Court Opinion

ID: 6906166
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:00:42.687761+00
Date Added: 2024-06-11T16:06:21.261013
License: Public Domain

Denied March. 5, 1918.
On Petition for Rehearing.
Department 1.
Mr. Justice McCamant
delivered the opinion of the court.
6. In a petition for a rehearing the defendants Pike again press upon us their contention that the note sued on was without consideration to support it. It is contended that even if the account standing to the credit of Pike, trustee, be disregarded, there was no debt owing from the defendant W. E. Pike to the bank at the time when his firm executed the note secured by the *622deed of trust. • This contention is not available to these defendants under the pleadings.
It is alleged in the complaint:
“That at said time the above-named defendant "W. E. Pike and P. L. Phelan were indebted to The First National Bank and one W. B. Hammitte in a large sum of money, to wit, in excess of eighteen thousand ($18,000) dollars. That by the terms of an arrangement and settlement between-said W. E. Pike and said P. L. Phelan the said P. L. Phelan assumed four thousand eight hundred eighty-three ($4,883) dollars of said indebtedness and gave his note therefor to the plaintiff, securing the same by a mortgage on real property situate in Coos County, Oregon, and the defendant W. E. Pike gave to The First National Bank of Roseburg, Oregon, his note hearing date of April 15, 1910, that being the. date of the alleged settlement between said Pike and said Phelan, for the sum of thirteen thousand five hundred ($13,500) dollars."
The corresponding portion of the answer is as follows :
“Answering the allegations contained in paragraph 2 of plaintiff’s complaint defendants admit that at about the time alleged a settlement was had between W. E. Pike and P. L. Phelan, substantially as alleged in said paragraph 2, and that the defendant Pike executed a note set out in said paragraph, but defendants allege that they had no knowledge of, and no dealings with W. B. Hammitte and cannot state exact amount due or owing to The First National Bank, at said date."
The complaint plainly alleges an indebtedness to the bank and to Hammitte of $13,500. This allegation is not denied. It clearly appears that Hammitte’s share of the debt was $4,000 and the defendants Pike therefore admit a debt due to the bank amounting to $9,500.
The gist of the defense asserted by the answer is stated in the extracts quoted in the former opinion. *623It plainly appears that the pleader claimed for the defendants Pike the right to set off against their debt to the bank the balance in the Pike trustee account. The claim that there was nothing due the bank is based on the contention that the credit due Pike, trustee, is greater than the debt evidenced by the note sued on.
7. It is of no consequence that Mrs. Pike is one of the Kinnicutt heirs and therefore one of the beneficiaries in the trust. It appears by the testimony of W. E. Pike that two of the beneficiaries had not been settled with when the case was tried. The amount due these beneficiaries has not been segregated from the amount which W. E. Pike claims as his own. The fund was therefore an asset ib. which others than these defendants were interested. Such a fund cannot be used by way of setoff to pay the debts of the defendants Pike. A relaxation of this rule would lead to intolerable abuses.
. It is finally contended in the petition for rehearing that the question on which the case turns under the former opinion is not raised by the pleadings. The portions of the answer quoted in the opinion are not separately stated as an affirmative defense to the suit and that may be the reason why plaintiff failed to attack them by demurrer. Issue is joined on these allegations by the reply and plaintiff in his brief and in his oral argument contended that the setoff pleaded by the defendants Pike is unavailable to them. This contention is supported chiefly by arguments which we have not found it necessary to pass on. Error is assigned on the findings of the Circuit Court which gave the defendants Pike credit for the balance in the Pike trustee account, and especially on a finding that the amount with which the defendant bank is charged was due to W. E. Pike individually. The question de*624cided in the former opinion is the controlling question in the case and it is squarely presented by the record before us.
The petition for rehearing is denied.
Rehearing Denied.
Mr. Justice Moore, Mr. Justice Burnett and Mu. Justice Benson concur.