Heaton v. Lynch
| Decision Date | 26 September 1894 |
| Docket Number | 1,361 |
| Citation | 38 N.E. 224,11 Ind.App. 408 |
| Parties | HEATON v. LYNCH ET AL |
| Court | Indiana Appellate Court |
Petition for rehearing overruled Nov. 27, 1894.
From the Decatur Circuit Court.
Judgment affirmed.
J. S Scobey and J. M. Sharp, for appellant.
S. A Bonner, M. D. Tackett and B. F. Bennett, for appellees.
REINHARD, J. GAVIN, J., did not participate in the decision of this cause.
The Citizens' National Bank of Greensburg, Indiana, sued the appellant, Thomas Heaton, and the appellee Lynch on a promissory note for $ 1,250, interest and attorney's fee.
Heaton appeared and filed what is termed in the pleading a "cross-complaint," averring that the note sued on was made for a loan of money by the bank to himself, Benjamin F. Lynch, and one Oliver Deem, and that said parties borrowed said money from said bank for their equal and joint use and benefit, and that they each equally owe and ought to pay the same, share and share alike, but that the name of said Deem is not upon said note as a maker thereof, he not being present at the time.
He prayed that Deem be made a party to the action, for process against him, and that he be required to answer, and for all proper relief.
He further prayed that Lynch be made a party and be required to answer.
Subsequently Heaton filed a second paragraph of pleading which he likewise denominates a "cross-complaint," setting forth the facts more fully than in the first paragraph, and averring that the money for which the note was given was borrowed by said Heaton, Lynch, and Deem for their joint and equal use and benefit for the payment of certain machinery used by them in partnership in the business of boring and constructing gas and oil wells; that Deem was not present, and did not personally sign said note, the bank being willing to make the loan on the credit of the names of said Heaton and Lynch; that the said three partners did not use any partnership or firm name in the transaction of their partnership business, but used their individual names, etc. There was a prayer that Lynch and Deem "be made defendants to this cross-complaint, and that any judgment hereon and on said note rendered, be rendered equally, share and share alike, against said Heaton, Lynch, and Deem, and for all other proper relief."
Lynch and Deem filed separate demurrers to each of these pleadings. The demurrers were sustained, and the appellant excepted. These rulings are assigned as errors.
If the first paragraph of this pleading is sufficient to withstand the demurrer, it must be good either as an answer, a cross-complaint or a petition to make a new party. In order to be good as an answer, the averments of the pleading must constitute a bar to the matters averred in the complaint. A mere glance at the pleading will disclose that it contains nothing in bar of the action. Indeed, it does not profess to do so. As an answer it is clearly insufficient. Is the paragraph good as a cross-complaint? A pleading filed by one defendant against one or more codefendants, and showing that he is entitled to relief against him or them is a cross-complaint. Browning v. Merritt, 61 Ind. 425; Wright v. Anderson, 117 Ind. 349, 20 N.E. 247.
When such a pleading is filed by one defendant against one or more codefendants and another who is not a defendant, showing that the cross-complainant is entitled to relief against such parties as to matters not apparent on the face of the complaint, it is necessary that such new party should be made a defendant, and process should issue against him. Swift v. Brumfield, 76 Ind. 472.
Properly speaking, there is no such pleading known to our code as a cross-complaint. If the cross-proceeding be against the plaintiff, and grows out of the matters averred in the complaint as constituting the cause of action, it is a counter-claim. But, notwithstanding the silence of our code upon the subject of cross-complaint, the chancery practice of determining the rights of the parties on each side of a case is clearly recognized by our decisions, and in such cases the rules of pleading, and practice of chancery courts, as modified by the spirit of the code, govern. Fletcher v. Holmes, 25 Ind. 458; Pomeroy Rem., sections 806, 807, 808; Bliss Code Pl., section 390.
Hence, it has become the established practice of our courts that cross-actions may be resorted to between parties on the same side of a case, and the pleading filed in instituting such cross-action is known under our practice as a cross-complaint. While the mode of procedure is not prescribed by the code, and the chancery practice is proper to be resorted to in such proceedings, the basis of the procedure is nevertheless found in the statute (R. S. 1894, section 577; R. S. 1881, section 568), which provides that the court "may, when the justice of the case requires it, determine the ultimate rights of the parties on each side as between themselves." Under this provision, it has been held that the power to determine a controversy between parties on the same side, as between themselves, is a discretionary one, and should not be exercised to the detriment of the opposing party, by delaying his judgment. Manning v. Gasharie, 27 Ind. 399.
While this is the rule as applied to parties already in court, it is further true that the liberal provisions of our code for making new parties defendant, at the instance of one already a defendant, may not be invoked when the controversy between such defendant and new party is purely between themselves and could not affect the right of the plaintiff to recover. Fischer v. Holmes, 123 Ind. 525, 24 N.E. 377; Frear v. Bryan, 12 Ind. 343; Bennett v. Mattingly, 110 Ind. 197, 10 N.E. 299.
In the present case, it is quite apparent from the first paragraph of the pleading under consideration, we think, that there was no unity of interest between the plaintiff and Deem. The latter, according to the averments of this paragraph, was not a party to the contract between the bank and the makers of the note. It is true that it is alleged that the note was made for a loan of money by the bank to Heaton, Lynch and Deem for their equal and joint use and benefit, but it is not shown that Deem was a maker of the note, or ever agreed to pay the same, or was in any way connected with its execution, but it is expressly averred that he was not present and "is not upon said note as a maker thereof." What the arrangement may have been between Heaton, Lynch and Deem can not affect the bank, unless Deem was in some way a party to the contract with it. It may be true that the loan was made to all three of the parties, and yet if the bank chose to accept the note of two of them, and these were willing to and did execute such note, we are unable to see upon what principle the bank could be compelled to pursue Deem for any portion of the money for which the note was given. How can Deem be made liable to pay any portion of a note, attorney's fee and interest included, when it is not shown that he ever executed it, and his name not only does not appear to it, but it is affirmatively shown that he had nothing to do with its execution? He may, indeed, be liable to the makers in a separate action, if it be shown that the money was obtained in part for his benefit, or used in an enterprise in which he was jointly interested with them. But this does not concern the plaintiff and is a matter purely between the defendants and Deem. We do not think, therefore, that the court erred in sustaining the demurrer to the paragraph under consideration.
Nor was it sufficient as a petition to make a new party.
By section 278, R. S. 1894 (R. S. 1881, section 277), it is provided that "when it is necessary for the defendant to bring a new party before the court, he may state the matter relating thereto in his answer, and...
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