Court Opinion

ID: 6893929
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:47:33.25943+00
Date Added: 2024-06-11T16:05:55.089049
License: Public Domain

By the Court,
Boise, J.:
This ease has been before this court on a former appeal by the apiiellants, and in that appeal some of the questions now presented were heard and considered by the court. (6 Or. 457.) On that appeal it was held by this court that the fact that Lyon signed the composition deed would not operate to relieve the Uptons from any contingent liability they might be under to Lyon, provided Nicolai shall recover against him on the contract named in the complaint, arising out of his failure to loan the two thousand dollars on a first mortgage; and that the signing of the composition agreement by Nicolai released Lyon from his liability to Nicolai. The decision of the court in that appeal would be binding on us as authority in determining this appeal, were it not that it is now claimed that the composition agreement was not binding on Nicolai, for the reason that it was fraudulent; that, as alleged in the replication, “ said composition agreement was never valid or binding on respondent, because at the time of its execution said Uptons were not the owners of said Gibbs’ note, and did not inform plaintiff of that fact, of which he was ignorant.” We do not think this is a sufficient allegation of fraud. (Horrell v. Manning, 6 Or. 416; Rolf v. Russell, 5 Id. 400; Dubois v. Hermance, 56 N. Y. 673; Liffen v. Field, 52 Id. 621.) Moreover, to avoid the agreement on this ground, it should appear that the respondent was misled by this fact, and thereby induced to execute the agreement.
*59The evidence also tends to .show that at the time that Nicolai signed the agreement the Gibbs note was pledged at the First National Bank, to secure notes of the Uptons, and that the Uptons were the owners of it. If such was the fact, then the note was the property of the Uptons, subject to the lien, and was one of the portions of the property of the Uptons, named in the composition agreement, which was reserved to the lienholder by the express terms of the agreement—as much so as the property subject to the mortgage held by Nicolai; for it appears from the agreement itself that the parties thereto stipulate and say in relation to these liens, “not hereby waiving any lien that any of or either of us have upon said property or any part thereof.” The First National Bank was a party to the agreement as well as Nicolai. Nicolai should have then inquired as to the liens which are referred to, and will be presumed to have done so, unless some active fraud is shown to have been practiced on him by which the condition of this note was concealed from him. On this subject the counsel for the appellant asked the court to instruct the jury that: “If the jury believe from the evidence that at the time of the signing of the composition agreement by Nicolai the Uptons were the owners of the Gibbs note mentioned in the pleadings, but that said note was pledged to the bank as collateral security for a debt due from the Uptons to the bank, and that the bank also signed the composition agreement, and that thereafter and within the time specified in said agreement the Uptons assigned to G. A. Steel all their interest in said note by proper conveyance, then the Uptons fulfilled their part of the composition agreement so far as said note is concerned.”
We think, for the reasons before stated, that this instruction should have been given, and that the refusal of the court to give it was error, for which the judgment of the circuit court should be reversed and a new trial ordered.