Moran v. Copeman

• Decision Date: 17 July 1935
• Docket Number: 6189
• Citation: 47 P.2d 920,55 Idaho 785
• Parties: A. L. MORAN, Respondent, v. H. B. COPEMAN, Appellant
• Court: Idaho Supreme Court

47 P.2d 920

55 Idaho 785

A. L. MORAN, Respondent, v. H. B. COPEMAN, Appellant

No. 6189

Supreme Court of Idaho

July 17, 1935

COMPROMISE AND SETTLEMENT-CONSIDERATION-EVIDENCE.

1. In suit on compromise agreement which terminated bona fide dispute of amount due under contract for logging timber evidence that one party was mistaken in belief that he was indebted to the other when compromise was made held properly excluded.

2. Law favors settlement of litigation, and compromises in good faith are ordinarily sustained as being upon sufficient consideration without looking to merits of controversy.

3. Settlement of bona fide dispute of amount due under contract for logging timber held sufficient consideration for compromise agreement, as against contention that compromise agreement was without consideration on ground of mistaken belief of one party that he was indebted to the other, which was of such character that it went to very substance of transaction.

APPEAL from the District Court of the Eighth Judicial District, for Kootenai County. Hon. E. E. Hunt, District Judge.

Suit on compromise agreement. Judgment for respondent. Affirmed.

Judgment affirmed, with costs awarded to respondent. Petition for rehearing denied.

Reed &amp Reed and C. H. Potts, for Appellant.

Absence or want of consideration may be proven under a general denial when the agreement is not in writing. (Sec. 28-103, I. C. A.; 31 Cyc., Pleading, p. 693; Daniel v. Hughes, 196 Ala. 368, 72 So. 23; 13 Cor. Jur., Contracts, sec. 885, p 741; Alden v. Carpenter, 7 Colo. 87, 1 P. 904.)

Whitla & Knudson and Kenneth K. Branson, for Respondent.

Consideration for a compromise agreement is found, not in the actual equities or legal rights of the parties, but is found in the settlement of the disputed claims put forth in good faith by the parties thereto. (Nelson v. Krigbaum, 38 Idaho 716, 226 P. 169; Heath v. Potlatch Lumber Co., 18 Idaho 42, 108 P. 343, 27 L. R. A., N. S., 707; Baumier et al v. Antiau, 65 Mich. 31, 31 N.W. 888; Ticknor v. McGinnis, 33 Idaho 308, 193 P. 850.)

New matter to be available to the defendant in his evidence must be specifically pleaded in his answer and the facts set forth therein, and a failure to plead such facts raises a presumption that they do not exist. (I. C. A., sec. 5-612; 49 C. J., sec. 114; Lindsay v. Wyatt, 1 Idaho 738; Miller v. Donavan, 11 Idaho 545, 83 P. 608; Fretz v. City of Edmond, 66 Okla. 262, 168 P. 800, L. R. A. 1918C, 405.)

BUDGE, J. Givens, C. J., and Morgan, J., concur. Holden and Ailshie, JJ., did not sit at the hearing and took no part in the decision.

OPINION

BUDGE, J.

Respondent prosecuted this case upon two separate causes of action, the first seeking recovery of $ 644 for cutting, piling and burning brush under a contract with appellant. Since appellant has assigned no error relating to the first cause of action there is nothing to consider with relation thereto.

The second cause of action stated in the second amended complaint is based upon an alleged compromise and settlement between appellant and a third party, Ray Thomas, under a written contract for logging the timber on certain lands belonging to appellant and a third party, and an assignment by said Ray Thomas to respondent of all his interest in the moneys due under said contract. The compromise agreement is alleged in the second amended complaint as follows:

"That on or about the 15th day of Nov. 1929, the defendant and Ray Thomas met and agreed to settle their account at that time. That the said Ray Thomas claimed a large amount of money to be due under said contract and that the defendant claimed to have accepted orders covering a large part of the money claimed due thereunder. That the defendant and Ray Thomas agreed to compromise the matter and that the defendant agreed to pay said orders and to further pay the said Ray Thomas the sum of $ 1004.75 in full settlement of the delinquent payments and the further sum of $ 2099.05 in full settlement of moneys which had been held back from the monthly payments and that Ray Thomas agreed to accept said sums. That these sums were to be paid in addition to the orders given by the said Ray Thomas and accepted by the defendant."

Appellant's answer to the second cause of action of the second amended complaint consisted of a general denial of all the allegations and an affirmative defense to the effect that appellant mistakenly believed that the said Ray Thomas had money coming to him under said written contract but that two days later appellant discovered his mistake and so notified the said Ray Thomas, and that appellant paid the said Ray Thomas all moneys that he had coming to him under and by virtue of said contract, and, in fact, had overpaid him.

The cause was tried before the court and a jury and resulted in a verdict and judgment for respondent. A motion for a new trial was made by appellant which was overruled and this appeal is prosecuted from the judgment and from the order overruling the motion for new trial.

Appellant assigns and relies upon 12 assignments of error, all of which are discussed in the briefs as presenting one question,--the principal ground urged for a reversal of the judgment,--namely, that by the rulings of the trial judge on the admission of evidence appellant was denied and deprived of the right to present a legal defense to respondent's claim, namely, that there was no indebtedness owing from appellant to respondent's assignor, Ray Thomas, at the time of the alleged agreement of compromise and settlement, and that such agreement was based on a mistake as to the existence of such indebtedness. From the record it appears that, there being a difference between appellant and Thomas, they went over the books together and arrived at the settlement or compromise agreement. Appellant sought to show by the books themselves, as well as by one Shepperd, an accountant who audited the books, that as a matter of fact the books disclosed, and in truth and fact, appellant was not indebted to Ray Thomas in any amount, but that, on the contrary, Thomas was indebted to appellant. The court refused to permit appellant to cross-examine the witness Ray Thomas as to any mistake in determining what the books actually disclosed, or that he had received notice of the mistake; refused to permit the introduction in evidence of the books containing the account; refused to permit appellant to testify that the figures in his account as kept in his books, when totaled on an adding machine by an accountant selected by Ray Thomas, and in the presence of appellant and Thomas, showed a balance owing by Thomas to appellant; refused to permit appellant to testify that when Mr. Shepperd totaled the figures in company with appellant and Thomas, they arrived at the conclusion that Thomas had been paid in full; refused to give an instruction requested by appellant to the effect that if the jury believe from the evidence that defendant was mistaken in his belief that Thomas had money coming to him at the time of the settlement, and that appellant compromised with Thomas in furtherance of such mistake, then their verdict should be in favor of defendant. The rulings of the court, assigned as error, were made upon the theory that a compromise cannot be set aside on the ground of mistake unless the mistake was mutual and made by both parties. It is appellant's contention that where the mistake of one of the parties is of such a character that it goes to the very substance of the transaction and results in an entire absence or want of consideration for the contract or agreement, it need not be mutual, and that in this case the compromise agreement was entirely without consideration for the reason that no amount was due and owing from appellant to Thomas and there was nothing to compromise.

That appellant and Thomas did enter into a compromise and settlement agreement appears beyond question from the record. Appellant was asked and answered as follows:

"Q. Did you, on the evening of November 14th or November 15th, compromise with Mr. Thomas and settle the account as he so testified here in this court room?

"A. Yes."

There is other evidence in the record of a like character, amply sufficient to establish the fact that there was a bona fide dispute between appellant and Thomas, which dispute was later terminated by the compromise and settlement reached on appellant's own figures and terms. In compromise and settlement of their respective claims against each other and in settlement of their dispute an amount was determined or reached and stated by appellant, appellant agreed to pay the same to Thomas and Thomas agreed to accept such amount. There is no dispute in the instant case that a controversy arose between appellant and Thomas as to the amount due from the former to the latter, Thomas claiming a considerably larger sum due than that reached by the compromise. There is sufficient evidence to support the verdict of the jury that appellant and Thomas spent two evenings going over the books, with respect to their claims one against the other, and finally reached a compromise and settlement, appellant agreeing to pay Thomas a specified amount in settlement of all claims made by Thomas against appellant. There was no mistake on the part of either of the parties as to the amount of the settlement, the only mistake being, if any, as appellant alleges, that two days after going over the books he discovered that he had made a mistake in calculation and had as a matter of fact paid Thomas in full. We therefore come to the point which is decisive of this case, namely, was there such a mistake by appellant that there was a total absence of consideration for the compromise agreement. In other words, did the...