Simon Newman Co. v. Woods

This is an action brought to foreclose a chattel mortgage dated October 31, 1923, executed by defendants to plaintiff, and covering certain cattle, horses, and farming implements. The chattel mortgage was given to secure the payment of a promissory note of even date therewith, for the sum of $1,900, also executed by defendants. The answer of defendants admits the execution of the note and mortgage, as well as the fact that nothing has been paid thereon, either by way of principal or interest, but denies that there is due or owing or unpaid to plaintiff thereon the said sum of $1,900, or any other sum. This denial is based upon the alleged facts, pleaded as a special defense and also by way of cross-complaint, the substance of which is to the effect that one Tom Woods, brother of defendant Frank P. Woods, had been falsely accused by the plaintiff and its agents and employees of the crime of embezzlement, and that the note and mortgage were executed by defendants by reason of such threatened arrest and prosecution and on the understanding that he would not be so prosecuted, and that the whole transaction was, therefore, void as contrary to public policy.

Two questions were presented to the jury, called at the request of defendants, as follows: 1. Was there any consideration received by the defendants, or either of them, for the note and mortgage executed by defendants to plaintiff? 2. Was the consent of defendants, or either of them, to the execution of the note and mortgage to plaintiff obtained by threats to arrest, imprison, and prosecute Tom Woods, brother of Frank P. Woods, for embezzling or stealing goods belonging to the Simon Newman Company ? The answer of the jury to each question was favorable to defendants, the first being answered in the negative and the second in the affirmative.

The rule,_ as conceded by appellants, is well settled that where the case is in equity the verdict of the jury is merely advisory to the court. (Sweetzer v. Dobbins, 65 Cal. 529 [ 4 Pac. 540 ]; Sullivan v. Royer, 72 Cal. 246 [ 1 Am. St. Rep. 51 , 13 Pac. 655 ].) The foreclosure of a mortgage is a proceeding in equity, and, therefore, the verdict of the jury was merely, advisory. (Downing v. Le Du, 82 Cal. 471 [ 23 Pac. 202 ]; Van Valkenburg v. Oldham, 12 Cal. App. 572 [ 108 Pac. 42 ]; Coghlin v. Quartararo, 15 Cal. App. 662 [ 115 Pac. 664 ].)

The verdict of the jury being advisory, this court will not disturb the findings of the trial court if there is substantial evidence supporting the same. It is true, as stated by appellants, that the court cannot arbitrarily set aside the verdict of the jury; but the action of the court in disregarding the verdict cannot be characterized as “arbitrary,” if its findings are substantially supported by the evidence. In its last analysis, therefore, the contention of appellants to the effect that the court abused its discretionary power in setting aside the verdict of the jury is merely tantamount to a statement that the findings are not supported by the evidence.

The main contention is that the note and mortgage were given as a result of threats of prosecution against Tom Woods, and we shall take up this proposition first, discussing later the subject of want of consideration, incidentally adverted to in appellants’ closing brief.

It is the province of the trial court, in the exercise of a sound discretion, to determine the facts, where such conflict exists; hence, we shall give in substance and effect an outline of some of the testimony which doubtless influenced the court in the conclusion it reached, treating them as established facts in the case, as we must in view of the findings being favorable to plaintiff.

The plaintiff conducted a mercantile business, and Tom Woods, brother of defendant Prank P. Woods, was, on the thirty-first day of October, 1923 (the date of the execution of the note and mortgage), and for approximately four years prior thereto had been, a clerk in one of the departments thereof. B. E. La Posea and his wife were employed by said plaintiff to conduct an investigation as to the running of the business of said firm and to “test” the honesty of the various employees thereof. With this in view certain purchases were made by them from Tom Woods, in payment for which they had tendered him certain marked money. Although a cash register had been provided by the firm on which he was to “ring up” sales so made, he had not done so but had placed the money in his pocket. When confronted the next day with these facts he admitted he had taken the money tendered in payment for the goods and had been so doing for a period of several years. The marked money was voluntarily returned by him to the firm and a written confession was freely signed by him to the effect that he had stolen from the firm at the rate of four dollars per day for 600 days, making a total of $2,400. He admitted, at first, that the amount taken was ten dollars per day, and then stated it was six dollars per day, but later said it would be impossible to raise the full amount he had taken, so, at his suggestion, the amount was lowered to four dollars per day. After the confession had been signed and witnessed Tom Woods, accompanied by Mr. and Mrs. La Posea, went to the former’s home, where he gathered up a

Without detailing the testimony offered on behalf of defendant it may be said, generally, that Tom Woods denied his guilt; claimed that the confession was secured by means of threats made to him; that his home was ransacked by Mr. and Mrs. La Posea, but that only articles belonging to him, and not to the firm, were found. Frank P. Woods testified that while he had gone to Modesto at the request of Ms brother he was told while there that unless the money was put up Tom would be prosecuted; that Mrs. Woods had asked the detectives (Mr. and Mrs. La Posea) if the money was put up if they would prosecute Tom, and that Mr. La Posea shouted out “No.” He testified also, in substance, that Mr. Morchead at the bank had told him that he was wanted at the Simon Newman store, and that he had no sooner arrived when Mr. Price was there to meet him, who told him that his brother, Tom, had stolen goods and money amounting to $2,400, and that in reply he had said to Mr. Price that if that would save him from being prosecuted he would sign a mortgage, and Price replied: ‘ ‘ That is all right, that they would take it up.” He further testified that at the time he had signed the mortgage Mr. Price asked him if he knew what he was signing the mortgage for, and he replied, “Yes, I was signing it to keep Tom from being prosecuted,” and he, Price, said, “It was right.”

Testimony was also given on behalf of defendants as to certain conversations had between them at their home during the interval between the time the husband signed the note and mortgage and the time Mrs. Woods signed the same, to the effect that Frank P. Woods had informed his wife that, unless the note and mortgage were given, his brother would be prosecuted. No mention was made by Mrs. Woods of these purported conversations with her husband, either to the notary public at the time she acknowledged the mortgage or to any person connected with, or in the employ of, the plaintiff corporation. While this line of testimony went in under objection, the findings being in favor of the plaintiff, the question as to the correctness of the ruling of

The trial court was not bound to accept as true this part of the testimony of defendants merely for the reason that it was not directly contradicted by other witnesses; but the court had the right, and it was its duty, to examine and consider and determine its verity in the light of all the facts and circumstances in the case.

It is conceded that a note or mortgage given on promise to refrain from the prosecution of a person for a felony, or under threats of arrest or prosecution, would be void as against public policy; but whether or not the note and mortgage were so given was a question presented to the trial court for determination. The evidence on the subject was highly conflicting, and the court resolved the conflict in favor of the- plaintiff. There is substantial evidence to support its findings in this regard, and hence it is not the province of this court to disturb the same.

The question of whether the findings of the court with reference to the consideration for the note and mortgage finds support in the evidence remains to be considered. In this connection, the court found that the note and mortgage were executed in order to liquidate the obligation of Tom Woods to plaintiff, and further found that there was a good and valuable consideration for the execution of said documents, to wit, the forbearance on the part of plaintiff to sue Tom Woods upon his indebtedness to plaintiff.

Plaintiff offered in evidence the note and mortgage, the execution of which were admitted, together with proof that nothing had been paid thereon, either for principal or interest, and rested.

The defense put in their case along the lines we have before stated, for the purpose of showing that the note and mortgage were given as a result of threats of prosecution directed toward Tom Woods and on the understanding that such threats would not be carried out. There was testimony by the defendants that they had received no consideration for the execution of note and mortgage.

The testimony of the witnesses for the plaintiff in rebuttal was along the lines already indicated, denying the threats and giving a different version of the transaction and

A good and sufficient consideration for a written contract will be presumed. (Sec. 1963, subd. 39, Code Civ. Proc.) Hence, by the introduction in evidence of the note and mortgage plaintiff made out a prima facie case. Section 1615 of the Civil Code provides: “The burden of proving the want of consideration sufficient to support an instrument lies with the party seeking to invalidate or avoid it.” The burden was, therefore, cast upon the defense of overcoming the presumption of consideration.

Under this state of the case the testimony offered on the part of the defense merely raised an issue of fact which was for the tribunal trying the cause to determine. (Secs. 1957, 1963 and 2061, subd. 2, Code Civ. Proc.; Mar Shee v. Maryland Assur. Corp., 190 Cal. 1 [ 210 Pac. 269 ]; Keating v. Morrissey, 6 Cal. App. 163 [ 91 Pac. 677 ].)

The fact in dispute raised by the presumption still remains one to be determined by the court or jury trying the cause until the presumption is dispelled. (Mar Shee v. Maryland Assur. Corp., supra.)

Appellants’ position seems to be that it was established or proved as a fact in the case by a witness called on the part of the plaintiff itself that there was no valid consideration, and in this connection they rely upon an answer on cross-examination given by the witness Price, called in rebuttal by plaintiff. As some matters explanatory of the answer of the witness so relied upon do not appear in appellants’ brief, we quote from the record. “Q. Well, will you state to the jury, Mr. Price, what was the occasion by you, or the Simon Newman Company, of having this mortgage $1,900 and having $500 received from Mrs. Tom Woods. Mr. Goldman: I think that is about seven times that we have stipulated as to what consideration we claim was given, and we don’t claim any other consideration. Mr. Anaya: He may have a new one. Mr. Goldman: We don’t claim any other consideration, so why waste time on it. The Court: Well, you can state whether or not there was a consideration. The witness: May I ask your Honor just what is meant by ‘consideration’? Mr. Goldman: We will object to the question as calling for a conclusion. The Court: The consideration for the $1,900 note. The consideration moving to the

Concerning the above, appellants state: “Mr. Price, as manager of the plaintiff corporation, admits he know of no consideration except that mentioned by the defendants, namely, to save Tom Woods arrest and compound a felony.” The testimony relied upon is not susceptible of such an interpretation, as the witness had not referred to any fact or circumstance from which such an inference even might "be drawn—in fact, his testimony, elsewhere given, was to the opposite effect. The answer of the witness, “I don’t know of anything else,” was in response to the question: “Well, he asked him if he knew of any other consideration, do you know of any other consideration they received?” The first sentence appears, by the use of the pronoun “he,” to have reference to Mr. Goldman, counsel for plaintiff; the second sentence, which in fact composed the question, was addressed to the witness; but an analysis of the preceding discussion between court and counsel leads to the conclusion that the remark of the court was addressed to Mr. Anaya, counsel for defendants, the pronoun “he” being either a typographical error or having been used inadvertently and the question being framed to meet a suggestion made by him. As the witness was under cross-examination by Mr. Anaya, and as Mr. Goldman was asking no questions, it is apparent that the remark of the court did not refer to the latter. While the initial question asked by Mr. Anaya did not refer to or mention directly the subject of “consideration,” seemingly it was so understood by Mr. Goldman for, immediately following, a remark was interpolated by him to the effect that they had several times stipulated as to what consideration they claimed was given, and they did not claim any other consideration; to which Mr. Anaya replied: “He (the witness) may have a new one.” This remark of Mr, Anaya, considered in connection with what immediately

In the case of Mar Shee v. Maryland Assur. Corp., supra, the court, speaking to the point as to when a fact is “proved” contrary to a presumption, says: “From the foregoing we deduce that a fact is proved as against a party when it is established by the uncontradicted testimony of the party himself, or of his witnesses, under circumstances which afford no indication that the testimony is the product of mistake or inadvertence; and that when the fact so proved is wholly irreconcilable with the presumption sought to be invoked, the latter is dispelled and disappears from the ease.”

Appellants complain of the action of the trial court in refusing an instruction proposed by them; but as the verdict of the jury was favorable to them, although subsequently disregarded by the court, no useful purpose would be sub-served by a discussion of the matter.

The findings of the court are amply sustained by facts and circumstances of the case, and the judgment is, therefore, affirmed.

Plummer, J., and Finch, P. J., concurred.