Murphy v. Plankinton Bank
| Decision Date | 13 July 1904 |
| Citation | 100 N.W. 614,18 S.D. 317 |
| Parties | MARY C. MURPHY, Plaintiff and appellant, v. THE PLANKINTON BANK, William E Plankinton, Assignee, Defendants and respondents. |
| Court | South Dakota Supreme Court |
THE PLANKINTON BANK, William E Plankinton, Assignee, Defendants and respondents. South Dakota Supreme Court Appeal from Circuit Court, Minnehaha County, SD Hon. Joseph W. Jones, Judge Affirmed Grigsby & Grigsby; Davis, Lyon & Gates Attorneys for appellant. Kittredge, Winans & Scott Attorneys for respondent. Opinion filed July 13, 1904
This is an order granting to the defendants leave to serve and file an amended answer. The action was commenced in January, 1898, and was instituted to quiet title to certain lands described in the complaint. The action was tried in January, 1899, resulting in findings and judgment in favor of the defendants. On an appeal to this court the case was reversed, and a new tria1 ordered. The remittitur from this court was sent down to the circuit court in April, 1902. In February, 1903, the defendants, on motion, obtained the order appealed from, permitting the filing and substitution of the amended answer. In the original answer of the defendants, they denied the plaintiff’s claim of title and ownership, and alleged that the Plankinton Bank, a corporation, was the owner in fee of the property described in the complaint. The amendment to the answer filed by leave of the circuit court withdraws the defendants’ claim of fee simple title, alleges as a new defense that the plaintiff obtained the title without consideration, and by virtue of an assignment of a sheriff’s certificate of sale upon a judgment obtained by Melvin Grigsby against Frederick T. Day, and that on March 1, 1893, long prior to such judgment and sale thereunder, said Grigsby had assigned his claims against the said Day to the defendant bank . as collateral security to a promissory note given by the said Grigsby to the defendant bank for a sum upwards of $7,000, and that the defendant hank is still the owner and holder of the said claims, and by virtue thereof a holder of a lien upon the property superior to the title of the plaintiff, and that the plaintiff holds the lands in trust for the defendants; and by way of counterclaim the defendants allege that the said bank has a mortgage lien upon the premises described in the complaint, and asks that the said mortgage be reformed so as to include the property described in the complaint, and the same foreclosed.
In order to fully understand the questions involved on this appeal, a brief statement of the facts will be necessary. The action is one of a number growing out of an attachment suit instituted by Melvin Grigsby against Frederick T. Day in 1893. It is disclosed by the affidavits filed in support of the defendants’ application for leave to amend that said Day in the spring of 1893, and for some time prior thereto, was president of the Plankinton Bank, a corporation engaged in the banking business in the city of Milwaukee, Wis.; that about that time Day, being largely indebted to the bank, transferred a large amount of property to it, including the lands in controversy in this action and other lands in South Dakota, by quitclaim deed, which deed was given and intended as a mortgage to secure the indebtedness of Day to the bank. Soon thereafter the bank made an assignment for the benefit of its creditors. Melvin Grigsby, who was connected with Day in loaning money and purchasing lands in South Dakota, claiming that Day was indebted to him in the sum of about $30,000, instituted the attachment proceedings above referred to against Day, which resulted in a judgment in favor of Grigsby for about $21,000, upon which the lands in controversy, and other lands in this state, standing in the name of Day, were sold, and deeds executed to the assignee of the certificates of sale. For a full and detailed account of the facts showing the nature of the transaction, see Grigsby v. Day,(1897); Murphy v. Plankinton Bank,(1900); Lyon v. Plankinton Bank,(1902).
On the trial of the case at bar the court found that the quitclaim deed executed by Day and wife to the Plankinton Bank was given and intended as a mortgage to secure the payment of an indebtedness of Day to the bank in excess of $175,000, and that the lands described in the complaint were subject to this mortgage, which constituted a prior 1ien thereon. The case on appeal to this court was reversed upon grounds not material now to be noticed. It will be observed that in the amended answer the defendants have abandoned their claim of title in fee simple to the property, and claim that the bank had a lien upon the same by virtue of the mortgage, and by virtue of the assignment of Grigsby of his claims against Day to the bank to secure the note given by him to it, and that the bank sets up its mortgage from Day, and asks a foreclosure of the same in this action, and also asks to have the quitclaim deed to the property executed by Day and wife to the bank reformed.
It is contended by the appellent that the court erred in granting leave to file the amended answer, for the reason
(1) that the application to amend was not made within time, and is not in futherance of justice;
(2) that it appears from the affidavits on the part of the defendants that they were ignorant of the new matter alleged as a defense at the time the former answer was filed, and that therefore such matter could only be set up by way of a supplemental answer;
(3) that it appears that the proposed amendments to the said answer will substantially change the nature of the defendants’ defense as to the material facts interposed by them at the former trial, and that the defense proposed by such amendments is substantially in conflict with the defense interposed by the original answer;
(4) that the said proposed amended answer does not state facts sufficient to constitute a defense to the cause of action set out in the plaintiff’s complaint, and that the pretended counterclaim therein attempted to he set up is not permissible, within the terms of section 675 of the Revised Code of Civil Procedure;
(5) that it appears from such amended answer that no new fact is alleged which was not well known to the defendants at the time the originaf answer was filed, as shown by the affidavits and exhibits on the part of the plaintiff;
(6) that the matter of the assignment of the claims of Melvin Grigsby to the bank as security for the payment of the note was fully determined in the circuit court of Minnehaha county in the action of William Plankinton, as assignee for the benefit of the creditors of the bank, against Melvin Grigsby, and that the issue so litigated and determined in the said action cannot be collaterally attacked and determined in this act ion, and that the alleged mortgage of Day and wife to the Plankinton Bank cannot be foreclosed on the part of the bank in this action, and hence that the amendment permitting the lien of the said mortgage to be set up as a counterclaim does not constitute a proper amendment to the answer in this action.
It may be stated as a general proposition that, under the reformed system of pleading in this state, the granting of leave to amend the pleadings in an action is largely in the sound judicial discretion of the trial court, and its rulings thereon will only be reversed in case of abuse of such discretion. The theory of the reformed system of pleading is that the case shoud be tried and disposed of, as far as possible, upon the merits, and that, when justice requires an amendment of the pleadings in order to fully present the issues, the court should exercise its discretion liberally in granting such amendment. 1 Ency. P. & P. pp 516, 525. Amendments to answers are especially favored, and greater liberafity will be exercised in allowing a defendant to amend his answer, tban in permitting a plaintiff to amend his complaint. 1 Ency. P & P. p. 518.
We are of the opinion that the delay in making the application for leave to amend was fully excused by the defendants, and that the court committed no error in holding that the application was made within the proper time, in view of all the circumstances connected with the case.
The second contention, that instead of an amended answer the amendment should have been by way of a supplemental answer, presents a question of some difficulty, in view of the provisions of section 154 of the Revised Code of Civil Procedure, as it was clearly stated in the defendants’ application for leave to amend that the facts constituting the basis of the amended answer were unknown to the defendants at the time the former answer was filed. Section 154 of the Revised Code of Civil Procedure reads as follows:
“The plaintiff and defendant respectively may be allowed, on motion, to make a supplemental complaint, anwser, or reply, alleging facts material to the case, occurring after the former complaint, answer, or reply, or of which the party was ignorant when his former pleading was made.”
It will be noticed by this section that the defendant is allowed to make a supplemental answer alleging facts material to the case occurring after the former answer, or of which the party was ignorant when his former pleading was tiled. The general rule is that no material...
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