Wartell v. Novograd

• Decision Date: 06 June 1927
• Docket Number: No. 6358.,6358.
• Citation: Wartell v. Novograd, 48 R.I. 296, 137 A. 776 (R.I. 1927)
• Parties: WARTELL v. NOVOGRAD.
• Court: Rhode Island Supreme Court

137 A. 776

WARTELL

v. NOVOGRAD.

No. 6358.

Supreme Court of Rhode Island.

June 6, 1927.

Exceptions from Superior Court, Providence and Bristol Counties; Herbert L. Carpenter, Judge.

Action by Nathan Wartell against David Novograd. Verdict for defendant, and plaintiff brings exceptions. Exceptions sustained in part, and overruled in part, and case remitted for new trial.

Cooney & Cooney, of Providence, for plaintiff.

Greene, Kennedy & Greene, of Woonsocket, for defendant.

BARROWS, J. This was an action of assumpsit on the common count for money had and received. At the close of plaintiff's evidence, the trial court directed a verdict for defendant.

Plaintiff is before this court on exception (1) to the granting of defendant's motion to direct a verdict for defendant; (2) to the denial of plaintiff's motion that a verdict be directed for plaintiff; and (3) to the ruling out of plaintiff's offer of certain evidence of a Mr. Israel, then a law student in the office of defendant's attorney.

The principal question raised is whether the plaintiff may bring assumpsit or whether he must resort to equity. Plaintiff was a third mortgagee from one Terkel and wife. The debt to him was $6,000. The first and second mortgages were for $7,000 and $3,000, respectively. There were several mortgages subsequent to that of plaintiff. On foreclosure by defendant, who was the fifth or sixth mortgagee, the property was sold for $43,100. The amount of Terkel's mortgage indebtedness to defendant was $1,500. There is no evidence that defendant mortgagee's sale was pursuant to any agreement with prior mortgagees that a clear title should be conveyed and that defendant should pay said prior mortgages out of the proceeds of the sale. Inasmuch as the sale did not affect the rights of prior mortgagees, defendant, if there were no subsequent ones, was indebted to Terkel and wife for any surplus over and above the $1,500 due to defendant and the expenses of foreclosure. He owed no duty to prior incumbrancers to pay them off. Defendant was a brother of Mrs. Terkel and was assisting the Terkels in adjusting their financial difficulties.

Plaintiff offered but two witnesses, himself and Mr. Israel, now a member of the bar. Defendant, though present at the morning session of court, did not appear in the afternoon and could not be found. Plaintiff's evidence of defendant's acts and statements is not entirely satisfactory or clear, but interpreting it most favorably to plaintiff, as we must do (Cannon v. Staples, 46 R. I. 300, 127 A. 145; Baynes v. Billings, 30 R. I. 53, 58, 73 A. 625), it may be claimed to show that defendant had paid the first and second mortgages, and thereafter admitted that there remained of Terkel's money, in his possession, an amount sufficient after payment of Terkel's $1,500 indebtedness to defendant to pay the plaintiff's mortgage and interest, amounting to $6,450; that defendant told plaintiff that the amount would be paid at the office of defendant's attorney. There is no positive testimony to establish the fact that defendant had agreed with Terkel to pay off the prior mortgages from the surplus after the foreclosure sale. The conduct of Terkel and defendant points to such an arrangement and that defendant was to make as good a settlement as possible for Terkel, There is no evidence that plaintiff at any time expressly gave up his rights against Terkel on the mortgage note or to foreclose his mortgage by sale. When plaintiff went to the office of defendant's attorney to get his money, the attorney tendered him $6,000 in full settlement and he declined to accept it. Plaintiff insisted upon the face of his note with interest, except $150, which he offered to relinquish on account of defendant's representations concerning Terkel's financial misfortunes.

At the close of plaintiff's testimony defendant's attorney, bereft of his client, closed his case and moved for direction of a verdict in his favor on the ground of absence of proof of a definite indebtedness and because the action of assumpsit would not lie. The motion was granted on the latter ground, the court conceding proof of the debt, but holding that plaintiff's remedy was in equity against defendant as trustee.

The question presented is whether an action of assumpsit for money had and received may be maintained to recover a definite amount of money admitted by defendant to be in his hands for the purpose of paying a specific debt from Terkel to plaintiff. The fact that the problem arose out of certain mortgage transactions is not important. The manner by which defendant came into possession of Terkel's money is not controlling. The fact that he had it and for a specific purpose is the vital matter.

Assumpsit for money had and received is an action contractual in form and equitable in its nature. 13 C. J. 244; Williams v. Smith, 29 R. I. 563, at page 578, 72 A. 1093. The action does not necessarily mean that a contract exists expressly or by implication. It means that the form of the remedy is contractual, 6 R. C. L. 588; Williston on Contracts, § 348. Williams v. Smith, at page 579 (72 A. 1101), says: This action "is clearly an exception to the general rule that assumpsit must be based upon a contract express or implied." The action has been permitted where a mortgagor sues a mortgagee for a liquidated surplus in the hitter's hands after foreclosure (Fudim v. Kane, 48 R. I. ——, 136 A. 306), or a cestui sues for a liquidated balance in the trustee's hands after settlement of accounts (Spencer v. Clarke, 25 R. I. 163, 55 A. 329). Bither v. Packard, 115 Me. 306, says, at page 312 (98 A. 929, 932):

"When one person has in...