Court Opinion

ID: 7106945
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:22:03.217439+00
Date Added: 2024-06-11T16:13:36.317963
License: Public Domain

Granger, J.
1 I. There was no error in the refusal of the court to transfer the cause to the equity side of the docket for trial. The answer presented only defensive matter. Had the agreement been reformed, the legal effect would have been no- more than the legal ■effect of the facts pleaded in the law action. The sufficiency of the facts pleaded as a defense was not questioned, and, if they were established, the law forum gave the same relief as was sought in *687equity. The facts that would reform the instrument would defeat a recovery on it. Under such circumstances, equity has no jurisdiction. Thisi is elementary. City of Council Bluffs v. Stewart, 51 Iowa, 385 (1 N. W. Rep. 628); Dubuque & S. C. Ry. Co. v. Cedar Falls & M. Ry. Co., 76 Iowa, 702 (39 N. W. Rep. 691).
2 3 *6894 *687II. There was no reply, and, as the defense of a failure of consideration is an affirmative one, the burden was with the defendant, the law operating as a denial of the answer. To establish this, defense, it was necessary to prove that when the duebill was given it was for an amount to become due plaintiff from the six hundred dollars to come from the insurance company, after the payment to defendant for advancements, and a prior mortgage, and, if the loan was not obtained, then the duebill was not to be paid. The failure of consideration, as pleaded, was clearly established by plaintiff’s evidence, and the facts do not appear to be disputed in the record. Plaintiff, to avoid the effect of these facts, as shown, was permitted to prove a series of transactions happening after the execution of the duebill, and mainly after the facts pleaded as showing a failure of consideration had transpired. The court, after stating the issue, gave to the jury this instruction: “Seventh. If you find that the Aetna Life Insurance Company accepted such notes and mortgage executed and delivered to it, and treated them as in any way binding obligations of plaintiff, or if it assigned or transferred the same to defendant, and he, while holding them, sought to enforce them as the obligations of plaintiff, and she recognized and treated them as such, then there has been no failure of the consideration for the duebill, and your verdict should be for the plaintiff.” It will be •seen that the instruction permits other facts than the loan to be shown as a consideration for the duebill, or *688it may be better stated to say that, notwithstanding the loan was not obtained, it permitted the effect of the failure to obtain the loan to be avoided by the fact that the notes and mortgage had been treated or recognized by the insurance company, or the defendant, and the plaintiff, as binding. No money was ever obtained from the insurance company. Anticipating that the money would be obtained, plaintiff executed the notes and mortgage, and the latter was recorded. Plaintiff failed to secure a release of the prior mortgage as she agreed, and the loan failed. While the loan was expected to be made, defendant advanced one hundred and fifty dollars to plaintiff. She sold the land, and moved to Dakota; the sale being subject to this anticipated loan, the mortgage for which was of record. The money from the insurance company was in the hands of defendant, to be paid when the prior mortgage was satisfied of record. The amount of the prior incumbrance, the advancements by defendant, and his commissions, and some fees, aggregated an amount so that there would remain for the plaintiff one hundred and eight dollars, for which the duebill was given; it being then supposed that the prior incumbrance would be removed, and defendant could apply the money. After the failure of the loan, defendant, to protect himself for what he had advanced, obtained an assignment of the mortgage from the insurance company, and later the prior mortgage was obtained; and matters were finally adjusted by the owners of the land, and the liens canceled. Suit was afterwards commenced on the note. The adjustments were the result of several transaction, involving commissions and payments; and they were all admitted in evidence to show, as we must. *689assume, that the insurance company mortgage had been treated as binding, for that is the proposition submitted to the jury. We think the trial was a clear departure from the issues presented by the pleadings. If the plaintiff desired to avoid the facts pleaded as a defense, she should have pleaded the facts in avoidance, under the provisions- of Code, section 2665, by which course the issue tried would have been presented. Bank v. Wright, 84 Iowa, 728 (48 N. W. Rep. 91, and 50 N. W. Rep. 23) and cases there cited. The evidence was admitted under objection, and appellant presents the point in argument, and there is no attempt made to answer it We think the point is well taken, and the judgment is reversed.