Midland Savings & Loan Co. v. Sutton , 93 Okla. 230 ( 1923 )

This is the third time this case had been before this court on appeal. On the first hearing it was determined that Swan was the agent of plaintiff to receive payment of the mortgage debt, and the judgment of the trial court cancelling plaintiff's mortgage was affirmed. (Midland Savings Loan Co. v. Sutton et al., 30 Okla. 448, 120 P. 1007.) Upon the second appeal (Midland Savings Loan Co. v. Sutton et al., 55 Okla. 84,154 P. 1133) the law of the case was further settled and determined in the following language:

"To state it concisely, we hold that, at the conclusion of the trial in the former case, Swan stood indebted to the Midland Company for the amount that the Suttons owed it on the note and mortgage executed by the Suttons to the Midland Company, which the Suttons admit was $615, but the Midland Company claims was $800 and interest, a matter not necessary to determine here. When Swan repaid the $1,200 sent him by the Aetna Company for the use of the Suttons, then the Aetna Company became liable to the Midland Company to pay it the sum due it by Swan, and therefore the Midland Company has a right to be subrogated in the mortgage given by the Suttons to the Aetna Company in the amount due it and to have the mortgage restored for that amount and to have a personal judgment against the Atena Company for the sum due."

These two decisions became and are the law of the case, binding alike upon the trial court in the third trial of the action and upon this court on, this appeal. Mehlin v. Superior Oil Gas Co., 39 Okla. 565, 136 P. 581; Leonard v. Showalter,41 Okla. 122, 137 P. 346; Kingfisher Imp. Co. v. Talley51 Okla. 226, 151 P. 873; Chickasha Cotton Oil Co. v. Lamb,158 Okla. 22, 158 P. 579; Flesner v. Coopor, 62 Okla. 263,162 P. 1112.

The only questions left open after the second appeal for determination the trial court are thus stated in the opinion:

"The fact that the Aetna Company obtained securities instead of the actual money from Swan in its effort to have him repay it the $1,200 sent him for the Suttons may he a complication which will have to be met on the retrial of this case, because, if the securities received by it were not worth the sum invested in the same, it seems equitable that it should respond only for the securities' actual value.

"If it be found upon retrial that the Suttons are entitled to damages against the Midland Company, as claimed in their cross-petition, of course this could be offset against their indebtedness to the Midland Company."

These two questions, expressly reserved from the former decisions, are the only proper subjects for consideration on this appeal, and their proper determination should stamp the word "finis" on this prolonged litigation.

As to the first question, the testimony is that the Aetna sent to Swan two cheeks for $586 each, payable on the joint endorsement of Swan and the Suttons. These totaled $1,172. In the settlement with Swan he was charged with $1,210. Aetna paid $1,500 for a $3,000 mortgage in this settlement, leaving a margin of $328 between what it actually expended and what it received, if the $3,000 mortgage was worth face value. It foreclosed thin mortgage at maturity at an expense of $952.83, kept it five years and received net rentals of $436.29, then sold it in two parcels, the rough land for $1,200 cash and the bottom land for $1,800 on credit, receiving $300 cash thereon. Its account, therefore, on this mortgage transaction stands thus:

To amt. cash to Sutton, $1172.00 To amt. cash to Swan, 1500.00 To expense foreclosure, 952.83 By profit Swan settlement, $ 328.00 By net rentals, 436.29 By cash from sales, 1500.00 By bal. sale price (secured) 1500.00 ---------- -------- $3624.83 $3764.29

It therefore appears that the security received in the Swan settlement was reasonably worth its face value, $3,000.

As to the second question reserved in the former decision, it suffices here to say that the trial court sustained a demurrer to that portion of the answer of the Suttons which set up damages by way of counterclaim to the Midland's cause of action, and no testimony was directed to that issue upon the trial. The Suttons are not here complaining of that action of the trial court and the Aetna cannot do so.

The first paragraph of the court's findings reads:

"That the Buttons had received to their use and benefit from the agent Swan the sum of $468.80."

P.F. Button upon the witness stand testified that he had checked his books and checked stubs with those of Swan and that they showed $468.80 paid out of the Midland loan for labor and material for the Suttons, and that a further sum of $146.20 was paid out for them by Swan on a past due loan installment. This made a total of $61.5 paid out of the Midland loan for the benefit of Sutton, according to his own testimony. Ellie Sutton testified to the same facts as did her husband. Swan testified that the entire loan of $800 was so paid out. These were the only witnesses upon this issue. Therefore, the first finding of the court is contrary to the evidence.

The second finding of the court, to the effect that the Suttons did not connive with the Aetna in its settlement with Swan, is reasonably sustained by the evidence.

The third finding reads:

"That the evidence does not show that the securities obtained by the Aetna from Swan were more than sufficient to discharge the amount of money embezzled by Swan."

The statement of this account above shown, based upon the testimony of the Aetna, shows this finding to be contrary to the evidence.

The fourth finding, in effect, sustains the counterclaim of the Suttons against the Midland, to which a demurrer had been previously sustained, and as to which no proof was offered. This finding is therefore without support in the evidence and is contrary to law.

The fifth finding by the court is in direct conflict with the law of the case as announced by this court on the last appeal, and is therefore contrary to law.

This being an equitable action this court is authorized to examine and consider all the evidence, and, where the judgment is clearly against the weight of the evidence and contrary to law, to render or cause to be rendered such judgment as the evidence, and the law authorize. Pevehouse v. Adams, 52 Okla. 495, 153 P. 65; Marshall v. Grayson,64 Okla. 45, 166 Pae. 86; Martin v. Pruner, 64 Okla. 829166 P. 397 Hart v. Frost, 73 Oklahoma, 175 P. 257; Lee v. Little, 81 Okla. 168, 197 P. 4491; Keechi Oil Gas Co. v. Smith, 81 Okla. 266, 198 P. 588.

It is therefore concluded upon the whole case and the law of the case as heretofore announced by this court that the judgment in this case should be:

That the Midland have judgment against the Aetna for the sum of $185, being the balance in Swan's hands from the original Midland loan and which the Aetna took in its settlement with Swan, together with six per cent. interest from September 15, 1910; that the Midland have judgment against the Aetna and the Suttons jointly for the sum of $615, with interest at six per cent. from September 15, 1910, and that the Aetna mortgage on lots 8 and 9, block 390, in McAlester, Okla., be restored and revived for the benefit of the Midland, and that it be subrogated thereunder to the extent of the joint judgment herein rendered against the Aetna and the Suttons, that a foreclosure thereof be decreed, and that the Midland recover its costs.

It is therefore ordered that the trial court vacate the judgment heretofore rendered and enter a decree in conformity herewith.

By the Court: It is so ordered.