O'Haver v. Shidler

Elliott, J. This was a suit by Shidler, as guardian of Abraham A. Higgins, against the appellant, O’Haver, for the. — 279 — foreclosure of a mortgage executed by tbe latter to tbe former, on the 14th day of February, 1862, on certain real estate, to secure to Shidler, as such guardian, the payment of the sum of $3,440 44, payable at'the expiration of two years from the date aforesaid. The sum so secured is stated in the mortgage as “ being the amount ascertained to be owing from said O’Haver, as former guardian of Abraham A. Higgins, to the said Isaac M. Shidler, present guardian as aforesaid, and for which indebtedness the said Cornelius O’Haver has also this day delivered to the said Isaac M. Shidler, guardian,” &c., “ the following described promissory notes, to-wit: One note signed by Hiram Lindley, dated November 6, 1857, due five years after date, for the sum of $1,400, with interest from date, the interest to be paid annually, and which note is secured by a mortgage from said Hiram Lindley and his wife to the said Cornelius O’Haver on 280 acres of land situated in Story county, Iowa, conditioned for the foreclosure thereof on failure to pay the same at the end of any year, upon which there is a credit, dated November 6, 1858, of $84, in full of interest to said date.” Also a note on Hiram Lindley and John Carter, dated November 6, 1858, due one day after date, for $84. Also a note on David Mills and Silas Bryant, dated May 12, 1858, due twelve months after date, for $719 67, with interest from date, with a credit indorsed thereon of $50, February 29,1860. Also a note on Silas Bryant, David Mills and F. D. Bryant, dated May 12,1858, due in twelve months from date, for the sum of $719 67i, with a credit indorsed February 29, 1860, of $50, &c. The mortgage also contains an express agreement on the part of the mortgagor, two years after the date thereof, to pay the said sum of $3,440 44, with interest from date, provided the same should not sooner be collected on the promissory notes. The plaintiff collected the amount due on the note executed by David Mills and the two Bryants, and as to the other notes described in the mortgage, the plaintiff stated in the complaint that no suits had been brought thereon against — 280 — the makers, except the note on Mills and Silas Bryant, on which a judgment had been recovered, but that they were insolvent and no part of the judgment had been, or could be collected, and that the defendant had consented and agreed that no suit should be brought on either of the other notes, and that the makers thereof were all insolvent; that the lands in Iowa, mortgaged by Iliram Bindley to secure the payment of the note executed by him, had been sold for taxes before the execution of the mortgage to the plaintiff, now in. suit, but of which fact the plaintiff' had no knowledge at the time the defendant executed the mortgage. The defendant demurred to so much of the complaint “ as seeks to recover for the amount of the note and mortgage executed by Hiram Bindley, for the reason that it does not state facts sufficient to constitute a cause of action.” The demurrer was overruled, and the defendant excepted. This ruling is complained of. The objection cannot be sustained. The mortgage was not made to secure the several notes complained of, but to secure the sum of $3,440 44, in the hands of the defendant as the former guardian of Higgins. The complaint is for the recovery of this single and entire sum, and a demurrer will not lie to a part of a complaint consisting of but a single paragraph, and containing only one cause of action. The objection to a part of the paragraph, if valid, should have been taken either by motion or answer. The defendant filed an answer of six paragraphs. The first was a general denial. Issues of fact were formed on the second, fourth and fifth paragraphs, and no question arises upon them in this court. Demurrers were sustained to the third and sixth paragraphs, to which the defendant excepted. The issues of fact were tried by the court. Finding and judgment for the plaintiff'. The third paragraph of the answer, to which a demurrer was sustained, alleges, in substance, that the defendant, as the former guardian of Higgins, received the sum of — 281 — $3,440 44, mentioned in the mortgage, and loaned the same as follows: To Hiram Lindley, $1,400, to secure which he took from said Lindley a mortgage on lands in Story county, in the State of Lowci, of the value of $2,000; that he loaned to Silas Bryant $719 67§-, for which he executed his note with David Mills and B. D. Bryant as sureties, and also executed a mortgage on personal property sufficient to secure said sum, and that the makers of said note were still solvent and able to pay the same; that he loaned to David Mills the sum of $719 67J, for which he executed his promissory note with Silas Bryant as surety, both of whom at the time were reputed to be wealthy, and had in their possession and held in their own names large tracts of real estate, besides personal property of great value, and were generally regarded as safe and reliable persons to whom to loan money; that he used all proper diligence to prevent loss on account of said loans, and that he delivered said notes to the plaintiff at the time of executing to him the said mortgage. It is further alleged that at the same time the defendant delivered to the plaintiff notes on A. B. Biley and Beuben Coverclale for $600, and all the other-notes and mortgages in his hands belonging to said wards. This paragraph assumes to answer the whole complaint, but the grounds of the defense intended to be set up thereby are not clearly perceptible. We infer, however, that as to the loans to Linclley, ' Silas Bryant and Mills, the question intended to be presented, or the ground of defense, is, that the money so loaned belonged to Higgins, the ward, and that the persons to whom it was loaned were solvent, or so reputed, at the date of the loans; and that the defendant, as the guardian of Higgins and the trustee of the fund, had used proper care and diligence in loaning and securing the money, and that he was not, therefore, responsible for unavoidable loss. .Whether this ground of defense could have been rendered available to all or any part of the claim, if the defendant had been sued on his bond as guardian, we — 282 — need not here determine. With a full knowledge of the facts, he entered into a settlement of the trust with the plaintiff, his successor, acknowledged his liability for the money, promised to pay it, and executed the mortgage in suit to secure its payment, and he-cannot now be permitted to go behind the settlement for the purpose of testing his liability. But the answer is defective for another reason. It assumes to- answer the whole complaint but fails to do so, as the aggregate amount of the three notes referred to do not cover the whole amount secured by the mortgage. And if otherwise valid, it would be bad because the averments in the answer fail to show that the defendant had properly discharged his duty in securing the payment of said notes. It is averred in the complaint that Mills and his surety were both insolvent at the date of the mortgage; this allegation is not controverted by the answer, though it is averred that they were solvent and possessed of .a large amount of property at the time the money was loaned to Mills. The mortgage shows that the note was given May 12, 1858, and was due twelve months thereafter. It remained in the defendant’s possession, and was not delivered to the plaintiff until the execution of the mortgage, on the 12th of February, 1862, at which time it is alleged the makers were insolvent. It remained in the possession of the defendant for a period of nearly three years after it became due, during which time he made no effort to collect it by suit, nor does he show any reason for his neglect. The paragraph, we think, was clearly bad, and the demurrer was therefore correctly sustained. By the sixth paragraph of the answer, it is alleged that the defendant loaned to Hiram Findley $1,400, which he secured by a mortgage on real estate in Iowa; that at the time of said loan he had petitioned the Court of Common Pleas of Hendricks county, Indiana, for permission to sell certain real estate in said county, belonging — 283 — to said ward, and to invest the same in lands in the west, for the benefit of said ward, and that after said court had ordered the sale, and before the same was made, he made said loan of $1,400 to said Lindley, and took a mortgage on the lands in Story county, Iowa, with a view to secure said land for his said ward; that the lands in Iowa, at that time, were worth $3,000; that during the pendency of the proceedings for the sale of his ward’s land in Indiana, he was removed from said guardianship and delivered over to his successor, the plaintiff herein, the said note and mortgage, and that by proper diligence on the part of the plaintiff", the lands in Iowa might have been secured for said ward, &c. This paragraph is only pleaded as to the sum of $1,400. The defense presented by it is that the defendant, anticipating that he would be authorized by the Court of Common Pleas' of Hendricks county to sell certain real estate of his ward in that county, and to invest the proceeds in other real estate in the west, loaned to Lindley $1,400, and took a mortgage therefor on certain lands in Iowa, which he alleges were -of the value of $3,000, with a view to their purchase for said infant; that he was prevented from making said purchase by his removal from said guardianship, but that the plaintiff, to whom he delivered the note and mortgage on Lindley, with proper diligence, might have secured the lands for said ward. This constitutes no defense as to the $1,400. The defendant had no authority to anticipate the action of the court in ordering a sale of his ward’s land, by loaning money to Lindley, or making a conditional purchase of the land in Iowa. It may not have been regarded by the court as a profitable or provident investment, and the defendant’s conduct in that respect may have been regarded as a good cause for his removal. hTo unauthorized action of his in reference to the land would devolve any legal obligation on Ms successor to make the purchase. The mortgage was made to secure the amount found due from the defendant to Ms ward, Higgins, and was made paya — 284 — ble at the expiration of two years, and we think a fair interpretation of its language brings it clearly within the rule laid down in Zekind v. Newkirk, 12 Ind. 544, and Ballenger v. Oswalt, ante p. 182, and that it was not necessary for the plaintiff to sue on the notes delivered to him by the defendant, before resorting to the mortgage. P. 8. Kennedy, for appellant. C. G. Nave, for appellee. The j udgment is affirmed, with costs.