Denver Industrial Corp. v. Kesselring

• Decision Date: 23 February 1932
• Docket Number: 12413.
• Citation: 90 Colo. 295,8 P.2d 767
• Parties: DENVER INDUSTRIAL CORPORATION v. KESSELRING et al.
• Court: Colorado Supreme Court

8 P.2d 767

90 Colo. 295

DENVER INDUSTRIAL CORPORATION v. KESSELRING et al.

No. 12413.

Supreme Court of Colorado

February 23, 1932

In Department.

Error to District Court, City and County of Denver; Henry Bray Judge.

Suit by the Denver Industrial Corporation against August Kesselring and another, in which, after vacating the confession judgment for plaintiff, defendants counterclaimed. To review the judgment for defendants, plaintiff brings error.

Affirmed.

Northcutt & Northcutt, of Denver, for plaintiff in error.

Kelley & Kelley, of Denver, for defendants in error.

ADAMS C.J.

Denver Industrial Corporation, hereinafter referred to as plaintiff, sued the defendants August Kesselring and Katherine Kesselring upon their promissory note. The instrument was on the form known as a 'cognovit,' or 'judgment note,' containing a warrant of attorney to enter the makers' appearance and confess judgment. Pursuant thereto, plaintiff took judgment without service of process. Thereafter the defendants appeared, filed an affidavit of a meritorious defense, and had the judgment set aside. Leave was granted to defendants to plead, and they filed an answer and counterclaim. The cause was tried to a jury, which resulted in a money judgment in defendants' favor. Plaintiff brings the case to this court for review on writ of error.

The execution of the note was admitted, but defendants alleged fraud, and declared that the controversy arose over certain shares of stock in the plaintiff corporation, sold by it to defendants; that plaintiff agreed to sell such shares at any time that the defendants should request them to do so; that defendants thereafter delivered the stock to plaintiff as security for a loan, and that the value of the stock exceeded the amount of defendants' note to plaintiff; that defendants requested plaintiff to sell such stock pursuant to agreement; but that plaintiff failed to comply with such request and fraudulently took judgment. These matters were set forth in defendants' affidavit of a meritorious defense, and were more formally pleaded in their answer and cross-complaint. Plaintiff denied defendants' allegations of fraud, and denies that it made any such agreement as alleged by defendants.

Numerous errors are assigned, but we shall consider only those argued in plaintiff's briefs, which we state in its own language, as follows:

'1. The motion to set aside the judgment entered on the confession note was erroneously sustained, the defendants failing to show in their motion or supporting affidavits any defense whatever to the cause of action set up in plaintiff's complaint;

'2. The trial court committed reversible error in admitting in evidence parol testimony that varied the written contract of subscription;

'3. The trial court erred in denying the instructions requested by the plaintiff and in refusing to direct a verdict in favor of the plaintiff.'

1. The only argument made against the reopening of the judgment is that the affidavit of merits did not state a good defense, but plaintiff's promise to sell defendants' stock for them on request, and defendants' agreement to deliver it, created a valid contract, enforceable against either of the parties. A promise for a promise is a valid consideration. Gertner v. Limon Nat. Bank, 82 Colo. 13, 39, 257 P. 247. The affidavit stated a meritorious defense, and so it was the duty of the court to vacate the judgment and try the case on its merits, when a motion to that effect was made in apt time. Parham v. Johnson, 88 Colo. 127, 129, 292 P. 599; Axelson v. Dailey Co-Operative Co., 88 Colo. 555, 557, 558, 298 P. 957; Gardner v. Rule, 87 Colo. 544, 289 P. 606.

2. There was ample oral testimony to sustain the defense as set forth above, but counsel for plaintiff contend that such testimony was inadmissible as varying the terms of the promissory note and the subscription contract under which the corporate stock was sold. The subscription contract contains the following clause: 'I understand that prospectus relating to said securities has been filed with the Secretary of State in accordance with the Securities Act, and that no salesman has any authority to make any promises or representations not contained in said prospectus, or any promise or agreements not contained in the stock certificate, or to alter or supplement the same, or to make any agreement to repurchase any of said stock, or to accept anything in payment thereof except check or draft. * * *'

Plaintiff relies upon the above clause, but it does not go to the question Before us. This case does not involve an unauthorized oral promise of a salesman, attempting to vary the terms of a written instrument which contained the entire agreement,...