Opinion
Decided March 29, 1929.
Court of Appeals — Appellate jurisdiction — Action on note and foreclosure of mortgage — Defense of fraud, and prayer for cancellation, not chancery case.
G. filed a petition containing two causes of action, one for personal judgment upon a note, and the other to foreclose a mortgage given to secure the payment of the note. R. answered that his signature to the note was obtained by false and fraudulent representations, and that G. knew that fact and was not a bona fide holder of the note, and prayed that the petition of G. be dismissed and the "note and mortgage be surrendered and canceled."
Held, that the case was not one in chancery, and therefore was not appealable.
APPEAL: Court of Appeals for Summit county.
ON MOTION to dismiss.
Messrs. Grant, Thomas Buckingham, for the motion.
Mr. Ralph G. Thomas and Messrs. Hyre Hyre, opposed.
Plaintiff, E.R. Gowdy, brought suit in common pleas court to recover a personal judgment against defendant, Henry Roberts, upon a note signed by said Roberts, made payable to one Meeker, and by him transferred to plaintiff.
As a second cause of action, plaintiff alleged in his petition that defendant executed and delivered a mortgage upon his property to secure the payment of said note, and asked for a foreclosure of said mortgage.
Defendant filed an answer, in which he set forth that his signature to said note and mortgage was secured by false and fraudulent representations made to him at the time he signed the same, and that plaintiff knew of such fraud when he obtained said note, and defendant prayed "that the petition of the plaintiff may be dismissed, the note and mortgage referred to therein be surrendered and canceled, and for such other relief as may be proper."
In the common pleas the case was tried to the court, there being no express demand for or waiver of a jury, and on the issues joined the court found for the defendant, dismissed plaintiff's petition, and ordered said note and mortgage canceled.
Plaintiff thereupon filed an appeal bond, and brought his case to this court. Defendant has filed a motion in this court, asking that the appeal be dismissed, for the reason that the case is not appealable.
Where a petition contains two causes of action — one an action at law, which is triable by a jury, and the other a recognized chancery proceeding, which is triable by the court — and both causes of action are disposed of together in a single trial in the common pleas court upon the issues made in the petition, the question whether the case is appealable depends generally upon whether the action at law is the primary one, the relief sought in the chancery action depending upon and being ancillary thereto, or whether the chancery action is the principal one and the relief sought therein a necessary foundation for the action at law.
In the case of Rowland v. Entrekin, 27 Ohio St. 47, the right to a money judgment was entirely dependent upon the reformation of a contract, and the case was held appealable; while in the case of Brundridge v. Goodlove, 30 Ohio St. 374, the equitable relief sought depended upon the right to recover a money judgment, and that case was held not to be appealable.
Looking to the petition alone in the instant case, it is clear that the case is not appealable, for the right to foreclose depended upon the right to recover on the note.
Sometimes the question of appealability is controlled by the nature of the answer which is filed. Where the answer is not merely defensive, but states a new affirmative chancery cause of action, which requires a trial in advance of the trial on plaintiff's cause of action and if found in favor of the defendant would wholly supersede plaintiff's claim, then the case made by such answer is appealable; but to have such effect, the facts set forth in the answer must constitute a chancery cause of action, which might have been maintained separate and apart from the plaintiff's cause of action, and in which affirmative relief is the real object sought.
In the case at bar the answer sets forth that defendant's signature to the note and mortgage was obtained by fraud, and that plaintiff knew that fact when he obtained the note, and therefore was not a bona fide holder for value, and prays that the petition be dismissed; except for the last line of the prayer of the answer, where it is asked that the note and mortgage be canceled, it is purely and simply defensive and relates entirely to issues triable to a jury.
The reply denies the fraud charged or any knowledge thereof, and alleges that plaintiff is a bona fide holder of said note and mortgage for value before maturity, and prays that the answer be dismissed and that plaintiff may have judgment as prayed for in his petition.
The defense made and relief asked as to the mortgage was identical with the defense made and relief asked as to the note.
It is therefore apparent that the issues thus made by the first cause of action in the petition and the answer and reply, which were heard and determined by the court, were only jury issues, to wit, whether defendant's signature to the note was obtained by fraud, and, if so, whether plaintiff was a bona fide holder for value before maturity; and the mere fact that there was included in the answer a prayer for the cancellation of the note and mortgage did not change the character of the issues, or present a cause of action which required a trial in advance of the trial of plaintiff's cause of action on the note. If the judgment was in favor of the defendant on the jury issues involved in plaintiff's first cause of action and the answer thereto, the foreclosure of the mortgage would necessarily be defeated and the cancellation of the mortgage would be but a mere incident of such judgment; and the prayer therefore invoked only such relief as the court had the right to grant as a result of a judgment against the plaintiff on the note. No interposition of a court of equity was necessary to give the defendant the full benefit of the facts pleaded in his answer, by way of defense, and therefore no affirmative relief by way of cross-demand was really prayed for in the answer. Quebec Bank v. Weyand Jung, 30 Ohio St. 126.
"3. Whether a case is one in equity or at law, does not depend upon the understanding of counsel, or of the trial court, nor upon the form of the judgment rendered, but upon the nature of the action as shown by the pleadings. * * *
"5. The nature of such action is not changed by an answer which pleads an estoppel merely as an equitable defense.
"6. Allegations of new matter of an equitable nature in the reply, do not change the nature of the action itself." Raymond v. T., St. L. K.C. Rd. Co., 57 Ohio St. 271, 48 N.E. 1093.
The case of Lust v. Farmers' Bank Savings Co., 114 Ohio St. 312, 151 N.E. 189, is not controlling, because in that case the court found that the defendant by answer sought affirmative relief by making an equitable cross-demand, which constituted a cause of action on which a separate action might have been maintained, and that the answer of the defendant was not "defensive merely."
"In view of these cases it may be regarded as the settled law of this state, that while an equitable defense merely will not affect the mode of trial or right of appeal, yet an equitable cross-demand set forth by a defendant in a cross-petition upon which he asks affirmative relief, will draw to itself the mode of trial appropriate to such cause of action, and give the same right of appeal as it would do if set forth in a petition by the plaintiff in an action." Gill v. Pelkey, 54 Ohio St. 348, at page 361, 43 N.E. 991, 994.
Our consideration of the pleadings in the case at bar leads us to the conclusion that the answer set forth a defense merely, and not an equitable cross-demand, and that therefore neither the mode of trial nor the right of appeal was affected by the answer.
The case made in the petition was not appealable, and was not made so by the filing of the answer, and therefore the motion to dismiss the appeal must be granted.
Appeal dismissed.
FUNK, P.J., and PARDEE, J., concur.