Union St Ry. Co. v. First Nat. Bank

Mr. Justice Bean, after stating the facts, delivered the opinion of the court. 1. The complaint is based upon the theory that the bonds in controversy were and are the property of the Union Railway, the predecessor in interest of the plaintiff, and were only deposited with the defendant bank for safe-keeping until they could be sold and disposed of for and on account of the company; that no sale thereof has ever been made, and therefore, in equity, they belong to the plaintiff, as the purchaser of the property covered by the mortgage given to secure the payment thereof. The reply alleges and sets up that at the time the plaintiff’s promoters or incorporators purchased the railway property, the defendant bank, through its president, W. T. Wright, represented that the bank had in its possession all the outstanding bonds issued by the railway, and “guarantied” that, if they would purchase the property for $10,500, the bank would deliver up the bonds for cancellation; that, relying upon such representations and promise, the purchase was made, and the money afterward paid to the bank; and that, if it had any claim or lien upon the four bonds, the same has thereby been fully satisfied and discharged. The decree of the court is based on the theory, however,- that, although the [611] bonds came into tbe possession of the defendant bank in dne course of business, it is estopped by the conduct and representations of its president to enforce its lien thereon to the prejudice of the plaintiff. The reply is a clear departure from the cause of suit set up in the complaint. By the complaint, the plaintiff bases its right to a decree upon the fact that all of the twenty bonds issued by the Union Railway were held by Shelton in trust, and deposited by him with the defendant bank for safe-keeping until they could be sold; that none of the bonds had been sold at the time plaintiff’s incorporators purchased the property, and therefore their purchase included the equitable title to the bonds; and that it is entitled to the return thereof for cancellation. The reply, however, places the plaintiff’s right to recover upon the contract of guaranty alleged to have been entered into by the bank, through its president, at the time the plaintiff’s incorporators made the purchase; and this is an entirely different cause of suit from that set up in the complaint. 2. It has often been held by this court that the plaintiff must prevail, if at all, upon the matters alleged in his com-plant (Lillienthal & Co. v. Hotaling Co. 15 Or. 371, 15 Pac. 630; Hammer v. Downing, 39 Or. 504, 64 Pac. 651, 65 Pac. 17, 990, 67 Pac. 30; Normile v. Oregon Nav. Co. 41 Or. 177, 69 Pac. 928), and that he cannot set up one cause of action or suit in the complaint, and recover upon another and different ground of relief alleged in a reply. 3. In addition to this, the decree of the court is put upon a matter outside of any of the issues made by the pleadings. It is based upon the ground that the defendant bank is estopped to assert its claim or lien upon the four bonds in controversy as against the plaintiff. But there is no allegation in the pleadings upon which such a decree can be founded. Estoppel, to be relied upon, must be specially pleaded, where an opportunity has been offered therefor: Remillard v. Prescott, 8 Or. 37; Bruce v. Phoenix Ins. Co. 24 Or. 486 (34 Pac. 16); Bays v. Trulson, 25 Or. 109 (35 Pac. 26). If the bank is estopped by the conduct or representations of its president [612] from asserting a lien, as against the plaintiff, upon the bonds in suit, for the debt due it from Wright and Richmond, the facts constituting such estoppel should have been set forth in the complaint, where the plaintiff had an opportunity to plead them. The plaintiff, however, made its case solely upon the issue that the bonds had never been sold or delivered, but were the property of its predecessor, the Union Railway. Upon this theory, it should have recovered, if at all. The findings of the court outside of the pleadings will not sustain the decree: Male v. Schaut, 41 Or. 425 (69 Pac. 137); Southwick v. First Nat. Bank, 84 N. Y. 420. Decided 3 August, 1903. It follows from these views that the decree.of the court below must be reversed, but the cause will be remanded for such further proceedings as may be proper, not inconsistent with this opinion. Reversed. On Motion for Final Decree. Mr. Justice Bean delivered the opinion. The motion for a final decree will be allowed, and the decree heretofore entered modified accordingly. This is a suit in equity, tried here de novo upon the pleadings and testimony, and there is no reason appearing why it should not take the usual course. No decree, however, will be entered foreclosing the defendant’s alleged lien upon the bonds in controversy, as the parties necessary to a full determination of that question are not in court. Motion Allowed.