Beardsley v. Clark

• Decision Date: 10 December 1940
• Docket Number: 45193.
• Citation: 294 N.W. 887,229 Iowa 601
• Parties: BEARDSLEY v. CLARK et al.
• Court: Iowa Supreme Court

294 N.W. 887

229 Iowa 601

BEARDSLEY v. CLARK et al.

No. 45193.

Supreme Court of Iowa.

December 10, 1940

Appeal from District Court, Linn County John T. Moffit, Judge.

Action in equity to rescind a contract for the sale of a business on the ground that the contract was fraudulently obtained by the defendants. The answers contained general denials. Trial was had, resulting in a decree, finding that the defendants were guilty of the fraud charged by plaintiff and entering judgment accordingly. After the term, one of the defendants filed a petition to vacate the judgment for the reason that he was a minor and no defense was made in his behalf by a guardian as provided by law. Hearing was had on such petition and relief denied. The petitioning defendant appeals.

Affirmed.

Edward J. Dahms, G. P. Linville, and Carl F. Jordan, all of Cedar Rapids, for appellant.

B. D Silliman, of Cedar Rapids, for appellees.

MILLER, Justice.

Plaintiff's petition was filed October 5, 1937, and asserted that on August 19, 1937, the defendants were engaged in the business of selling pop corn at wholesale under the trade name of Clark & Clark and on said day entered into a written contract for the sale of such business to the plaintiff for the agreed price of $1,500; the contract was obtained by the defendants through false and fraudulent representations; upon discovering the fraud, plaintiff elected to rescind the contract and gave notice to defendants accordingly; plaintiff offered to return to the defendants all the assets of the business described in the contract. Plaintiff prayed that the contract be declared rescinded, that plaintiff's note and chattel mortgage for $545 be cancelled and declared void and that he have judgment against defendants for the balance of the purchase price. The answer of the defendants was in the nature of a general denial, including affirmative allegations for the purpose of controverting plaintiff's charges of fraud.

Trial was had. The evidence introduced at the trial is not set out in the abstract, but the record presented to us demonstrates that substantial evidence was introduced, the trial consuming several days time. After the cause was finally submitted, on December 16, 1937, the court entered a decree determining that the equities were with the plaintiff and that the contract of sale was procured by the defendants as the result of fraud, false representations; the contract of sale was cancelled and rescinded; judgment was entered against the defendant Melvin D. Clark for the sum of $755, he was ordered to return to plaintiff his note and mortgage in the sum of $545 and, upon failure to return such note and mortgage plaintiff was to have additional judgment in the sum of $545 or a total judgment of $1,300; plaintiff was ordered to return the property covered by the contract upon satisfaction of the judgment, but was given a lien thereon for the judgment, as provided by law.

On January 4, 1938, upon motion by plaintiff, a supplemental judgment was entered, by reason of failure of said defendant to return the note and chattel mortgage, for the additional sum of $545 pursuant to provision in the original decree.

The original decree was entered during the November, 1937 term of Court. The supplemental decree was entered at the January, 1938 term of Court. Neither defendant appealed from either decree but, thereafter, and at the March, 1938 term of Court, on March 22, 1938, the defendant, Melvin D. Clark, through his father and next friend, defendant, William J. Clark, filed a petition to vacate and modify the judgment, asserting in support thereof that he was a minor, 19 years of age; he would become 20 years of age on March 28, 1938; that the judgment is voidable because during the trial no guardian ad litem was appointed and no defense made by a legal guardian as required by statute; said defendant had a good defense " in that he is a minor which plaintiff knew at the time of the executing of the contract involved and that any obligations of this defendant, were voidable and all liability on the minor's part terminated and this defendant, the said minor, elects to disaffirm all contractual obligations thereunder" . Said defendant prayed that the judgment against him be vacated and a new trial granted. In answer to such petition to vacate the judgment, the plaintiff challenged the sufficiency of the petition and also asserted matters in the nature of waiver and estoppel.

Hearing was had on the petition to vacate. Considerable testimony was taken and is set out in the abstract. We do not undertake to review it because the facts are undisputed on the issues, which determine this appeal. At the close of the testimony, the court entered an order on July 18, 1939, which dismissed the petition to vacate the judgment. On September 16, 1939, the defendant, Melvin D. Clark, appealed therefrom to this court.

In seeking a reversal of the order appealed from herein, appellant asserts that the judgment should have been vacated because it appears that it was rendered against a minor, for whom no guardian had been appointed and no defense had been made by a guardian; a minor, after disaffirming a contract, is not required to restore any property which he does not have in his possession; no judgment can be rendered against a minor until after a defense by a guardian; the judgment so entered is void and disregards the rule that a minor can disaffirm his contract and must return only such portion of the plaintiff's property as he has in his possession at the time of disaffirmance. We find no merit in such contentions.

The entry of judgment against appellant, while a minor without a defense having been made by a guardian, did not render the judgment void but only voidable and appellant was not entitled to have a new trial unless he showed that he had a good defense to the action. This is clearly demonstrated by the case of Reints v. Engle, 130 Iowa 726, 107 N.W. 947.In that case, a judgment had been recovered against a minor without a defense being made by a guardian. Thereafter a petition for new trial was filed, asserting this fact as ground therefor. The new trial was denied and on appeal the decision was affirmed, this court stating (130 Iowa 728, 107 N.W. 947) as follows:

" To justify the court in setting it aside, our statute requires, not only that the irregularity in the rendition of the judgment shall be made to appear, but it must also be found and adjudged that there is a valid defense to the action in which such judgment was rendered. The agreed statement of facts wholly fails in this latter respect. It shows simply that on the trial of the principal cause the defendant pleaded in denial of the plaintiff's petition, but states no fact on which to base a finding by the court that a defense in fact existed to the claim sued upon. It has often been held that a judgment which is merely voidable or irregular is not to be vacated until after a hearing of the alleged defense on its merits. Code, §§ 4049, 4096; Brewer v. Holborn, 34 Iowa 473; Russell v. Pottawattamie [County], 29 Iowa 256; Miracle v. Lancaster, 46 Iowa 179; Dryden v. Wyllis, 51 Iowa 534, 1 N.W. 703; Bank [of Stratton] v. Dixon, 105 Iowa 148, 74 N.W. 919.There is no such showing here. The minority of the appellant was no defense to the claim for damages, and, while it is conceded that a denial to such claim was pleaded, there is, as already suggested, no allegation or proof tending to sustain the truth of the answer, or to indicate that justice required the reopening of the case for another trial."

Pursuant...