Burnett v. Johnson, 48325
| Decision Date | 11 September 1961 |
| Docket Number | No. 48325,No. 1,48325,1 |
| Citation | 349 S.W.2d 19 |
| Parties | William E. BURNETT et al., Respondents, v. Fred E. JOHNSON, Appellant |
| Court | Missouri Supreme Court |
No respondent's briefs filed.
Walter A. Raymond and John J. Alder, Kansas City, for appellant.
This is an action for damages for fraud in connection with certain transactions involving oil leases in Texas and New Mexico. Plaintiffs William E. Burnett and Marceline P. Burnett, husband and wife, instituted the action against defendant to recover $200,000 actual damages and $250,000 punitive damages from defendant. Defendant filed an answer denying the alleged fraud and alleging that, in any event, the plaintiffs suffered no damage. Defendant also alleged that, after a year's experience under the first written contract between the parties, the matters in dispute between the parties were fully compromised and settled and a complete accord and satisfaction accomplished by a second contract in which the purchase price to plaintiffs was reduced from $300,000 to $200,000. The answer further pleaded laches and equitable estoppel. Joined with the answer, in separate counts, the defendant pleaded four counterclaims. In the first count he realleged certain facts set forth in the answer and pleaded other facts and prayed judgment against plaintiffs for the amount due and unpaid on the balance of the purchase price of the oil leases under the second contract in the sum of $75,000. In the second count defendant realleged the essential facts of Count I and further alleged that plaintiffs had agreed to sign a note and mortgage in the sum of $75,000 covering the balance of the purchase price of the oil leases under the second contract; that such mortgage was to be a lien on plaintiffs' leaseholds and the proceeds thereof; and that plaintiffs had failed to execute such note and mortgage. Defendant prayed for specific performance of such contract and for the establishment of an equitable lien on said leaseholds and the proceeds thereof.
In the third count of defendant's counterclaims he alleged the plaintiffs had agreed to pay their proportionate share of the expense for the usual and ordinary expenses for maintenance, care, operation, and preservation of the leaseholds, including wellcleaning and upkeep; that plaintiffs had violated their agreement and failed to do so, causing a great decrease in the oil production of the leases covered by the contracts, thereby damaging defendant in the sum of $20,000 for which he prayed judgment and affirmative relief.
In Count IV of defendant's counterclaims he reasserted and realleged the essential facts alleged in Count I of his counterclaims and a portion of the allegations of Count III, and further alleged that he could not adequately determine what net amounts plaintiffs had received under the division orders from the production of leaseholds assigned to plaintiffs by defendant without an accounting of the proceeds or returns received and expenses incurred; that the leasehold interests were subject to a working agreement for a proportionate share of the expenses for the operation and preservation of the leaseholds as shown by the contracts entered into between the parties. Defendant prayed the court for a judgment requiring plaintiffs to make an accounting of all proceeds they had received under the foregoing contracts from the leaseholds in question, for judgment for their proportionate share of the leasehold operation expenses and for a judgment and decree in equity under Counts II, III and IV of defendant's counterclaims.
In answer to the counterclaims plaintiffs admitted the execution of the first contract on October 1, 1955, and the second on October 1, 1956, denied any assignments of interests as alleged in the counterclaims, admitted the refusal to execute the note in the sum of $75,000, and in answer to Count IV alleged that if the defendant would pay plaintiffs the amount of their damage they were ready to account for any proceeds that they might have received by reason of the contracts and would reassign any interest if any interest had been assigned to them. Other allegations were denied. The answer to Count IV further stated that defendant was not entitled to recover under said count 'for the reason that it does not state facts sufficient to constitute a cause of action.' There is no such allegation in the answer to defendant's Count II.
The cause was set for trial in the Circuit Court of Jackson County at Kansas City on January 13, 1960, and on that date the parties appeared for trial and the following proceedings appear from the record:
'The Court: Proceed whenever you are ready.
'Mr. Owens: If Your Honor please, as to Count I, as to the plaintiffs' petition, it is a suit at law, I don't believe it is a suit in equity, and as to the counterclaim too, Counts I, II, and III, it is a suit at law, and not in equity. Count IV. And I presume that you gentlemen want to waive a jury?
'Mr. Alder: This is an equity case, Your Honor.
'Mr. Owens: It is not an equity case at all.
* * *
* * *
'The Court: Well, let me ask counsel for defendant, are you thoroughly satisfied with the record and are you in agreement with the Court that regardless of how this action started out, it is now properly on the equity side of the court?
'Mr. Owens: Well, no, I want you to waive a jury, if you are going to waive a jury I am not going to waive a jury.
'Mr. Raymond: We are insisting on equity, which is the same thing.
'Mr. Owens: I am not waiving a jury; if you are, that is all right.
'The Court: Plaintiffs wish to preserve their position that this action is not cognizable as a suit in equity?
'Mr. Owens: That is right.
'Mr. Owens: Yes.'
Thereafter, plaintiffs proceeded to present their evidence on all issues and the defendant presented his evidence on all issues and the case was taken under advisement. The court thereafter found for defendant and against the plaintiffs on their petition and found for defendant and against both plaintiffs for $75,000 on Count I of defendant's counterclaims and further found against defendant and in favor of plaintiffs on Counts II, III and IV of defendant's counterclaims. Judgment was entered accordingly. Plaintiff Marceline P. Burnett did not file a motion for new trial.
Defendant filed a motion for new trial on Counts II, III and IV of his counterclaims. Plaintiff William E. Burnett filed a motion for new trial charging, among other matters, that the court erred by denying plaintiffs the right of trial by jury on plaintiffs' petition and Count I of defendant's counterclaims.
The trial court sustained, on the mentioned ground, the motion of plaintiff, William E. Burnett, for a new trial as to the issues presented by plaintiffs' petiton and Count I of defendant's counterclaims, entered a new judgment against Marceline P. Burnett alone, set the judgment as to plaintiff William E. Burnett aside and ordered the issues tendered by plaintiffs' petition and by Count I of defendant's counterclaims, as between plaintiff William E. Burnett only and defendant, to be transferred to the jury docket for jury trial.
Defendant has appealed to this Court from the judgments entered against him on Counts II, III and IV of his counterclaims and has also appealed from the order granting plaintiff William E. Burnett a new Trial as to the issues tendered by plaintiffs' petition and defendant's Count I of his counterclaims. In this Court the defendant-appellant has made no assignments of error based on the trial court's rulings as to defendant's Counterclaims III and IV, but insists that the trial court erred in granting a new trial to plaintiff William E. Burnett on plaintiffs' petition and defendant's Counterclaim No. I; and that the court erred in finding for plaintiffs on defendant's Counterclaim No. II and complains of the refusal to grant the affirmative equitable relief therein prayed. The transcript on appeal consists of some 726 pages and plaintiff-respondent, William E. Burnett, has not favored us with a brief.
Before proceeding further we must pass upon certain issues which are determinative of the manner in which this cause shall be handled on appeal and what rules govern the method of review. Many reported cases appear to hold that where plaintiff files an action at law and the defendant pleads a defense in equity and asks for affirmative equitable relief, the court may properly treat 'the case as one converted by the answer into an equitable proceedings.' and some hold that the court may hear and determine the legal issues submitted by the petition, although denying relief in equity. Dunn v. McCoy, 150 Mo. 548, 561, 569, 52 S.W. 21; Betzler & Clark v. James, 227 Mo. 375, 390-392, 126 S.W. 1007.
We think the proper rule is well stated in Miller v. St. Louis & K. C. R. Co., 162 Mo. 424, 435, 63 S.W. 85, 87, where the court said:
'When the answer is filed showing an equitable defense and asking equitable relief, the court merely postpones the trial of the issues tendered by the petition until those tendered by the answer are tried; and, if the equitable defense is sustained, and if it covers the whole case, a final judgment is rendered for the defendant, but if the equitable defense is not sustained, the plaintiff's cause of action stands for trial as at law.
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