Nelson v. Krigbaum

• Citation: 38 Idaho 716,226 P. 169
• Parties: ANDREW NELSON, Appellant, v. ANNIE E. KRIGBAUM, Administratrix of the Estate of A. R. KRIGBAUM, Deceased, HENRY T. CLAY, and the FIRST NATIONAL BANK OF WEISER, a Corporation, Respondents
• Decision Date: 29 March 1924
• Court: Idaho Supreme Court

226 P. 169

38 Idaho 716

ANDREW NELSON, Appellant, v. ANNIE E. KRIGBAUM, Administratrix of the Estate of A. R. KRIGBAUM, Deceased, HENRY T. CLAY, and the FIRST NATIONAL BANK OF WEISER, a Corporation, Respondents

Supreme Court of Idaho

March 29, 1924

COMPROMISE AND SETTLEMENT-BILLS AND NOTES-FINDINGS OF FACT AND CONCLUSIONS OF LAW-EVIDENCE.

1. Evidence examined and found to support findings that a valid consideration existed for the contract in question and that no fraud was perpetrated.

2. A court of equity, in the absence of fraud, will not aid a party to an action to violate a settlement of a disputed claim out of court, voluntarily entered into with the other parties.

3. The compromise of a disputed claim made in good faith is upon a sufficient consideration, without regard to the merits of the controversy, and irrespective of whether the claim be in suit or not, since the law favors the avoidance or settlement of litigation.

APPEAL from the District Court of the Seventh Judicial District, for Washington County. Hon. B. S. Varian, Judge.

Action to set aside written agreement. Judgment for defendants. Affirmed.

Judgment affirmed. Costs awarded to respondents. Petition for rehearing denied.

Lot L Feltham, for Appellants.

When a contract is obtained by misrepresentations, falsehoods and fraudulent practices, which mislead and deceive a party who believes them, and who is induced to sign it by reason thereof, the said contract will not be enforced by a court in equity. (20 Cyc. 13, 37, 41, 44; Hillock v. Idaho Title &amp Trust Co., 22 Idaho 440, 126 P. 612, 42 L. R. A., N. S., 178; Breshears v. Callender, 23 Idaho 348, 131 P. 15; Vane v. Towle, 5 Idaho 471, 50 P. 1004.)

"Forbearance or a promise to forbear suit upon a claim clearly unenforceable is no consideration sufficient to support a promissory note." (Payette Nat. Bank v. Ingard, 34 Idaho 295, 200 P. 344.)

Frank Harris, for Respondents.

"The settlement of a controversy is valid and binding, not because it is the settlement of a valid claim, but because it is the settlement of a controversy. And when such settlement is characterized by good faith, the court will not look into the question of law or fact in dispute between the parties and determine which is right. (Heath v. Potlatch L. Co., 18 Idaho 42, 108 P. 343, 27 L. R. A., N. S., 707; 8 Cyc. 509; Ticknor v. McGinnis, 33 Idaho 308, 193 P. 850; 13 C. J. 346, 347; note, 25 L. R. A., N. S., 275.)

The evidence as a whole wholly fails to disclose any fraud practiced by the respondents or any of them at the time or before the execution of the agreement. (Nelson v. Hudgel, 23 Idaho 327, 130 P. 85; Pickle v. Lincoln County State Bank, 61 Wash. 545, 112 P. 654; Kerns v. Washington W. P. Co., 24 Idaho 525, 135 P. 70; Collin v. Anderson, 26 Idaho 47, 140 P. 969; McFadden v. Heisen, 31 Idaho 689, 175 P. 814; 12 C. J. 349; Colton v. Stanford, 82 Cal. 351, 16 Am. St. 137, 351, 23 P. 16; Southern Development Co. v. Silva, 125 U.S. 250, 8 S.Ct. 881, 31 L.Ed. 678; Pomeroy's Equity Jur., sec. 893; Oppenheimer v. Clunie, 142 Cal. 313, 75 P. 899.)

BUDGE, J. McCarthy, C. J., and William A. Lee and Wm. E. Lee, JJ., concur.

OPINION

BUDGE, J.

This action was brought to set aside a written agreement upon the ground of fraud and want of consideration. To the complaint an answer and cross-complaint were filed, the answer specifically denying the material allegations of the complaint and the cross-complaint setting forth the contract in question and praying judgment thereon. An answer, in effect constituting a general denial, was filed to the cross-complaint and upon the issues thus framed the cause was tried to the court sitting without a jury. Findings of fact and conclusions of law were made and filed by the court and judgment was entered in favor of respondents in accordance with the prayer of their cross-complaint. From this judgment this appeal is prosecuted.

Prior to the rendition of the judgment in the trial court the defendant Krigbaum died and by appropriate stipulation and order, Annie E. Krigbaum, his wife, as administratrix of his estate, was substituted as a party defendant.

From the record it appears that Kelly & Patterson, a copartnership, borrowed $ 2,500 from the First National Bank of Weiser, giving to the bank a note for that amount signed by them as makers and by Krigbaum and Nelson as sureties, the note being dated October 17, 1917, and due six months after date. At the time this note was given the appellant, Nelson had an understanding with Kelly & Patterson, as a result of which a second note for $ 2,500 was executed by Kelly & Patterson as makers and by Nelson as surety, the same being payable to the bank aforesaid, which note was delivered to Kelly & Patterson with the understanding that it was to be used to take up the first note in the event it was not paid at maturity, inasmuch as Nelson did not expect to be in that section of the country about the time the first note became due. At the maturity of the first note on April 17, 1918, the interest thereon was paid by Kelly & Patterson and the same was renewed from time to time by notes signed by Kelly & Patterson as makers and by Krigbaum and Clay as sureties. At the time of the first renewal the original note was marked "Paid" by the bank and was delivered to Patterson. On October 17, 1918, a note for $ 2,500, due 90 days after date, payable to the bank, signed by Kelly & Patterson as makers, and Clay and Krigbaum as sureties, was delivered to the bank to take up the last renewal note and this note was continued by the giving of renewal notes from time to time, the same being signed only by Krigbaum and Clay, who paid the interest as it accrued on each renewal note given thereafter. The note of Kelly & Patterson as makers and Nelson alone as surety, executed in accordance with the understanding of October 17, 1917, was deposited with the bank as collateral security to the note of October 17, 1918. Various payments were made by Krigbaum and Clay, reducing the principal indebtedness to approximately one-half of the original amount. The collateral note was finally assigned without recourse by the bank to...