Opinion
(Decided 11 April, 1899.)
Mortgage — Notes — Judgment — Counterclaim.
Where a counterclaim consists of a judgment and promissory notes against the plaintiff, who is examined as a witness, and the judgment is proved by the record, and there is no contention over the notes, the rule of preponderance of proof is inapplicable — they are both established, and the jury should be so told.
ACTION for damages for breach of contract, tried before Coble, J., at May Term, 1898, of FORSYTH.
Watson, Buxton Watson for plaintiffs.
Jones Patterson for defendant.
The plaintiffs in their complaint allege that in March, 1891, the defendant proposed to the plaintiffs to convey to the feme plaintiff a certain lot of land in Winston, N.C. and to build a house thereon at the cost of $1,250, and take a note for the purchase price, secured by mortgage on the property; that the plaintiffs declined the proposition, whereupon the defendant, to induce the plaintiffs to make the trade, guaranteed verbally that if the plaintiffs would buy the property on the terms proposed, that within twelve months the property should bring double the price agreed to be paid for it; and that as a further inducement to the plaintiffs to buy the property the defendant promised the male plaintiff that he would give him employment in his furniture store and (444) real-estate office at $75 per month, and that he would give to two sons of the plaintiffs, of the age of 17 and 19, respectively, employment in his furniture factory at $1 and $1.25, respectively, and board, until the wages of the three should extinguish the debt for the purchase of the property; that the proposition was accepted, and that the defendant, after procuring the note and mortgage, refused to comply with his contract — refused to make good the guarantee as to the increased value of the property, and refused to give employment to the plaintiff and his sons as agreed upon; but on the other hand, sold the property, by direction of the Superior Court of Forsyth County, in a proceeding brought to foreclose the mortgage, and became the purchaser thereof himself from the commissioner appointed by the court.
The defendant, in his answer, denies the allegations of the complaint, except as to the sale of the property to the feme plaintiff and the execution of the note and the mortgage for the purchase-money, but without guarantees set out in the plaintiffs' complaint, and the sale by the commissioner and the purchase of the property by himself. The defendant, in his answer, set up two counterclaims — one of $783 by judgment, as a balance due on the judgment in the foreclosure proceedings, and the other in the sum of $500, with accrued interest, due by notes and mortgage of the plaintiff, executed to the defendant for the purchase of two vacant lots in Winston.
The seventh issue submitted to the jury was in these words: "What amount is defendant entitled to recover of the plaintiff on his counterclaims?" and upon instructions of his Honor on that issue the jury responded, "Nothing." The defendant excepted to the instructions, and that exception furnishes the chief question for us to consider.
The defendant introduced the judgment in evidence which he (445) claimed as a set-off in the action and the notes of the plaintiff for the vacant lots, and testified that nothing had been paid on either. The made plaintiff, himself a witness, made no contention over the notes, but did say that before the judgment was had in the foreclosure proceedings he had made some payments on the notes upon which the judgment was afterwards taken. Upon this condition of the facts the court instructed the jury upon the seventh issue as follows:
"The plaintiffs contend that the jury should answer the seventh issue `Nothing.' The jury are instructed that, if defendant has shown, by a greater weight of evidence, he is entitled to recover anything on his counterclaim they will ascertain how much he is so entitled to recover and give such sums as their answer to the seventh issue. Defendant testified that he sold the two vacant lots under the mortgage he held, and bid them off at his own sale, and the jury are instructed that by such a sale the relations of the parties are not changed with regard to the lots, and that defendant still remains a mortgagee and plaintiff a mortgagor. The defendant having the right to have the amount due paid, holding the lots as security, and the plaintiff being entitled to his equity of redemption; and if he has failed to show by a preponderance of the evidence that he is entitled to recover anything on his counterclaims, they will answer the seventh issue, `Nothing.'"
There was error in the instruction. The rule of the greater weight of evidence had no application. The judgment was proved as required by law, and the defendant introduced the notes of the plaintiffs for the vacant lots without any endorsed credits, and testified that nothing had been paid upon them. The plaintiffs admitted the judgment and made no claim that the notes had been paid. The jury should have been instructed to find the amount of the judgment to be a set-off to which the defendant was entitled; and, further, that if they (446) believed the notes for the vacant lots had been executed and that no payments had been made upon them, they should find the defendant was entitled to the amount of the notes and interest, as a further set-off.
It is not necessary to consider the other exceptions. We will suggest, however, that it is not certain that the plaintiffs can sustain themselves as to the part of the action growing out of such a guarantee as the plaintiffs allege that the defendant made to them in reference to the future value of the real estate sold by the defendant to the plaintiffs. As that feature of the case, however, embraces only a part of the present cause of action, and as a new trial will have to be granted for the error pointed out, the case will go back for trial without prejudice on the quaere suggested.
NEW TRIAL.
(447)