Solly v. Clayton

• Decision Date: 03 December 1888
• Parties: SOLLY v. CLAYTON.
• Court: Colorado Supreme Court

20 P. 351

12 Colo. 30

SOLLY v. CLAYTON.

Supreme Court of Colorado

December 3, 1888

Commissioners' decision. Error to district court, El Paso county.

The plaintiff in error was plaintiff below, and brought this action against defendant in error to recover the sum of $3,500, and interest thereon, and alleged in her complaint that she loaned one Phineas W Barnes $3,500, and that, to secure the payment of said money, said Barnes executed a trust deed to the defendant as trustee; and that defendant negligently, and without any authority from the plaintiff executed and delivered a release of said trust deed, with the intent that the same should be recorded; that by reason thereof the plaintiff's security was discharged, and she wholly lost said debt.

The defendant's answer sets up three defenses. The first defense admits the making and delivery of the trust deed by Barnes, and the release thereof by defendant, but denies the allegations of negligence and improper action on his part. The second defense alleges that said loan was negotiated and made by and through one George Bucklin; that said Bucklin was then engaged in the city of Denver in a general business of negotiating loans, collecting and receiving payments of loans, both principal and interest, as an agent and broker for others; that as such agent and broker, and as the agent of the plaintiff, Bucklin loaned said money to Barnes, and received from Barnes the note, and deed of trust given to secure its payment; that from time to time Bucklin collected and received from Barnes the interest upon said notes as the same became due and payable; that in March of April, 1875 Bucklin turned over his said business to and was succeeded therein by Talmadge Norwood; that plaintiff, knowing of the transfer of said business by Bucklin to Norwood, placed said note in the hands of said Norwood as her agent for the purpose of having him collect the interest thereon from time to time, as the same became due and payable, and for the purpose of collecting and receiving payment of the principal when the principal of said note became due and payable, and of renewing said loan; that the plaintiff at all times after she placed said note in the hands of said Norwood held out to the world, and particularly to the defendant, that said Norwood was her agent, and was transacting her business in said city of Denver, and had full power and authority in respect to said note and said loan; that on the 11th day of January, 1877, upon the application of said Norwood as the agent of the plaintiff, he executed the release of said trust deed believing that said Norwood was the duly-authorized agent of the plaintiff for that purpose, and without any intent to injure the plaintiff, or deprive her of her security. The third defense set up a former adjudication in the circuit court of the United States for the district of Colorado, in an action by the plaintiff against said Barnes the defendant, and others, which action was brought to obtain a decree canceling and annulling said deed of release; the defendant in said third defense alleging that it was a material question in issue in said suit, as between the plaintiff and said defendant, whether or not the said Norwood was the duly-authorized agent of the plaintiff to receive and accept payment of the principal sum of said promissory note from said Barnes, and whether or not said Norwood was authorized and empowered by the plaintiff to ask and request defendant to make, execute, and deliver to him said release deed; and that it was, in fact, duly adjudged, determined and decreed by said circuit court that said Norwood was the duly-authorized and accredited agent of the plaintiff to collect and receive payment of said promissory note from said Barnes, and that he was authorized and empowered by said plaintiff to ask and request the defendant to make, execute, and deliver to him said release deed, and that said judgment and decree still remained in full force and effect. Issue was joined by the replication of the plaintiff.

Upon the trial, after the evidence was all in, the court instructed the jury to bring in a verdict for the defendant. In refusing a motion for a new trial, the court stated the grounds for such ruling as follows: ' First, without the third defense of res adjudicata, and the record of the circuit court introduced in support thereof, the plaintiff was not entitled to recover, as a matter of law, upon the admitted and uncontradicted evidence in the case; second, the aforesaid record of the circuit court supported the said defense of res adjudicata, and there was no competent evidence, either admitted or affirmed, to overthrow the same.'judicata, relying on a decree dismissing a bill filed by plaintiff, to which defendant was a party, to cancel the release. The bill alleged that N., to whom B. had paid the debt, had authority to receive only the interest, and not the principal, of which B. was cognizant; and that N., by falsely representing the extent of his powers, procured defendant to release the deed of trust. B. answered that N. was authorized to collect the whole debt, and that plaintiff was estopped to deny such authority by having acted so as to induce him to believe N.'s statements, upon which he paid the debt. Held, that as it did not appear on what ground the former suit was decided, and as it might have been either for the reason that N. had authority to collect the debt, or that plaintiff's conduct had induced B. to believe that he had it, the latter of which would not be conclusive in defendant's favor, the defense was not sustained.

Lyman K. Bass, for plaintiff in error.

w. b. m/ills, for defendant in error.

RISING C., ( after stating the facts as above.)

The ruling of the court in instructing the jury to bring in a verdict for the defendant was based upon two grounds: First, that the admitted and uncontradicted evidence in the case presented a question of law for the court, and left nothing for the jury to determine; second, that the defense of res adjudicata, as pleaded and proved, constituted a complete and perfect defense to the action.

In support of the ruling of the court upon the first ground, counsel for defendant in error contends that, 'where the facts are undisputed, it is the province of the court to settle the question of negligence as a question of law.' It is contended by counsel for plaintiff in error that, 'when the question arises upon a state of facts on which reasonable men may fairly arrive at different conclusions, the fact of negligence cannot be determined until one or the other of those conclusions has been drawn by the jury.' There seems to be an irreconcilable conflict in the decisions of the courts upon the question so presented, yet the question is not an open one in this state. In Railroad Co. v. Martin, 7 Colo. 592, 599, 4 P. 1118, Chief Justice BECK, speaking for the court, says: 'It has been well said that, to warrant the court in instructing the jury that a party is guilty of negligence, the case must be such as to allow no other inference from the evidence; and, if the question depends upon a state of facts from which different minds may honestly draw different conclusions, the question must be submitted to the jury.' We do not think the evidence in this case presents a state of facts from which no inference of negligence can be drawn. That reasonable minds might honestly draw different conclusions from these facts seems clear to us, and under the ruling in Railroad Co. v. Martin, the question of negligence in this case should have been submitted to the jury, unless the defense of res adjudicata had been fully established.

It is contended by counsel for plaintiff in error that it is shown by the record that the judgment in the circuit court might have been rendered upon either one of two distinct grounds: (1) That Norwood was the duly-authorized agent of the plaintiff to receive from Barnes the payment of the note at the time such payment was made; (2) that plaintiff was estopped by her conduct from denying such agency as to Barnes. Counsel further contends that it does not appear from the record, and that it was not shown by extrinsic evidence, upon which of those grounds the judgment was based, and that, therefore, the judgment in that case cannot operate as a bar or estoppel to a recovery by the plaintiff in this case. Counsel for defendant in error contends that in the circuit court 'the main and vital issue was whether or not Norwood was the plaintiff's agent.'

The first question to be determined is whether or not the record shows that two grounds of defense were presented in the case in the circuit court, as contended by plaintiff in error. The bill of complaint in that action alleged that complainant loaned Barnes the sum of $3,500; that Barnes gave her his note therefor, and made a trust deed to Clayton as trustee to secure payment thereof; that she placed said note in the hands of Norwood to collect the interest thereon, as the same became due and payable, and for no other purpose; that the time of payment of said note was extended from the 29th day of December, 1875, to the 29th day of December, 1876, and from the 29th day of December, 1876, to the 29th day of December, 1877; that said Barnes, well knowing that said Norwood had no authority to receive payment of said note, or to surrender the same to him, paid said note to Norwood, that Norwood procured from Clayton, by false representations, a release of said trust deed; that Norwood converted said money, so collected, to his own use; and prayed that the deed of release from Clayton to Barnes be canceled, annulled, and for naught held, and that complainant be reinvested with and reinstated in all her former rights under...