evidence to show that the hay did pay the note, or as to what was realized from the hay. He wholly failed to sustain the burden he assumed. But the proofs upon this point do not stop with plaintiff's evidence quoted. The uncontradicted evidence of defendant Beal shows that in the cutting, preserving, hauling and disposing of the hay in Burnt Creek bottom he incurred a loss; that the cost was more than the amount realized from the hay.

The second finding of fact of the trial court, to the effect that "said note, together with the interest thereon, was, in the year 1887 paid in full by a transaction between the plaintiff and the defendant relating to the hay grown on the land owned by the plaintiff, and cut and disposed of by the defendant," is not only without support in the evidence, but is directly contrary to the evidence on this point. The defendant by way of counterclaim, alleged the execution and delivery to him by plaintiff of the note and mortgage of January, 1887, for $ 500; and his counterclaim contains all the averments necessary in a foreclosure action. He asks an affirmative judgment against the plaintiff for the amount of this note, with interest thereon from January 8, 1887, and for costs, and for the usual decree of foreclosure. The answer was served on the 6th day of February, 1900. The plaintiff in due time served a reply to this counterclaim, alleging that in the year 1887 he paid the defendant, in full, the demand set forth in the counterclaim. The case was tried upon the issue thus formed. At the conclusion of the evidence, counsel for plaintiff stated: "I wish to amend the reply, and add to the reply, in addition to the allegation of payment, that the claim set forth in the counterclaim of defendant's answer was barred by the statute of limitations. " This was objected to by defendant's counsel as a technical defense not going to the merits. No ruling was made by the trial court upon plaintiff's request at the time, but the court made a finding of fact that the note set out in defend...