Gascoigne v. Timmons

Gager, J. From the statement of facts it appears, in brief, that the defendant’s counterclaim is based upon the theory that he was the purchaser of the described land from the plaintiff, subject to a mortgage of $5,000, that because of the request of the plaintiff defendant did not record the deed, and that thereby plaintiff was enabled to and did convey good title to a third party, whereby defendant lost the benefit of his bargain, — for which he claims damages on the ground of a breach of *216 the contract of warranty. The court found that the deed, absolute in form, was intended as a mortgage to secure a nominal loan of $1,000, only $500 of which was in fact loaned, and that of the $500, $300 only remains unpaid; that by mutual agreement the deed was not recorded; that defendant knew all about the sale, which occurred soon after the deed in question, and never spoke about it to plaintiff or made any claim for damages until he brought this action in 1918. Nearly all the reasons of appeal are based on claimed errors of the court in finding the subordinate facts leading to the ultimate conclusion of fact that the deed of December 18th, 1913, was in effect a mortgage. As is not unusual, the opinion of counsel seems to differ entirely from that of the court as to the conclusions of fact to be drawn from the evidence. It is claimed that the court has found many essential facts without sufficient evidence, and has refused to find the facts as claimed by the defendant when there was sufficient evidence to support them and no adequate evidence against them. It is of no advantage to rehearse the details. We have carefully read the entire transcript of testimony and are satisfied that the court was fully justified, was in fact compelled, by a reasonable consideration of the testimony, to find that the transaction was not one of sale, as alleged in the counterclaim, but was one of mortgage by absolute deed, and for a different and much smaller amount than the consideration alleged in the counterclaim. Indeed, after the testimony of the defendant, we do not see that there could be any question as to the nature of the transaction. In relation to the deed which is the subject of the counterclaim, the defendant testified: “At that date Gascoigne called on me in regard to securing a loan of $1,000 for some particular business which he wanted to enter into. . . . He said that he wanted to borrow the $1,000 and that *217 the only credit he could give me, or the only property that he owned at that time that he could turn over to me would be a deed of a piece of property at Riverside, and I gave him the money and he gave me the deeds. Q. Just a moment. Was anything said by you or by him in respect to or in regard to any other sums of money which you had given him? A. Well, he said he would gradually pay those off. Q. What did you say to him about those sums and what did he say to you? A. Well, he simply said he would straighten up his account as soon as he could, and wanted to know if he could borrow this money. I said yes, I would loan it to him. . . . Q. Well, as a record of that transaction did he give you a deed? A. He did. ... He said, ‘Now, I will give you this deed, but don’t record it.’ I said, all right. ... I didn’t record it. ... I simply put it in the safe and forgot about it, . . . and it remained there -until about the time of the beginning of this action. ” Here it is to be observed that the talk was about a loan, about the paying off of a loan, and, finally, that he would loan the $1,000, which is the $1,000 described in the finding. There is no error in the finding. The defendant also appeals because, after having found that the transaction was a mortgage and that $300 of the loan remained unpaid, the court did not render judgment for this $300 as damages under the counterclaim. An inspection of the counterclaim, summarized in the statement of the case, for the purpose of answering this claim, shows that no issue was tendered by the counterclaim, the answer to which by any possibility could be the recovery of a balance of indebtedness. The defendant was claiming that there was no indebtedness whatever, that it had been converted into consideration for the deed of the land, and that the action was for the “recovery of the property and the value thereof and the profits to be derived therefrom, ” *218 as stated in the counterclaim. The theory of the case is that the debt has been discharged and under it whatever can be recovered is to be recovered not as a debt or a balance of account, but as a damage to property which was deeded to the defendant and accepted by him as payment of the debt, such damage to be determined by the difference between the value of the land at the time it was sold, which appears to have been about $9,000, and a mortgage of $5,000, which appeared to be assumed in the deed. This was the defendant’s claim in the trial court to the end, and the defendant’s draft-finding and his claims as stated therein show this conclusively. The finding of the court shows that defendant had filed a second counterclaim for the balance due from the plaintiff to the defendant upon this debt, which he withdrew at the trial, and, further, that the defendant made no claim at the trial for any balance due on the loan made by him to the plaintiff. The counterclaim presents no possible phase of a mortgage relationship, and such a relationship is repudiated up to the time of the judgment. Manifestly, it would be fatal to the whole theory of the counterclaim to admit that the deed was a mortgage. On the pleadings and issues raised and tried, we think no judgment for a balance of a debt could be rendered, and, further, the question was not raised before the trial court prior to the judgment. Evidently, by withdrawing his counterclaim for balance due, the defendant intended to stake his case solely on a claim for damages for breach of warranty in the deed of sale, under the claim that he had become the owner of the land as between him and the plaintiff, and no claim whatever based upon a mortgage relationship was ever presented to the court. There is no error. In this opinion the other judges concurred.