Weston v. Estey , 22 Colo. 334 ( 1896 )

Chief Justice Hayt

delivered the opinion of the court.

This action was commenced by defendant in error, as plaintiff below, for the purpose of removing a cloud from the title to certain real estate, situate in Lake county, Colorado, and to obtain a decree of foreclosure of a deed of trust thereon. Plaintiff sets up his title to the property in controversy, ■ alleges possession, and sets forth by specific allegations the nature of the interest claimed by the defendants, Jacob T. Long, John W. Long, Cody W. Derry and George W. Trimble. The only averment connecting the defendant Weston with the transactions set forth, or with the property, is the statement that he claims an estate in the property adverse to plaintiff. The defendants, the Longs and Derry, made default, Weston alone appearing and answering.

In an action to remove a cloud upon a title, it is only necessary for the plaintiff to aver his possession and title, legal or equitable, coupled with a statement that the defendant claims an estate therein adverse to him. This is followed in this case by an averment that such interest, etc., is inferior, junior and subject to plaintiffs rights and equities. To constitute a defense to the action, the defendant must set up some adverse claim to or interest in the property and the nature of such claim. Wall v. Magnes, 17 Colo. 476; Amter v. Conlon, ante, p. 150.

The answer contains seven separate defenses to the plaintiff’s cause of action. These defenses might all be disposed of upon the rule that, to be available, each defense must be complete in itself, and a full answer to the cause of action to which it is interposed. Bliss on Code Pleading (3d ed.), see. 346; Pomeroy’s Remedies & Remedial Rights, secs. 716 to 719; Travelers' Ins. Co. v. Redfield, 6 Colo. App. 190.

The first, second, fifth and sixth defenses contain no averment of any interest of defendant in the property whatever, while in the third he admits that he claims an interest in the property, but fails to set forth the nature of such interest. The fourth defense contains no denial of any of the averments of the complaint. It is apparent from this statement that the first six defenses interposed are insufficient to constitute any defense to the plaintiff’s action.

This leaves for our consideration only defense No. 7, which the defendant calls a cross complaint. This pleading admits every material allegation of the complaint, and sets up a suit, by attachment, instituted by Weston against the Bank of Leadville. It alleges that in such suit judgment was rendered in favor of plaintiff for the sum of four thousand eight hundred and thirty-seven dollars and twenty-seven cents (4,837.27); that an attachment was issued in aid of the suit and levied upon the property in controversy; that afterwards an execution was duly issued and levied, and the property sold therein as the property of the Bank of Lead-ville and purchased by Weston, who subsequently obtained a sheriff’s deed therefor, but these averments show that whatever title the defendant Weston acquired by virtue of these proceedings was subsequent in point of time and junior to the inception- of the title claimed by the plaintiff. It is therefore apparent that the defendant Weston’s pleading contains no defense to the cause of action stated in plaiñtiff’s com plaint.

We might properly rest the decision of this case here, but as we are satisfied by an examination of the pleadings that the defendant has no standing upon the merits of the contro-versy, it will perhaps be more satisfactory to determine the case upon its merits. It is admitted by these pleadings that at the time of the execution of the deed of trust set forth in the complaint by the Longs and Derry to Greorge R. Fisher,. the former were indebted to the Bank of Leadville in the sum of fifty thousand (50,000) dollars, and that on the 28th day of April, 1882, they executed their promissory, note for that sum, with interest at two per cent per month ; that said note was payable four months after the date thereof- and secured by this deed of trust, executed by the Longs andDerry upon this property to Greorge R. Fisher, he being at the time cashier of the bank. It further appears that in the month of October, 1882, Fisher, the trustee named in the: deed of trust, without the payment of any money to him or to the bank, without the'request of the bank, and without power and authority in the premises, released the deed of trust of record, by executing to the Longs and Derry a trustee’s release.

As a part of this same transaction, two other papers were executed between the parties at the same time, one being a deed of conveyance by the owners of the property, the Longs and Derry, to Fisher, and the other being an agreement by Fisher to enter upon the property and mine the precious metals therefrom until such time as that one half of the net profits realized therefrom should amount to the sum of forty thousand (40,000) dollars, in addition to the indebtedness due the bank, which at that time was sixty thousand (60,000) dollars. Fisher was to continue to work the property, unless a sale could in the meantime be effected, until he could repay himself from the profits thereof the sum of sixty thousand (60,000) dollars, and interest thereon at the rate of ten (10) per cent per annum, and thereafter until the further sum of forty thousand (40,000) dollars could be realized therefrom for the Longs and Derry. Upon the payment of these several amounts, the mining property, together with one half of the net profits resulting from such working, should belong to and become the absolute property of the said Fisher, the trustee. There are certain other conditions of this agreement, such as the right reserved therein to Fisher and to the Longs and Derry to sell the property, under certain specified conditions, which are immaterial in this connection.

Where different writings relating to the same subject are executed at the same time between the same parties, a fundamental principle of construction requires that they be treated as one and the same instrument. Strong v. Barnes, 34 Am. Dec. 684; Norton v. Kearney et al., 10 Wis. 443.

Bearing in mind this rule, it is apparent that although Fisher, as the result of his unauthorized conduct, acquired the naked legal title to this property by virtue of the deed to him from the Longs and Derry, the equitable- title remained in the grantors, which equitable title, by the express contract of the parties, was only to be divested upon the happening of certain contingencies, which never took place.

The defendant Weston claims title to this property, as we have seen, as the result of his attachment proceedings against the Bank of Leadville, hut as the Bank of Leadville never held title to this property, but at best had a mere security thereon, we are unable to see how the defendant Weston obtained any title by reason of his suit against the bank. He cannot rely upon the claim that Fisher, in taking this title, was acting for an undisclosed principal, to wit, the bank, for two reasons: First, because of the rule of law which requires the principal to adopt a contract in its entirety, if at all, which in this case would require the bank to adopt the agreement-made by Fisher with the Longs and Derry, whereby he (Fisher) agreed to go into the mining business and work this property. It requires no argument to show that it is beyond the power of the bank to enter into a contract of this nature. If banking institutions iii this country were permitted to enter into the hazardous business of mining, there would be very little security for depositors. Mills’ An. Stats., sec. 510; Morawetz on Private Corporations, sec. 316; Thomas v. Railroad Co., 101 U. S. 71; Taymouth v. Koehler, 35 Mich. 22; Bray v. Farwell, 81 N. Y. 600; Head v. The Providence Ins. Co., 2 Cranch, 127.

The position of Weston is untenable for another conclusive reason, and that is Fisher was only to have title to this property upon the happening of certain contingencies, or the performance of certain conditions. These contingencies never transpired and the conditions have never been performed. Fisher’s title, therefore, never became absolute under his deed, and if it were possible to substitute the bank as his undisclosed principal, the title of the bank would be no better than his, and for this reason the merits of the controversy are with the plaintiff, and the decree of the court below should be affirmed.

Affirmed.