Keatley v. United States Trust Co.

• Decision Date: 10 January 1918
• Docket Number: 73.
• Citation: 249 F. 296
• Parties: KEATLEY v. UNITED STATES TRUST CO. et al.
• Court: U.S. Court of Appeals — Second Circuit

249 F. 296

KEATLEY v. UNITED STATES TRUST CO. et al.

No. 73.

United States Court of Appeals, Second Circuit.

January 10, 1918

John B Johnston, of New York City (Vine H. Smith, of New York City of counsel), for plaintiff in error.

Stewart & Shearer, of New York City, for defendant in error United States Trust Co.

A. B Boardman, of New York City (Charles B. Fernald, of New York City, and George L. Shearer, of New York City, of counsel), for defendant in error O'Brien.

Before WARD and ROGERS, Circuit Judges, and LEARNED HAND, District judge.

WARD Circuit Judge.

This is a suit by Harry Wronkow Keatley against the executors of the last will and testament of Herman Wronkow, deceased, to recover the sum of $10,000, with interest from November 30, 1911. November 30, 1910, Wronkow died, leaving a large estate. April 25, 1894, he executed the following instrument and delivered it to Lydia Keatley, the plaintiff's mother, on or about April 30:

'Whereas, Mrs. Lydia Keatley, the wife of John Keatley, of Marshaltown, Iowa, has been and is a friend to me, and has in many ways befriended me, for which I wish and hereby agree to repay her for such friendship by contributing to the support and education of her son, Harry Keatley, the sum of $500 per annum until the said Harry Keatley reaches the age of 21 years, and pay the same in quarterly payments, namely, on the first day of May, August, November, and February of each year from the first day of May, 1894. I further agree to bequeath to the said Harry Keatley and direct my executors to carry out my request to pay out of my estate after my death the sum of $10,000 to the said Harry Keatley in lieu of the stipulated yearly $500 as before said, which I agree to pay to him during my lifetime until the said Harry Keatley reaches the age of 21 years, which payment, however, of $500 yearly shall be discontinued and cease after my death. Should I survive the said Harry Keatley, then this foregoing stipulation shall cease and be null and void.'

On the same day Mrs. Keatley executed and delivered to Wronkow the following instrument:

'Received from H. Wronkow the above stipulations and provisions, which I have voluntarily accepted for all claims I had, have, or may have, of all and whatever nature or action, for damages in courts of equity or United States.'

This transaction followed Mrs. Keatley's employment of an attorney to enforce certain demands she was making against Wronkow. Wronkow made some or all of the annual payments up to the time of the plaintiff's coming of age, March 31, 1904, but died without making any provision for him in his will.

The executors set up in their answer in bar of the plaintiff's claim the following release:

'To All Whom These Presents shall Come or may Concern-- Greeting: Know ye, that I, H. W. Keatley, of Washington, D.C., for and in consideration of the sum of six hundred ($600) dollars lawful money of the United States of America to me in hand paid by Herman Wronkow, the receipt whereof is hereby acknowledged, have remised, released, and forever discharged, and by these presents do for myself, my heirs, executors, and administrators, remise, release, and forever discharge the said Herman Wronkow, his heirs, executors, and administrators, of and from all and all manner of action and actions, cause and causes of action, suits, debts, dues, sums of money, accounts, reckoning, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law or in equity, which against him I have ever had, now have, or which against his heirs, executors, or administrators hereafter can, shall, or may have, for, upon, or by reason of any matter, cause, or thing whatsoever from the beginning of the world to the day of the date of these presents.

'In witness whereof, I have hereunto set my hand and seal the 29th day of July in the year one thousand nine hundred and nine.'

The plaintiff testified that he had known Wronkow from childhood, and had always been told that he was his guardian. Wronkow was a part of his Christian name, and Wronkow during his childhood gave him toys, took him to the theater, and treated him in a most intimate relation. July 29, 1909, the plaintiff came on from Washington, D.C., saw Wronkow in his office, and signed the release. He testified that when he did so he did not know of the existence of the instrument dated April 25, 1894, and his mother testified that she had never told him of it. The trial judge directed a verdict for the defendants on the ground that the release was a complete bar.

As the plaintiff executed the instrument, knowing that it was a release, it was at best voidable, and not void. Therefore, as the law stood until March 3, 1915, he could only have escaped from it by filing a bill in equity for cancellation, which he had not done. Standard Portland Cement Co. v. Evans, 205 F. 1, 125 C.C.A. 1; Hogg v. Maxwell, 218 F. 356, 134 C.C.A. 164. The act of March 3, 1915, added section 274b to the Judicial Code in the following words:

'Sec. 274b. That in all actions at law equitable defenses may be interposed by answer, plea, or replication without the necessity of filing a bill on the equity side of the court. The defendant shall have the same rights in such case as if he had filed a bill embodying the defense of seeking the relief prayed for in such answer or plea. Equitable relief respecting the subject matter of the suit may thus be obtained by answer or plea. In case affirmative relief is prayed in such answer or plea, the plaintiff shall file a replication. Review of the judgment or decree entered in such case shall be regulated by rule of court. Whether such review be sought by writ of error or by appeal the appellate court shall have full power to render such judgment upon the records as law and justice shall require. ' Comp. St. 1916, Sec. 1251b.

The distinction between legal and equitable procedure has been jealously preserved by the Supreme Court. Bennett v Butterworth, 10 How. 669,...