Salter v. Krueger

Oassoday, J. The note and mortage were given for the aggregate amount of a debt due from Emery to the defendant and another debt due from Emery to Ott. Both were taken in the name of the defendant alone. Ott was not mentioned nor referred to in either. He was present and participated in their procurement, but otherwise was not a party to the transaction. Evidently Ott constituted the defendant his trustee of an express trust. Sec. 2601, E. S. Assuming the rightful execution of the note and mortgage, then they were enforceable in the name of the defendant alone without making Ott a party. Ibid.; Waterman v. C., M. & St. P. R. Co. 61 Wis. 468; Poor v. Guilford, 61 Am. Dec. 749; Johnson v. Catlin, 62 Am. Dec. 622. This being [222] so, we think he was not a necessary party to this action, having no other purpose than to avoid the note and mortgage. Emery was not present when the note and mortgage were made. lie had weeks before absconded with a large portion of the partnership ¡n-operty. He was not a party to the transaction, and it was consummated without any authority from him. The contract sought to be avoided was wholly between the plaintiff and the defendant. True, the plaintiff was induced to execute the papers in the firm name. But the firm property was first liable to the payment of the firm debts and the settlement of the copartnership. It was only so much of the partnership property as might remain after such payment and settlement that could be properly divided between the partners. It was only Emery’s share of such remainder that could be reached by his individual creditors. The plaintiff was not liable for such debts, nor was his share of such remainder. By giving the note the plaintiff voluntarily promised to pay to the defendant the amount due to two of Emery’s individual creditors. The only other perceivable effect of the transaction, assuming it to have been binding, was that the plaintiff thereby voluntarily secured said note by mortgaging to the defendant whatever remaining interest he might have had in the firm propertjr after the settlement and payment of all the firm debts. Such interest could not otherwise have been reached by the defendant or Ott by virtue of their respective claims against Emery. In this action, to avoid that promise and pledge, the defendant, and Ott, through him, and the plaintiff, seem to be the only parties interested. "We must hold that Emery was not a necessary party plaintiff or defendant. The facts stated seem to be sufficient to constitute a cause of action. The note and mortgage were given without any consideration whatever. They were in no sense for the plaintiff’s benefit, but greatly to his disadvantage. They [223] were procured by misrepresentation, circumvention, and imposition. Tbe plaintiff is an infant, and be brings tbis action by bis guardian ad litem, for tbe sole purpose of avoiding his note and mortgage so improvidently given. Upon tbe facts stated, bis right to avoid them by reason of bis infancy cannot well be doubted. ITe certainly might have successfully resisted tbe enforcement of them collection by defendant. Even bad tbe defendant acquired tbe possession of tbe mortgaged property under tbe mortgage, still tbe plaintiff might have disaffirmed tbe contract and replevied tbe property or recovered its value. Miller v. Smith, 26 Minn. 248; Corey v. Burton, 32 Mich. 30; Stafford v. Roof, Ewell’s Lead. Cas. 93, and notes. Tbe more serious question is whether tbe facts stated are sufficient to authorize equitable interference. ’Without attempting any discussion, we are constrained to bold that tbe facts stated are sufficient to constitute a good cause of action in equity. Tbe note and mortgage were not void, but merely voidable. Tucker v. Moreland, 10 Pet. 72; S. C. Ewell’s Lead. Cas. 135; Chapin v. Shafer, 49 N. Y. 407; Jones on Chat. Mortg. § 40, and cases there cited; Callis v. Day, 38 Wis. 643. Besides, tbe mortgage was on file, and hence constructive notice to everybody that tbe defendant claimed tbe mortgaged property by virtue of tbe mortgage. Tbis being so, it was a standing menace to any who might otherwise be willing to become purchasers.- That it would seriously interfere with, if it did not entirely prevent, tbe sale of tbe property by tbe plaintiff, no one will doubt. In Tucker v. Moreland, supra, Mr. Justice Stoet, after learnedly discussing tbe effect of a deed given by an infant, concluded that: “Tbe general result seems to be that, where tbe act of tbe defendant is by matter of record, be must avoid it by some act of record during bis minority; but if tbe act of tbe infant is a matter m pais, it may be avoided by an act in pais of equal solemnity or notoriety; [224] and this, according to some authorities, either during his nonage or afterwards, and, according to others, at all events after his arrival of age. ... In short, the nature of the original act or conveyance generally governs as to the nature of the act required to be done' in the disaffirmance of it. If the latter be of as high and solemn a nature as the former, it amounts to a valid avoidance of it. We do not say that in all cases the act of disaffirmance should be of the same or of as high and solemn a nature as the original act; for a deed may be avoided by a plea; but we mean only to say that if the act of disaffirmance be of as high and solemn a nature, there is no ground to impeach its sufficiency.” We do not here say that the principle thus announced is of universal application, but it furnishes a strong reason for entertaining this suit for the purpose of placing on record a substantial disaffirmance of the mortgage filed, which is of record. Besides, the plaintiff having given the mortgage, and it not being absolutely void, but merely voidable, there may be a question whether he could sell the property against the will of the defendant without subjecting himself to the punishment prescribed in sec. 4467, R. S. It may be that the incapacity to bind might preclude any intent to defraud in subsequently making a sale to avoid the mortgage. For a discussion of the question, see State v. Plaisted, 43 N. H. 413. But assuming .that section to be inapplicable, still we are constrained to hold that the facts stated justified equitable interference. By the Oowrt.— The order of the circuit court is affirmed.