Gallon v. Lloyd-Thomas Company

• Decision Date: 25 March 1959
• Docket Number: No. 16148.,16148.
• Citation: 264 F.2d 821
• Parties: George J. GALLON, Appellant, v. The LLOYD-THOMAS COMPANY, a Corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

264 F.2d 821 (1959)

George J. GALLON, Appellant, v. The LLOYD-THOMAS COMPANY, a Corporation, Appellee.

No. 16148.

United States Court of Appeals Eighth Circuit.

March 25, 1959.

Wayne L. Millsap, St. Louis, Mo. (Hocker, Goodwin & MacGreevy, St. Louis, Mo., on the brief), for appellant.

G. Carroll Stribling, St. Louis, Mo. (Fordyce, Mayne, Hartman, Renard & Stribling, St. Louis, Mo., on the brief), for appellee.

Before GARDNER, Chief Judge, and VOGEL and MATTHES, Circuit Judges.

MATTHES, Circuit Judge.

For the second time we are asked to review the action of the trial court in rendering judgment for defendant notwithstanding the verdict favorable to appellant (plaintiff) on Counts I and IX of plaintiff's amended complaint. On the first appeal, Gallon v. The Lloyd-Thomas Co., 8 Cir., 261 F.2d 26, we concluded we did not have jurisdiction of the appeal from the judgment n. o. v. on Counts I and IX and from the court's order granting a new trial on counts III, V and VIII of the amended complaint. It was demonstrated in our prior opinion that, under the existing circumstances, the granting of the new trial was not as such an appealable order; and that inasmuch as the trial court had not expressly determined by appropriate order that there was no just reason for delay in entering a final judgment on counts and IX and had not entered a final judgment thereon, as authorized by Rule 54(b), F.R.Civ.Proc. 28 U.S.C.A., the appeal was not properly in this Court.

The record now before us establishes that following our dismissal of the appeal, the trial court did make an express determination that there was no just reason for delay in entering final judgment on Counts I and IX and took the additional step of entering judgment thereon against plaintiff and in favor of defendant, all as contemplated by Rule 54(b), supra. From this judgment plaintiff has timely appealed.

As reference to our former opinion will reveal, in Count I plaintiff alleged that on October 13, 1954, as the result of defendant's duress, threats and coercion, he was compelled to sign an agreement with respect to his employment. In this count plaintiff prayed for rescission and cancellation of the contract, and for $25,000 actual damages. The jury awarded him $100 as damages. Count IX sought punitive damages and thereon plaintiff received a verdict for $20,000.

The court's judgment n. o. v. on Counts I and IX, was predicated on the conclusion that if the contract of October 13, 1954, was entered into by plaintiff under duress, it was nevertheless ratified in all respects by him as a matter of law.

In seeking reversal of the judgment, plaintiff advances the contentions that the Court, after all of the evidence was in, fell into error in refusing plaintiff's request to file his fourth amended petition; and that in any event, the evidence does not establish ratification as a matter of law. By the amendment, plaintiff sought to abandon his trial theory, as embodied in the third amended petition; i. e., that the contract was executed by him as the result of duress and coercion, substituting therefor a new right of action, based upon fraud in the procurement thereof.

While, in general, Rule 15 of the Federal Rules of Civil Procedure contemplates that amendments to pleadings should be allowed with liberality where necessary to bring about furtherance of justice and where the adverse party will not be prejudiced, it is a settled rule of practice that the trial court is vested with sound discretion in granting or refusing an amendment to pleadings, and the extent of this Court's review is limited to the question of abuse of this discretion. Wallace v. Knapp-Monarch Co., 8 Cir., 234 F.2d 853, 860; Frank Adam Elec. Co. v. Westinghouse Elec. Mfg. Co., 8 Cir., 146 F.2d 165, 167; Young v. Garrett, 8 Cir., 159 F.2d 634; Holley Coal Co. v. Globe Indemnity Co., 4 Cir., 186 F.2d 291.¹

Here, however, plaintiff points to the more direct provisions of Rule 15(b) which clearly and explicitly provide: "When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings." In the same section, further provision is made that upon motion of any party such an amendment may be made at any time, even after judgment. Thus, when evidence beyond the matters covered by pleadings is introduced without objection, it is held that, by trying such issues by implied consent, the pleadings are presumed amended. See Moore's Federal Practice, Vol. 3, § 15.13, and Albers Milling Co. v. Farmers Produce Co., 8 Cir., 222 F.2d 915, 918; Vogrin v. Hedstrom, 8 Cir., 220 F.2d 863, 866, certiorari denied 350 U.S. 845, 76 S.Ct. 86, 100 L.Ed. 753; Pasquel v. Owen, 8 Cir., 186 F.2d 263, 271; United States v. Cushman, 9 Cir., 136 F.2d 815, 817, certiorari denied 320 U.S. 786, 64 S.Ct. 194, 88 L.Ed. 473; Falls Industries, Inc., v. Consolidated Chem. Indus., Inc., 5 Cir., 258 F.2d 277, 285.

In the instant situation, it is apparent that plaintiff was not entitled to amend his petition under Rule 15(b), for the question of fraud embraced in plaintiff's fourth amended petition was not the issue that was tried. Further, the trial court cannot be convicted of abusing its discretion in refusing to allow the amendment. An analysis of the evidence will best demonstrate the correctness of this conclusion.

Plaintiff was employed by defendant in November, 1949. In March, 1950, he was appointed district manager in St. Louis, Missouri. For his services in selling appraisal service to business concerns, plaintiff received 15 per cent commission of the initial appraisal charge as well as the annual service charge. In 1952, for reasons not here material, plaintiff was transferred by defendant to New York with a drawing account of $225, with the oral understanding that defendant would not charge any overdrafts which plaintiff might incur in New York against his commissions earned in St. Louis. Plaintiff's operations in New York proved unsuccessful. His draw or advancement of $225 a week exceeded his earnings of 15 per cent of the defendant's fee on all contracts closed by plaintiff, and in September, 1954, defendant reduced plaintiff's drawing account to $175 a week. Pursuant to a telephone call from Ernest E. Goran, president of defendant company, plaintiff met Mr. Goran at the Sheraton Park Plaza Hotel in New York on or about October 12, 1954. Plaintiff testified that in the telephone conversation Goran said, "* * * that I had stuck my neck out too far and that a few days or weeks earlier he had received a call from an officer of the Department of Justice in Chicago; that they were investigating my character; that the investigator asked Goran if he knew that I was a bigamist; that he, Goran, didn't want to be implicated so he turned the investigator over to Mr. Gatenbey (vice-president of defendant) to deal with." Getting down to the events in the hotel, it appears that plaintiff's wife was with him, but Goran would not permit her to accompany plaintiff and Goran to the latter's room in the hotel. Plaintiff stated that he was very upset; that he and Goran found Gatenbey in the room and the latter began reading from a paper "* * * and telling me that I was a bad man, a bigamist, promiscuous or maybe worse and went on for nearly an hour and a half or two until I was completely broken down." Continuing, plaintiff testified that Gatenbey "said that if he had had his way he would have fired me long ago; that I would have to get out of the country in twelve hours or else take the consequences." From other testimony we learn that plaintiff came to the United States from England in November, 1949; that he first married Ethel Charle, apparently in England; he then married one Margaret Duffin in Gretna Green, Scotland; he again married in East St. Louis, Illinois, to a woman whom he had met in Toronto, Canada. This marriage was annulled in New York in September, 1953, and on August 10, 1954, plaintiff married his fourth and present wife. At the time of the Sheraton Plaza Hotel incident on October 12, 1954, plaintiff had not been naturalized, and it is apparent that the statements made by Gatenbey in the hotel room caused plaintiff great anxiety and fear that he would be deported from the United States. Following the encounter with Gatenbey, above related, and after Gatenbey had gone into the washroom, Goran informed plaintiff that he had told Gatenbey "not to be so hard on me"; that Gatenbey's friend (a prominent citizen of New York, then an official of that state) would be contacted in an effort to delay the investigation. According to plaintiff's testimony, when he left the hotel room he was so sick that Mr. Goran had to walk him around in the hall before he was in a condition to be taken downstairs.

Mrs. Gallon testified that when she and her husband met Goran in the hotel lobby he stated to plaintiff: "John, you've gone too far this time. We're going to have a terrible time to keep the investigators from bothering you and I am afraid you will be deported, but we will see (what) Mr. Gatenbey and I can figure out about it." Mrs. Gallon stated she waited in the hotel lobby from two until four o'clock p. m. while her husband was with Goran and Gatenbey. That when Mr. Gallon appeared "he was very, very sick. I do not know what he went through, but he really went through something with those people, believe me. My husband was very, very upset. He had been crying you could see." While in the cocktail lounge later in the day, Goran again stated that he and Gatenbey would try to figure out what could be done to prevent the investigation, and plaintiff would be advised. Out of the foregoing came the contract which materially changed plaintiff's remuneration. From further testimony, it seems that following the events above set forth, and within a day or two thereafter, Goran and Gatenbey presented the contract to plai...