Trimmer v. Fish — 39 N.Y. St. Rep. 58

Majority

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Sylvester Trimmer, App’lt, v. George T. Fish et al., Resp’ts.

(Supreme Court, General Term, Fifth Department,

Filed June 2, 1891 )

Headnote

, Mortgage—Foreclosure—Rights of purchaser—Agreement.

In an action on two promissory notes, made by defendant F., and endorsed by his wife, and delivered to one L., who assigned them to plaintiff after maturity, no denial of the facts, but a counterclaim was set up, alleging that at the time the notes were given, premises belonging to Mr. F. had been advertised for sale under foreclosure of a $3,000 mortgage; that there was a second mortgage of $240 on the premises; that the second of the notes in suit was given for an indebtedness of defendant F., for which she was not liable; that to induce her to endorse this note, and to induce F. to produce the endorsement, L., assignor of plaintiff, agreed with the defendants that he would buy the said premises at the foreclosure sale, and procure a loan thereon of the amount which it would be necessary to use in payment of the purchase price, the second mortgage, and the two notes, and then convey the same to the defendants and take from ■ them a second mortgage for the balance, if any, over and above said loan; that, relying upon such agreement, defendant F. procured and Mrs. F. made the endorsement of the second note, and permitted L. to purchase the premises, which he did, but refused to convey to defendants; that it was worth more than the amount given by L. The defendant F. testified to conversations with L., during which the alleged agreement was made. He was partially corroborated by his wife, but contradicted by L. and a witness who was present when the notes were made and endorsed. Evidence was also given, and not contradicted, that F., not relying upon the agreement, personally forbade L. to bid at the sale. Held, that the counterclaim was not clearly established by the evidence, and that a motion for a new trial should be granted.

Appeal by plaintiff from a judgment of the county court of Monroe county entered on the verdict of a jury, and from an order denying plaintiff’s motion for a new trial on the minutes of the court.

Mr. Turk, for app’lt; D. N. Salisbury, for resp’ts.

—The action was against the defendant, George T. Fish, as maker, and the defendant, E. Louisa Fish, as endorser of two promissory notes, one for $190.93 and one for $108.50,

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made, endorsed and delivered to one Arthur W. Lawton, and by him transferred to the plaintiff after maturity. . There was no denial of the facts establishing the plaintiff’s cause of action, but an affirmative defense, denominated a counterclaim, was interposed first by the joint answer of the two defendants and afterwards by the separate amended answer of the defendant, Mrs. Fish. Those answers contained allegations to the effect that at the time the two notes were so made and endorsed, Mrs. Fish was the owner of an equity of redemption in certain real estate in the city of Bochester; that prior to that time a judgment had been obtained by one Holden foreclosing a certain mortgage on such real estate for $3,000 and interest, and that the premises had been advertised to be sold, on such judgment, on the day after the notes were delivered; that at the same time there was a second mortgage on the premises outstanding and due, given by the defendant, Mrs. Fish, to one Charles F. Lawton, for $240 and interest; that the second of the notes in suit was given for an indebtedness of the defendant, George T. Fish, but for which the defendant, Mrs. Fish, was not liable; that to induce the defendant, Mrs. Fish, to endorse the second note, and to induce the defendant, George T. Fish, to procure her endorsement", “ the said A. W. Lawton undertook and agreed with the defendants herein that upon such sale of said premises under the judgment so advertised to take place he would buy the same and thereafter procure a loan thereon of funds which it would be necessary, in whole or in part, to use in payment of the amount of the purchase price thereof, and the said mortgage of $240, and the said two notes, and then convey the same to these defendants, and take from them a second mortgage upon the same for the balance, if any, over and above the said loan so to be procured, remaining unpaid upon the said mortgage for $240 and the said two notes; ” that relying upon such agreement the defendant George T. Fish procured and the defendant Mrs. Fish made the endorsement of the second note; that on the sale, as so advertised, A. W. Lawton bid off the property for the sum of $3,700; that the defendant George T. Fish .was present at the sale, but “ relying upon the agreement by Law-ton refrained from bidding thereon, and permitted the said Lawton to purchase the said premises.” The answers further allege that after bidding off the property as aforesaid, A. W. Lawton directed the conveyance of the same to be made to one A. L. Lawton, his brother; that A. W. Lawton has never conveyed the premises, nor caused them to be conveyed to the defendants, but has always neglected and refused so to do upon request. There is also the allegation that at the time of the sale the premises were worth more than the amount for which the same were sold on the foreclosure sale, and the amount due on the mortgage to Charles F. Lawton and upon the two notes.

There was no other allegation of damage sustained by the defendants by reason of the breach of the agreement of Lawton, but the case was tried without objection, upon the theory that a counterclaim in behalf of both defendants had been pleaded, and it was submitted to the jury upon the single question whether

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the agreement alleged in the complaint was established by the evidence.

On that question we think the verdict was clearly against the weight of the evidence, and that the motion for a new trial ought to have been granted. The defense was strictly affirmative, and the burden of proof was on the defendants. The strength of their case is in the testimony of the defendant George T. Fish, which is as follows: “ I had a conversation with Arthur W Law-ton ; I think it was on the street, but I am not positive; lie • wanted the endorsement of my wife, and also her mother; I told him I could, not give the endorsement of her mother; that she-was not well, and I would not ask it of her; he said he would do as he talked; He would attend the sale and bid in the property and give us a chance to pay off; and I told him that perhaps Mrs. Fish would endorse it, but I would not ask her mother to, and he said, ‘ very well, let her endorse it,’ and he would do as we had talked.

“ Previous to this time we had talked several times in reference to the sale of this property, which was advertised to take place January 22d. He said he would help us out on that; he said he had some money in the bank, several hundred dollars, and would save some for that purpose; I told him that if he would do that and bid it in, I would include the whole indebtedness to himself and his brother; that his brbther had a claim of about $100,1 thought, a balance on an old note; that he could put that in, and also the second mortgage which was given to another brother, Charles F. Lawton, and he said he would take a second mortgage for the whole indebtedness; he would get the first mortgage for what he could, and would put in some money, if necessary, and take a second mortgage, and give us an opportunity to pay for it That was the conversation to which he referred on this day in question.”

This evidence, at the best, but sparingly supports the allegation of an agreement on the part of Lawton to purchase the property on the foreclosure sale, to raise money sufficient, if possible, to pay the purchase price and the second mortgage held by Charles Lawton, and the amount of the two notes by a loan secured by a new first mortgage on the premises, and then to convey to the defendants upon being reimbursed, or secured by a new second mortgage on the same premises, for the amount by which the sum of those payments to be made by him should exceed the amount of the loan he might obtain on the premises; and all this in consideration, merely, that Fish should procure his wife’s endorsement, on the second of the two notes for $108.50. The testimony of Fish is but partially corroborated by that of his wife, the other-defendant, and it is directly contradicted in all its parts by that of Lawton, which is corroborated by that of his brother, A. L. Law-ton, who testifies that be was present at the time the endorsement of Mrs. Fish to the second note was procured, and to the agreement under which it was done.

But aside from the direct evidence on the question in dispute, and of which it cannot fairly be said that the preponderance is in.

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favor of the defendants, the circumstantial evidence to the contrary is very strong. It is highly improbable that Lawton, upon the sole consideration of obtaining the endorsement of Mrs. Fish to a note of $108, would have made the agreement alleged. It involved the giving of his personal bond secured by a mortgage on the premises to be purchased, for an amount sufficient to pay the purchase price, whatever that might be, even to the full value of the property, and the second mortgage of $240, and the amount of the two notes; or if he should be unable to obtain a loan to that extent on the property, he must advance the money required and depend tipon the second mortgage on the same property for its reimbursement. And the noticeable thing about the arrangement is that in no event was he to realize any profit whatever from the transaction. All that he could hope for was to secure the payment of his two notes, for the larger of which Mrs. Fish was already liable and if any gain was to result it would be the defendants, and not his.

Moreover, the conduct of the defendant Fish, at the sale, was entirely inconsistent with the theory of the defense as to the agreement of Lawton. The uncontradicted evidence is that at the sale, so far from relying upon Lawton to purchase the property, Fish was there attempting to prevent the sale; he read a paper which declared that the sale was irregular, and warned all persons against bidding; and he personally forbade Lawton to bid on the property.

The affirmative defense alleged and relied upon was clearly not established by the evidence on the trial, and the motion for a new trial should have been granted.

Macomber, J., concurs.

Judgment and order appealed from reversed and a new trial granted, with costs to abide the event.