Whitmore v. Shiverick

Opinion by Beatty, C. J., Lewis, J., and Johnson, J., concurring. This was a bill filed to foreclose a mortgage upon what counsel — 297 — in the cause term a tract of land. The plaintiff alleges that in February and March, 1862, the defendant, N. Shiverick, was the owner of an undivided half interest in the property described in the mortgages set out in the complaint-; that being such owner or having such interest in the property, he executed two mortgages, one to the plaintiff, another to a third party who has since assigned to plaintiff. He makes N. Shiverick, Antoine. Laroche, and Peter Frothing-ham parties defendant, and prays a foreclosure and sale of the interest mortgaged to him. Frothingham answers, and states in his answer substantially that at the time the mortgages were executed, the property belonged to Sperry & Co., a firm composed of A. J. Sperry, N. Shiverick, E. P. Whitmore, (the assignor of one of the mortgages to plaintiff) and Thomas McFarland. That at the time of the execution of said mortgages the firm was insolvent, and they were executed for fraudulent purposes. That shortly after the execution of these two mortgages, judgments were had against the firm of Sperry & Co. for about $1,000. That the entire property of the firm (including this property, the undivided half of which Shiverick purports to have mortgaged) was sold under execution, a regular conveyance made thereof by the Sheriff, and that he (Frothingham) became the owner by purchase from the party who bought at Sheriff’s sale. He relies on his title thus derived from a Sheriff’s sale, as a defense to this action. Laroche disclaims all interest except as mortgagee of Frothingham. The cause went to trial in the Court below, and the Judge there found the following facts and conclusions of law: “ The property described in the mortgages sued on was, at the time they were executed, the copartnership property and assets of the firm of Sperry & Co., and of this fact the plaintiff, at the time the mortgage to him was executed, and E. P. Whitmore, at the time the mortgage was executed, had notice. “ Also, at those times, the firm of Sperry & Co. was embarrassed, pressed by their creditors, unable to pay their debts, and insolvent, and the said mortgagees respectively at the times they — 298 — took their mortgages, had notice of such embarrassment and inability to pay. “Also, in an action commenced and pending in the District Court of Ormsby County, Territory of Nevada, by E. Ruhling k Co. against Sperry k Co., to recover a copartnership indebtedness of the latter firm to the former, the summons was served upon J. A. Sperry, a member of the firm of Sperry k Co.; and on the twenty-first. day of April, a.d. 1862, E. Ruhling & Co. recovered judgment for the sum of $2,058.75 debt, besides $40.75 costs, which -debt was the amount then due and owing by said Sperry & Co. to E. Ruhling & Co., and accrued subsequent to August 18th,. A.D. 1861. “ Also, in an action commenced and pending in said District Court of Ormsby County by Hickok k Co. against said Sperry & Co.,to recover a copartnership indebtedness of the latter firm to the former, the summons was served upon J. A. Sperry, a member of the firm of Sperry k Co., and on the eighteenth day of April, a.d. 1862, Hickok k Co. recovered a judgment for the sum of $2,229.25 debt besides $57.15 costs, which debt was the amount then due and owing by said Sperry & Co. to said Hickok k Co., and accrued subsequent to August 13th, a.d. 1861. “ The said judgments were severally docketed and executions issued thereon to the Sheriff of Ormsby County, under which said Sheriff sold said property, on the thirtieth day of May, a.d. 1862, to McCullough & Ruhling, composing the firm of E. Ruhling & Co., for the sum of $4,698.29, which was paid by them and was the full value thereof, as well as the amount of said executions and costs; and after and upon the expiration of six months from the time of sale, said Sheriff executed a deed of said property to McCullough k Ruhling, composing the firm of E. Ruhling & Co., who thereafter sold the same to the defendant, Erothingham, and gave him possession, and the same has remained in his possession ever since, as owner thereof. “ The claims of other creditors of the firm of Sperry & Co. remain still unpaid. The property sold under said execution was the entire assets of the firm of Sperry k Co. During the time said liabilities of the firm of Sperry & Co. were incurred and the — 299 — said judgments recovered and sale made, the firm was composed of J. A. Sperry, N.- Shiverick (who is one of the defendants in the action) and Thomas McFarland, and they represented to the creditors of said firm that E. P. Whitmore was also a member of said firm, which representation the said creditors believed to be true. “ The notes and mortgages mentioned in the complaint were all executed out of the State and Territory of Nevada, and in the State of California, and the note and mortgage executed to E. P. Whitmore became due and payable on the twenty-eighth day of June, A.D. 1862, and the other note and mortgage became due and payable on the tenth of September, a.d. 1862, and no action was commenced on either until the commencement of this action. “ The conclusions of law upon the foregoing facts are that this action is not barred by the Statute of Limitations; that the said property and its full value was necessarily and properly applied to the payment of copartnership liabilities of Sperry & Co. to Hickok & Co. and E. Ruhling & Co.; that the purchasers of said property, under the execution in favor of Hickok & Co. and E. Ruhling & Co., and those holding under them, are entitled to hold said property free and clear of any and all incumbrances by virtue of said mortgages, or either of them, and that said mortgages, or either of them, cannot be enforced against said property. “ Let judgment be entered accordingly. “ R. S. Mesick, District Judge.” The findings of the Court were filed December 6th, a judgment entered up December 7th, and on December 8th a paper was served by the appellant (plaintiff in the Court below) on respondent’s counsel which may, we suppose, be properly termed a notice of motion for a new trial, although not in the usual form of such notice. This notice does not seem, however, to have been followed up by any statement whatever on motion for a new trial. On the twenty-seventh of the month a statement on appeal was filed. This, it will be seen, was many days after the time for statement on motion for new trial had expired. On the fifth of January, 1867, the motion for a new trial was called up and overruled. On the nineteenth of January, 1867, a statement on appeal from the order overriding the motion for a neto trial was filed by appellant. — 300 — The first question to be determined is, what figure do these statements cut in the case ? The first statement as a statement on appeal, which is clearly contemplated by the statute, was made in time, and if it shows any such error as can be reviewed where there is no motion for a new trial, it is sufficient to reverse the case. This statement we will hereafter notice. The second statement can serve but one purpose; that is, to show that the Court committed some error in overruling the motion for new trial. We cannot mix up the two statements, taking portions of one to help out the other. There are here two separate and distinct appeals — one from the judgment, the other from the order overruling the motion for a new trial. Let us first examine the latter. Before a District Court can regularly grant a new trial two preliminary steps are necessary. First, there must be a notice served on the adverse party that a motion for that purpose will be made. Second, that notice must be followed either by affidavit or else by a statement showing the grounds upon which such motion will be based. The statute declares that if such affidavit or statement is not filed within the prescribed time, “ the right to move shall be deemed waived.” In this case, “ the statement on appeal from the order of the Court overruling the motion for a new trial ” totally fails to show that there was either an affidavit or a statement filed in support of the motion. Consequently the Court did not err in overruling the motion for a new trial. The Court could not grant the appellant’s motion when by his own conduct he had waived the right to move for a new trial. This latter statement then, not being available to show that the Court erred in overruling the motion for a new trial, ceases to be a paper of any importance in the case. As we have already substantially said, it cannot be appended to and made a part of the original statement on appeal. That statement had to be made within twenty days after judgment. If no amendments were offered it could not be patched up by another statement made more than forty days after judgment. The latter statement would properly include only such things as accrued subsequent to the trial and pending the motion for new trial. If it contains other matter, it is surplus-age and must be disregarded. Having disposed of the appeal from — 301 — the order overruling the motion for a new trial, let us now examine the appeal from the judgment. The statement on appeal commences in this way : “ The plaintiff’s statements on appeal from the judgment in this eause: The ground upon which the plaintiff will rely on appeal is the evidence, findings, and decision of the Court that the mortgaged premises set out in the complaint herein at the time the mortgages were executed were the partnership property, and the assets of the firm of Sperry & Co.” If we give to this language its literal meaning, it shows that the evidence established just what the appellant complains was not established, to wit: that the mortgaged property was partnership property at the time of the Sheriff’s sale. We presume (though the language used does not convey the idea) the appellant meant to complain that the finding of the Court to the effect stated was not supported by the evidence in the case. Overlooking the error in this part of the statement, let us see how the remainder of the statement is made up. Immediately following whatwe have before quoted and commented on, is the following language: “ and that the mortgages [mortgagees] severally had notice thereof; that the said company was insolvent, of which said mortgagees had notice, all the evidence in the case tending to prove the tenure by which said company held said property, and plaintiff’s notice thereof and of the company’s indebtedness, is the deed from J. S. Henning to J. A. Sperry and N. Shiveriek, conveying said property to them, which deed was introduced in evidence at the trial, a copy of which is herein contained and made part hereof; the depositions of said Sperry and Shiveriek in evidence, copies of which are herein set out and made part hereof. In addition to this evidence, the plaintiff testified that the consideration of the notes and mortgages was money advanced for and used in improving the mortgaged property and in paying the debts of Sperry & Co., which advances were made prior to the indebtedness to Hickok & Co. and E. Ruhling & Co., and that he, the plaintiff, did not know of the embarrassment of Sperry & Co. until after the expiration of these mortgages; and that E. P. Whit-more had no knowlege of the condition of the affairs of Sperry & Co. — 302 — “ And in the further error of the Court, in its findings and decisions, that in the said proceedings of E. Ruhling & Co. and Hickok & Co. against Sperry & Co., the title to or interest in said mortgaged premises of N. Shiverick and his mortgagees passed to the-purchaser under such proceedings at Sheriff’s sale, etc., without any process or summons having been served on said Shiverick and his mortgagees, and it being in evidence that no process was ever served in either of said proceedings on any of the persons made defendants therein, except on said Sperry. (Deed from Henning to Sperry & Shiverick, to wit.)” After this follow the deed, an agreement, several depositions, etc.? all seeming to have been documentary evidence in the cause. The statement then winds up as follows: “And the plaintiff says the foregoing statement contains all the evidence in said case tending to prove the tenure by which said Sperry and said Shiverick held the mortgaged property described in the complaint, or of the notice of the plaintiff, or said E. P. Whitmore of the pecuniary position of the firm of Sperry & Co. at time of accruing of the indebtedness mentioned in the complaint, or at the time of the execution of said mortgage.” The first question is, does this statement negative the idea that there may have been before the Court below sufficient evidence to show that Sperry & Co. were the owners of the property in dispute at the time they were so found to have been by the Judge who tried the case ? If we give a very liberal interpretation to the language used, perhaps it does. But the language is extremely confused, and not clearly intelligible. The statement is ex parte, never served on the opposite party, no amendments • offered thereto, and not settled by the Court. Such a statement is allowed by the statute. Statements on appeal are (probably by an oversight of the Legislative branch of the Government) not required to be served. But whilst such a statement must be tolerated, it should not be allowed to establish more than is clearly stated. We should hesitate then to hold that this statement was sufficient to authorize this Court in saying the first finding of fact by the Court below is not supported by the evidence. But if this part of the statement had been ever so clear and explicit, there is another — 303 — objection to reversing the judgment on the ground that the findings are not sustained by the evidence. Our Practice Act was copied almost verbatim, from the California Practice Act as it stood at the time ours was enacted. Under the California code of practice, the Supreme Court of that State had almost uniformly refused to review the facts of a case unless there had been a regular statement and motion for new trial. (See Brown v. Graves, 5 Cal. 119-20; Brown v. Tolles, 7 Cal. 399; 8 Cal. 108; 15 Cal. 380; Gagliardo v. Hoberlin et al., 18 Cal. 394.) The only conflict that we can discover in the California cases on this point, was in holding, in some instances, that the rule did not apply to actions of equitable cognizance, but was confined to those of a strictly legal nature. Rut finally this distinction ceased to be recognized, and in the last case cited was distinctly overruled, and since then the rule made applicable to chancery cases and actions at law. We deem it best to follow the practice thus established in California, and think it especially appropriate that the practice should be established in a case of this kind, when it is so extremely doubtful if the statement would aid the appellant, even if we were to decide that we could review the facts of the case on tile statement on appeal, without any previous motion for new trial. Whilst the party that complains that the verdict of a jury or the finding of the Court is against the evidence in the case must present that particular point by motion for new trial, or it cannot be looked into in this Court, we do not mean to say other errors committed in the progress of a trial may not be brought up either upon a bill of exceptions or upon statement on appeal. Doubtless most errors committed during the progress of a trial may, at the option of the appellant, be first brought under review in the Court below upon motion for new trial, and upon that Court refusing relief, be reviewed here on appeal from the order refusing a new trial; or they may be ■brought directly before this Court on an appeal from the judgment. This Court can look into bills of exception, statement on appeal, the findings of the Court and the judgment roll, for the purpose of correcting errors shown by any of these records. . But for the purpose of setting aside a verdict or finding on the ground of its not being sustained by the evidence, it can only look to a statement on motion for new trial. — 304 — Having disposed of the statements in this case, it only now remains to determine whether the judgment of the Court below is justified by the pleadings and by the findings of fact by the Court. The findings of fact by the Court say the property in dispute was, at the time the mortgages were executed, “ the copartnership property and assets of the firm of Sperry & Co.” Section 32 of the Practice Act is as follows: “Where the action is against two or more defendants, and the summons is served on one or more, but not on all of them, the plaintiff may proceed as follows: First, if the action be against the defendants jointly indebted upon a contract, he may. proceed against the defendant served, unless the Court otherwise direct, and if he recover judgment it may be entered against all the defendants thus jointly indebted, so far only as that it may be enforced against the joint property of all, and the separate property of the defendant served: or second, if the action be against defendants severally liable, he may proceed against the defendants served, in the same manner as if they were the only defendants.” In this case the suits of Ruhling & Co. and W. B. Hickok & Co., on whose judgment the property was sold, were commenced against N. Shiverick, A. J. Sperry, Thomas McFarland, and E. P. Whitmore, composing the firm of Sperry & Co. The summons was served on A. J. Sperry only, and judgments taken against him personally and against the joint property of Sperry & Co. The first question is: does the finding of facts show that this property, at the date of their judgments, was the joint property of Sperry & Co. ? It appears to us it does. The language of the finding does not use the word joint, but it says copartnership property and assets. Collyer on Partnership, Sec. 123, p. 108, quotes approvingly this language from Lord Hardwicke: “ The partners themselves are clearly joint tenants in the stock and effects. They are seized per my etper tout.” Finding that this property was copartnership property was in effect finding it was the joint property of the partners composing the firm of Sperry & Co. But even if there was a question about copartnership property and assets being technically joint property, still it was clearly joint property as — 305 — contemplated by the thirty-second section of the Practice Act. The very object of that Act was to authorize a judgment, after service of summons on one member of a trading or manufacturing firm, which would reach the entire partnership property. We think the finding of the Court here sufficiently shows this property was subject to an execution against the property of Sperry & Co. Holding, then, that Sperry & Co. were the joint owners of the property up to the time of the execution of the mortgages, the question naturally arises: what effect did the execution of these mortgages have upon the property ? When two or more parties hold property by joint title, and one of the joint owners conveys his interest, the joint tenancy is immediately destroyed. So too, it is said that if one of the joint tenants mortgages his interest in fee, this will destroy the joint tenancy. (See Hilliard on Mortgages, vol. 1, p. 12.) This latter proposition, however, we are inclined to doubt, or rather to think too broadly expressed. Where the title to mortgaged premises rests before foreclosure, seems to be one of those points on which neither Courts nor commentators agree. The decided preponderance of opinion, however, seems at this day to be in favor of the proposition that the title does not pass from the mortgagor before breach of condition. By many it is held that even after breach of condition the title still remains in the mortgagor until foreclosure. We are satisfied the best authorities hold that the title remains in the mortgagor until breach. If the fee remains in the mortgagor until breach, we do not see on what principle it can be held that a mere mortgage, not changing the fee of the property, should destroy a joint tenancy. We are not disposed to hold a proposition so apparently against principle, upon the mere opinion of Mr. Hilliard, however respectable that may be, without some judicial decision to sustain him. Hilliard cites Powell on Mortgages (a work we have not at hand) to support his opinion. Whether Powell is supported by any judicial decision we are unable to determine. The reasons for holding, in this case, that a mortgage by one of the joint tenants should not have the effect of destroying the tenure by which the partners hold the property, are much stronger than in — 306 — an ordinary ease of joint tenancy. Partners are only quasi joint tenants; or to speak more accurately, it may be said that partners are joint tenants whose rights and duties are qualified in many respects by the law merchant. The right of survivorship exists only in a limited and qualified manner. A surviving partner takes the property, and may sell and dispose of it for the purpose of settling the partnership affairs. But unlike other survivors, (who take the joint property for their own use) after the partnership affairs are settled he must account to the representative of the deceased partner for his net interest in the partnership effects. On the other hand, ordinary joint owners may at their pleasure sell their joint interest and thus destroy the joint tenancy. A partner cannot sell his interest in the partnership property, so as to deprive his cotenants of their lien on the property for partnership debts or liabilities due from the party selling. As the mortgages in this case were given on partnership property, and with a full knowledge on the part of the mortgagees that it was partnership property, Ave think they did not change the tenure by Avhich the property was held, and that it was liable to be sold under any execution which was legally issued against the property of Sperry & Company. But it is contended by appellant that there was no legal execution against Sperry & Co., because Ruhling & Co. and W. B. Hickok & Co. sued Sperry & Co., consisting of four members,-and the findings in this case show that the Sperry & Co. who were interested in the property in dispute only consisted of three members. We think this is hardly a correct view of the case. Ruhling & Co. and Hickok & Co. sued the Sperry & Co. who were erecting a mill and transacting business with them. Of this company, beyond all question, A. J. Sperry was one member. In their complaints they allege that Shiveriek, McFarland and Whitmore were also members of that firm. The Court in this case find they were mistaken as to Whitmore being a member; that only the three first named were partners in the firm. Now.it appears to us that was an immaterial fact, and ought not to have been investigated in this case. Sperry was served with summons and was bound to make his defense or ever after hold his — 307 — peace. He might have shown that he never made a contract or contracted a debt to the plaintiffs jointly with Whitmore, and this would have been a good defense to the action unless the plaintiffs had by leave of the Court amended their complaint (as they could have done under our statute) and stricken out the name of Whit-more. But Sperry made no such defense to the action, and consequently the judgment was good against him. It would be strange indeed if a stranger to the proceedings could be allowed to come in at this late date and make a defense for Mr. Sperry, which he declined to do for himself when he had an opportunity, four or five years since. The judgment, so far as it is a complete judgment, is only against Sperry. So far as it affects the joint property it only reaches it through Sperry as one of the members of the firm of Sperry & Co. The execution could only be levied on the individual property of Sperry and the joint property of the company which he represented. If Whitmore was a member of that company it was right that his interest in the joint property should be sold; if he was not, certainly a judgment against the property of the firm did not hurt him. Here the executions were levied on property which the Court finds belonged to Sperry & Co. That is, to that firm of which A. J. Sperry (who was served with summons) was a member, and with which Ruhling & Co. and W. B. Hickok & Co. had dealings. If it belonged jointly to that firm, it was wholly immaterial whether' the firm consisted of three or three hundred persons. The judgment of the Court below must be affirmed.