Duclos v. Walton

Loud, J. This is a suit in equity, brought by the plaintiff for an accounting, and to recover such sum as may be found 'due him from the defendant upon such accounting as trustee in the sale of certain real property. Briefly, the facts as disclosed by the record are these: That on the tenth day of August, 1885, the plaintiff borrowed of the defendant the sum of $750 for two years with interest at ten per cent, and secured the same by a mortgage on certain real property described therein; that neither the principal nor interest was paid when the same became due, and that in 1888, after the expiration of three years, and when the defendant was about to bring suit to foreclose the mortgage, the plaintiff, to avoid the expense legally incident to such proceeding, made and delivered to the defendant a warranty deed for said premises and at the same time the defendant made and delivered to the plaintiff a writing to the effect that if he should be able to sell said premises for a greater sum than the amount of the indebtedness on the note and mortgage, and the amount of any expense which he should incur in caring for and selling the same, then he promised and agreed to pay to the plaintiff all sums of money in excess of said indebtedness as aforesaid, reserving to himself sufficient and no more as should reimburse him for his debt and expenses; that on the twenty-first day of December, 1888, the defendant sold said premises to one Imus for a span of horses, a buggy and a promissory note for $1,000, and that he sold the horses and buggy for $300; but that before the notes were collected in full or any sum of money was in the hands of the defendant in excess of the amount of his debt and expenses, the present suit was instituted. [326] Upon this state of facts the plaintiff has brought this suit upon the theory that the whole transaction constitutes a mortgage with a power of sale, and that the defendant was trustee for the full sum for which the premises were sold, and liable for the same, less his debt and expenses. The contention for the defendant is, that the plaintiff has not pursued his remedy, which, when his right of action accrues, is at law and not in equity. He insists that by the terms of his contract he is not liable for any sum of money except such sum as is in excess of his debt and expenses incurred; and as this sum when received is a definite and ascertained sum, his remedy is at law for money had and received or for breach of his promise to pay. Looking at the whole tenor of the evidence, as we understand the transaction, the debt and interest was nearly or about equal to the value of the property mortgaged to the defendant; and for the purpose of avoiding the expense of foreclosure proceedings and making the property pay the debt and interest, the plaintiff conveyed by his deed the property absolutely to the defendant, who desiring only to be indemnified to the extent of his debt and interest, agreed to sell the property and give the plaintiff “ all sums of money in excess of his debt and expenses” incurred in selling it. He had a mortgage, and the deed would not be regarded as additional security. The evidence of both parties indicates that the deed was given and received to liquidate the debt; but as the defendant proposed to sell the property, not wishing to keep it, but to secure his money, he agreed if he could sell it for more than his debt and expenses, he would be responsible to the plaintiff for the surplus, and as evidence of his promise gave the plaintiff the writing that effect. In reference to giving the deed, the plaintiff says in his testimony that “it was his property — he had entire control of it,” — and that he trusted to his honor “to sell it to the best advantage,” etc.; but the fact is that it was not reliance upon his honor, but upon the written promise which the defendant gave him of his own accord, and [327] which promise is the ground of his complaint. The defendant put his promise in writing to avoid all question and to fix his liability, and to it and its terms we must look to determine whether this suit is well brought and can he maintained. He sold the property upon credit, as he had the undoubted right to do, and as must have been contemplated by the parties. The plaintiff could not pay his debt nor make any arrangements to do so by procuring the money for that purpose. He deeded the property to effect this object, and the defendant agreed to sell it and apply the money to the payment of his debt and expenses of selling, and then if there was any surplus to pay it over to the plaintiff. The defendant sold the property and took the notes upon time, which offset the interest upon the indebtedness of the defendant and enabled him to secure a better price for the property; but before the money was collected upon these notes, and before he had any sums of money in excess of his debt, interest and expenses, according to the requirements of the notes, this suit was brought. If it was brought before any right of action accrued under the contract, it was groundless as well as premature. The written engagement of the defendant was, that in case, he sold the land for a greater sum than such debt, interest and expenses (that was the standard fixed for his promise), “then” — runs the written promise — “I bind myself to pay him all sums of money in excess of his indebtedness as aforesaid, reserving to myself sufficient and no more as shall reimburse me for my debt and expenses.” It is “all sums of money in excess,” etc., and nothing else, which he obligates himself to pay. This would only happen and the liability occur when, after the sale of the property, money should come into his hands sufficient to liquidate the debt and expense and leave an excess or surplus. In the light of the circumstances, the provision evidently contemplates that the sale would be on credit to secure the best possible price for the property, and that when the credit had expired and the money had been received or at least [328] was due and sufficient to extinguish the debt and expenses, and there was any excess or surplus, it should be paid over to the plaintiff. In this view the plaintiff had a plain and adequate remedy at law when there was any surplus or any sums of money due him according to the promise. This is an express promise when there is any excess for a sum certain or capable of being rendered certain, for which a recovery at law can be brought, or an action for money had and received can be maintained. Such a count as the last is appropriate for the recovery of money which the defendant may have in his possession of right belonging to the plaintiff, although privity of contract is not necessary to support the count, for the law implies the promise1 to pay whenever the defendant has money in his hands the property of the plaintiff and which the defendant has no legal right to retain. It is clear, then, notwithstanding a suit was begun before any right of action accrued, and that the note was paid before the hearing, his remedy was at law and not in equity. The bill should be dismissed, and it is so ordered.