Houston v. Trower
| Decision Date | 18 March 1924 |
| Docket Number | 6349. |
| Citation | 297 F. 558 |
| Parties | HOUSTON v. TROWER. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Lucian M. Eastin, of St. Joseph, Mo. (C. M. Williams and D. C Martindell, both of Hutchinson, Kan., on the brief), for plaintiff in error.
R. R Vermilion, Earle W. Evans, Joseph G. Carey, and W. F Lilleston, all of Wichita, Kan., for defendant in error.
Before SANBORN, Circuit Judge, and TRIEBER and MUNGER, District judges.
From a judgment on the pleadings this writ of error is prosecuted. The parties will be designated as they appeared in the lower court. The plaintiff brought suit against the defendant upon a promissory note made by defendant to the plaintiff as payee. The defendant's answer admitted the execution of the note. The answer set up as a defense to the note, and also as a counterclaim against the plaintiff, a claim for damages in a sum exceeding the amount of the note, for deceit, in that the plaintiff had induced the defendant to purchase of plaintiff capital stock in a corporation by means of false representations. This claim was twofold: First, in inducing defendant to purchase the unissued stock in a corporation, wherein the plaintiff then owned almost all of the issued stock; and, second, in inducing defendant at a later date to purchase the stock which the plaintiff owned. The corporation was known as the Parlephone Company and was engaged in making and selling phonographs. The alleged false representations related to the amount of the assets and liabilities and the amount and profitableness of the business done by the company, and the claim was made that the defendant relied the more upon plaintiff's statements because the plaintiff's daughter was engaged to be married to the defendant's son, and the plaintiff represented that the purchase of this stock would be a good investment and enable the defendant to place his son in a profitable business. The plaintiff filed a pleading, which was both a reply to the answer and an answer to the counterclaim. It made some denials which require no attention at this time, but it also alleged a compromise and settlement, and release of the claim of deceit set up in the defendant's answer and counterclaim, alleged to have been made after the defendant had asserted his claim that he had been defrauded. The release reads as follows:
'Hutchinson, Kansas, June 3, 1920.
'Received of E. E. Trower one thousand two hundred and fifty dollars ($1,250.00), which the said E. E. Trower is paying back into the treasury of the Parlephone Company, which settles all claims which the Parlephone Company has for salary drawn in an irregular way, and to cover all other claims, and also settles all claims that F. M. Houston or M. F. Houston may have for any reason against E. E. Trower in regard to their investment in the Parlephone Company. It is distinctly understood that the above is not intended to mean or to affect in any manner the present contract now existing in reference to the bills receivable, which was turned to the Parlephone Company by the said E. E. Trower, and that payment of which has been guaranteed by him.
Marion F. Houston. 'F. M. Houston.'
The defendant then filed a pleading by leave of court, in the nature of a rejoinder to the reply and a reply to the plaintiff's answer to the defendant's counterclaim, in which the defendant admitted that he had signed this release (which the pleading terms a receipt), but alleged that there had been no discussion between the parties at or before its execution of the matters alleged in the defendant's answer as a defense; that the only matter which had been discussed was an increase of the plaintiff's salary as manager of the company, and his duty to repay a portion of it to the company; that the defendant did not know, and could not have known when he executed the release, of the matters set up in the answer; that the release was submitted to the defendant for signature, and that the portion of the release which reads, 'and also settles all claims that F. M. Houston or M. F. Houston may have for any reason against E. E. Trower in regard to their investment in the Parlephone Company,' was put into the release by the plaintiff with the intention to prevent the assertion of the defenses set up in the answer; that the plaintiff, knowing that he had made the false representations, and knowing that the defendant was ignorant of their falsity, fraudulently inserted matters in the release that were unknown to the defendant, in the endeavor to preclude the defendant from asserting the frauds of the plaintiff against him. No claim was made that the release was executed because of contemplated marital relationship between the families, nor of any relation of trust or confidence.
The court made an order granting the plaintiff's request that the court should first hear the equitable issues presented. Thereafter the court sustained the plaintiff's motion for a judgment in his favor upon the pleadings. The statutes of Kansas provide that the material allegations of the answer, not controverted by the reply, shall be taken as true, but that the allegations of new matter in the reply shall be deemed controverted as upon direct denial or avoidance as the case may require. It is also provided that the plaintiff may reply to new matter in the answer by denials, and that he may also allege any new matter not inconsistent with the petition constituting a defense to the new matter in the answer. Sections 6996, 7021, Gen. Stats. of Kansas 1915. It may be assumed that the effect of the plaintiff's motion for judgment on the pleadings was a concession that the defendant stated a good defense against the note pleaded in the petition and a right to recovery upon his counterclaim, but the allegations of the plaintiff's reply thereto as to the execution of the release was admitted, and unless the other matters pleaded constituted a defense against the assertion of the release, no defense was presented, and the plaintiff was entitled to judgment on his petition. Under section 274b of the Judicial Code (Comp. St. Sec. 1251b) it is permissible that an equitable defense be set up in a law action, either in the answer or the reply (Plews v. Burrage (C.C.A.) 274 F. 881, 884), and the court should try the equitable issues, before the trial of the law action (Liberty Oil Co. v. Condon Bank, 260 U.S. 235, 242, 43 Sup.Ct. 118, 67 L.Ed. 232; Union Pac. R. Co. v. Syas, 246 F. 561, 566, 158 C.C.A. 531).
The chief question that is presented is the sufficiency of the defenses in the defendant's final pleading as against the conceded execution of the release by him. The release is not only a receipt for a sum of money, but it...
To continue reading
Request your trial
-
fornea v. Goodyear Yellow Pine Co.
... ... 1029, 16 So. 346; Shannon v ... Prall, 115 Wash. 106, 196 P. 635; Butterfield v ... Reynolds, 163 N.W. 86, 196 Mich. 157; Houston v ... Trower, 297 F. 558; Cobb v. Morrison, 104 A. 829, 79 ... Estoppel ... by contract is a term which is intended to embrace all ... ...
-
Hardin v. Kcs Intern., Inc.
...demands or claims have been discussed or mentioned, and whether or not the possible claims are all known.'" (quoting Houston v. Trower, 297 F. 558, 561 (8th Cir.1924))). In this case, Hardin entered into a "general release of all claims that HARDIN may have against CRUISERS, CAPE FEAR, and ......
-
Vondera v. Chapman
...125 S.W. 1190; Farrington v. Harlem Sav. Bank, 280 N.Y. 1, 19 N.E.2d 657; Hume v. American-West African Line, 36 F.Supp. 880; Houston v. Trower, 297 F. 558; Hanson v. Northern States Power Co., 198 198 24, 268 N.W. 642; Serr v. Biwabik, etc., Co., 202 Minn. 165, 278 N.W. 355; Berry v. Strub......
-
Weaver v. Saint Joseph of the Pines, Inc.
...claims are all known.'" Merrimon v. Postal Telegraph-Cable Co., 207 N.C. 101, 105-06, 176 S.E. 246, 248 (1934) (quoting Houston v. Trower, 297 F. 558, 561 (8th Cir.1924)) (emphasis added). See also Fin. Servs. of Raleigh, Inc. v. Barefoot, 163 N.C.App. 387, 394-95, 594 S.E.2d 37, 42-43 (200......