Male v. Schaut

Mr. Ceoef Justice Bean, after stating the facts, delivered the opinion of the court. The principal contention is that the judgment is based upon findings of fact not within the issues made by the pleadings. The execution and delivery by the defendants of the note sued on to Telford, at the date and as alleged in the complaint, the giving of a mortgage to secure its payment, and its sale and tranfer for a valuable consideration to the Trust Company, on March 1, 1893, and.before maturity, are either affirmatively alleged or admitted in the pleadings. The de [429] fense is that, prior to the sale and transfer of the note by the Trust Company to the present plaintiffs, the mortgage given to secure its payment had been foreclosed in the suit brought by Alford to foreclose a prior mortgage, and the mortgaged premises sold, under the decree rendered therein, for sufficient to satisfy the amount due on the note and mortgage. The plaintiffs deny that the Trust Company was a party to the Alford foreclosure suit, or in any way bound by the decree therein, and allege that the answer or cross complaint filed therein on the company’s behalf by Soper was without authority. The material issue of fact, therefore, was the validity of the alleged foreclosure decree; and that depended upon whether Soper, who assumed to appear for and represent the Trust Company in that suit as its attorney, had authority to do so. If his appearance was unauthorized, the decree was not binding on the Trust Company, or its successors in interest: Handley v. Jackson, 31 Or. 552 (50 Pac. 915, 65 Am. St. Rep. 839). The court found that Soper’s appearance was without the knowledge or authority of such company, but that, after the purchase of the note in controversy by the plaintiffs, they ratified and approved Soper’s acts, and thus became bound by the deci’ee. This, however, was a matter wholly outside of the issues made by the pleadings. If defendant intended to rely upon the ratification of an unauthorized appearance of an attorney, such ratification should have been pleaded, and the plaintiffs given an opportunity to meet the issue thus raised. It could not otherwise be made the basis of a judgment in this action. It is elementary law, that a finding of fact by a court out side of the issues made by the pleadings is a mere nullity, and will not sustain a judgment: Green v. Chandler, 54 Cal. 626; Brenner v. Bigelow, 8 Kan. 496; Newby v. Meyers, 44 Kan. 477 (24 Pac. 971); Gamache v. School Dist. 133 Cal. 145 (65 Pac. 301). In the last case referred to, certain findings were contrary to the admissions in the pleadings, and others were entirely outside of the issues; and it was held that the judgment should be reversed, and the cause remanded, with directions to allow all the parties [430] to amend their pleadings. This rule, we think, can be applied to the case under consideration, except that under our practice the question as to whether the pleadings shall be amended must in the first instance, be determined by the trial court in the exercise of judicial discretion. Judgment reversed, and cause remanded for such further proceedings as may be proper, not inconsistent with this opinion. Reversed.