Court Opinion

ID: 6577415
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:35:30.314617+00
Date Added: 2024-06-11T15:57:09.025450
License: Public Domain

Pierpoint, J.
The note upon which this suit was brought, was given by the defendant to John Longee for a part of the purchase money agreed to be paid by the defendant Phaley to Longee, for a saw mill and the appurtenances, which Phaley had bought of Longee. The note was endorsed to the plaintiff after it fell due, and the defence now set up is, that there was a failure of the consideration.
It appears from the case that in March, 1854, one Daniel Kelsey owned the saw mill in question, and, while owning the same, mortgaged it, together with a farm in Tunbridge, to Daniel Tarbell, Jr, to secure the payment of a note for $2,466.98. This note Tarbell afterwards transferred to Keith, Hyde & Co., *307as collateral security for a debt he owed them, which debt he subsequently reduced by payments, to the sum of $139. Tarbell did not assign or deliver the mortgage to Keith, Hyde & Co. In the meantime Solomon Downer sued Tarbell on a note for $5000, and trusteed Kelsey as Tarbell’s debtor. Soon after this Tarbell, by some means, got possession of Kelsey’s note without in any way discharging Keith, Hyde & Co.’s lien thereon for the $139. This note he sold and transferred to Longee, and also assigned to him the mortgage executed by Kelsey to secure its payment. By this transfer Longee acquired all of Tarbell’s interest in the note and mortgage. This interest was subject to Keith, Hyde & Co.’s lien upon the note as collateral security for the $139, and to such rights as Downer acquired by virtue of his proceedings against Tarbell and his trustee Kelsey. What would be the result of that proceeding of course could not then be known. It was a matter of litigation between the parties. Downer might fail in establishing his -claim, or he might obtain a judgment against Kelsey for the whole amount of the debt due to Tarbell over the $139. After Longee had purchased the note and mortgage he commenced proceedings in chancery against Kelsey to foreclose his equity, of redemption in the mortgaged* premises. It does not appear that Kelsey, who was of course aware o.f these claims upon the debt due from him to Tarbell, made any attempt to resist, &uch proceedings in chancery, or if he did, it was oí no avail, for Longee obtained- a decree against him which finally became absolute, and on the 7th of April 1857, he was, by virtue of a writ for that purpose, put into the possession of the mortgaged premises. This decree is still in full force. The legal effect of that decree was to vest in Longee Kelsey’s right of redemption. It is true Tarbell got the note from Keith, Hyde & Co, surreptitiously, still they only had an interest in it to the amount of $139. The balance belonged to Tarbell as against them, and whether the note was in Keith, Hyde & Co.’s or Tarbell’s possession, would not affect their respective interests in it, nor prevent Tarbell’s selling and transferring such interest as he had in it. Downer’s claim was wholly uncertain and contingent, depending upon the result of his suit, and as against bin} Tarbell was entitled to the possession of the note. The *308mortgage he had not assigned. He clearly had such an interest in this note and mortgage, that he could proceed against Kelsey ' to foreclose the right of redemption, and if so, the assignment toLongee gave him the same right.
Longee having obtained a decree against Kelsey and possession under it, such decree is conclusive while it remains in force: whether circumstances might not arise out of the various transactions that would justify a chancellor, on proper application, in vacating that claim, is a question we are not now called upon to decide.
Immediately after Longee had taken the possession under his decree, he sold the mill to the defendant Phaley, and took therefor, among other notes, the note now in suit. Longee’s deed to Phaley contained the usual covenants of warranty and seizin, and Phaley immediately took possession of the premises and continued in possession until March, 1859, a period of nearly two years. Under the circumstances, he had an undoubted right to the possession for-this period without being liable to any one for the rents and profits, as neither Keith, Hyde & Co., nor Downer had so perfected their rights as to stand in any position to question his right. The use of the mill is found to be worth #210 per year. No question seems to have been made in the county court as to the effect of .the covenants of warranty in Longee’s deed t.o Phaley, or of the fact that Phaley commenced a suit thereon before the commencement of this suit, upon the question of a consideration for the- notes, or of a ratification of the contract: and therefore, of. course, no such question can now be raised here j but the only questions for our consideration arise upon the charge of the court in answer to the requests of the plaintiff. The plaintiff requested the court to charge the jury “ that the defendant- could not avoid the contract on the ground of a partial want., or failure of consideration, and if the defendant had the use and occupancy of the mill during the time he held it under his contract with Longee, and thereby received the beneficial use of the mill, that constituted at least a partial consideration: that, under the decree obtained by Longee against Kelsey, the possession of the mill belonged to Longee and to the defendant under bis, deed, arid that. Downer was not, entitled to demand of *309Longee or Phaley any rents or profits accruing before the decision of his case in tue supreme court as above set forth.”
With this request the court substantially complied, but further said to the jury “ that they should take the repairs made upon the mill in connection with the use of the mill; and that if Phaley laid out more in repairs than the use of the mill was worth during the time he occupied under Longee, no benefit resulted to him, and consequently Phaley got nothing by his possession, and there would nothing remain in the hands of Phaley as part consideration of the purchase ; and if so, upon that point their finding should be for the defendant.” It is insisted on the part of the plaintiff, that in respect to this part of the charge there was error. It appears that while Phaley occupied the mill, he expended about one hundred dollars upon the dam, took out the old wheel and put in two new east-iron Buxton water wheels, and a balance wheel, at an expense of about two hundred dollars. ATovv if it was necessary that Phaley should make these repairs and improvements in order to obtain the beneficial use of the mill, and they were necessary to be made, to render the use of the mill of any substantial value, then the charge of the court was correct, and it was probably in this view that these instructions were given to the jury. But there is nothing in the language used that would indicate to the jury, that they were to regard it in that light, neither is there any evidence referred to in the case to show that the jury would probably so regard it, with reference to such evidence ; in short there is nothing in the case to show that the repairs and improvements were necessary* or that they really increased the value of the use of the mill during the period that Phaley occupied it.
As the case stands, Phaley had the beneficial use of the mill to the extent of about four hundred dollars, and to that extent at least it cannot be said that there was a failure of consideration for the notes, and, as the principle is well settled in this state, that a partial failure of consideration cannot be set up as a defence, the plaintiff was entitled to a verdict so far as this point is concerned, unless the fact that he had expended an equal amount in repairs upon the premises under the circumstances in which they were made in this case, is a sufficient answer to that position.
*310As has been already said, if the expenditure in repairs was necessary to render the use of the premises of value,- so that in fact it cost Phaley to keep the premises in repair, so that the mill could be beneficially used, all that could be realized therefrom, then he has received nothing that can be called a partial consideration for the notes. This is but another mode of stating the proposition that the use of the premises was worth nothing. But, on the other hand, if the repairs were not necessary to be made in order that the defendant, Phaley, could realize the benefits of the use of the premises, as may have been the case from the facts stated, but such repairs were made as permanent improvements, with a view to ultimate benefits to be derived therefrom, and not with reference to any present necessity ; in spch case we think the money so expended should not be set against the use of the premises so as to destroy its effect as a part consideration for the notes, and establish the fact that the use of the premises was of no value, especially as these repairs were made after he was fully aware of Downer’s claim.
In this view of the case we think the charge of the court was erroneous. The jury should not only have been required to find that a sum had been expended in repairs equal to the use of the premises, but also that the repairs were necessary to make such use valuable, in order to warrant them in finding a verdict for the defendant on this point.
In respect to the other point on- which the court was requested to charge the jury, we think the charge of the court was entirely correct in asserting that Phaley had the right to hold the premises until the question of Downer’s right was settled without prejudicing his right to rescind the contract. Downer, and Keith, Hyde & Co. might, fail in establishing their claim. Neither had any direct lien upon the land, and, for aught Phaley knew, might never succeed in establishing one. Under the circumstances of this ease, his retaining the possession cannot be regarded as an affirmance of the contract.
Judgment reversed and case remanded,.