Kohen v. HS Crocker Company, 17188.
| Decision Date | 14 November 1958 |
| Docket Number | No. 17188.,17188. |
| Citation | 260 F.2d 790 |
| Parties | Herman E. KOHEN and Al B. Moll, Appellants, v. H. S. CROCKER COMPANY, Inc., Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Robert M. Sturrup, Miami, Fla. (Sturrup & Gautier, Miami, Fla., on the brief), for appellants.
Robert F. Underwood, Miami, Fla. (Knight, Smith, Underwood & Peters, Miami, Fla.), for appellee.
Before HUTCHESON, Chief Judge, and CAMERON and BROWN, Circuit Judges.
Alleging: that a promissory note, executed by Royal Nevada Hotel and endorsed by defendants, was due and unpaid; and that it had been presented to the maker for payment and payment had been refused; plaintiff brought this suit against the defendants as endorsers to recover the amounts due and unpaid.
The defendants, admitting in their answer the execution of the note and their endorsements, and not denying any well pleaded fact alleged by plaintiff, pleaded as a defense: that the making of the note and their endorsements of it had been induced and procured by threats "constituting business compulsion and/or coercion, and/or duress". As stated in paragraphs 4, 5, and 6 of their answer, the defense was in substance that the maker, a corporation, in which they had a substantial financial investment and which was in a bad financial condition and being pressed by its various creditors, was indebted to plaintiff on an open account, and plaintiff, threatening proceedings in bankruptcy unless its demand was met, had demanded and procured the execution and endorsement of the note sued on. In addition, in paragraph 9, they redundantly alleged that the plaintiff had acquired the note with full knowledge of these facts.
Plaintiff moved to strike all of paragraph 9 and all of paragraphs 4, 5, and 6, except the first sentences of each, and the motion was granted. Thereafter plaintiff moved for judgment on the pleadings and on the affidavit attached to the motion, and, the defendants filing no counter affidavit and making no request for an opportunity to present any material matter pertinent to a motion for summary judgment under Rule 56, Fed.Rules Civ.Proc., 28 U.S.C.A., the court entered judgment for the amount sued for, and defendants have appealed.
Here on three specifications of error,1 only the first two of which are urged, defendants correctly stating, "The rule is well settled that a motion to strike a defense in an answer admits the factual allegations of such defense", argue: that their answer stated two defenses, (1) business duress, and (2) that their endorsements were for the purpose of accommodating plaintiff in the negotiation and discounting of said note and not for the purpose of accommodating the maker of said note; that both of these defenses were good; and that in striking the defendants' pleadings and entering summary judgment for the plaintiff, the court erred.
For the reasons hereafter briefly stated, we reject both of these contentions. As the rule, stated by appellants themselves in their brief, and the authorities, cited by them and by the appellee, show, the law is settled that "business compulsion is not established merely by proof that consent was secured by the pressure of financial circumstances * * The doctrine of business compulsion cannot be predicated upon a demand which is lawful, upon doing or threatening to do that which a party has a legal right to do." 17 Am.Jur., "Duress and Undue Influence", Sec. 7, p. 564. In Williston on Contracts, Rev.Ed., Vol. 5, at Sec. 1606, the author states:
Under this rule, defendants' answer is wholly...
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...conclusory allegations are not controlling and will not be deemed to be admitted for purposes of this motion. Kohen v. H. S. Crocker Co., 260 F.2d 790, 792 (5th Cir. 1958). Also, "to the extent that the challenged defenses are not factually in conflict with those facts alleged by plaintiff ......
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...allegations underlying the challenged defenses and all reasonable inferences which can be drawn therefrom. Kohen v. E. S. Crocker Co., 260 F.2d 790, 792 (5th Cir. 1958); M. L. Lee & Co. v. American Cardboard & Packaging Corp., 36 F.R.D. 27, 29 (E.D.Pa.1964). Viewed in this light, a defense ......
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