Orcutt v. Hanson

• Decision Date: 14 January 1969
• Docket Number: No. 53042,53042
• Citation: 163 N.W.2d 914
• Parties: Lyle E. ORCUTT, Appellee, v. Leo HANSON, Appellant.
• Court: Iowa Supreme Court

Page 914

163 N.W.2d 914

Lyle E. ORCUTT, Appellee, v. Leo HANSON, Appellant.

No. 53042.

Supreme Court of Iowa.

Jan. 14, 1969.

Margaret L. Beckley and L. M. Hullinger, Cedar Rapids, for appellant.

W. Stuart Charlton, Manchester, for appellee.

LARSON, Justice.

The trial court sustained plaintiff's motion for summary judgment against defendant in an action for debt on open account and defendant appeals, contending his timely resistance to the motion duly apprised the court of the existence of a substantial issue of fact which might well determine the rights of the parties to the action. We agree and remand the cause for a trial on the issue of whether there was a settlement or novation at the time defendant executed and delivered a note covering the amount of the open account.

In his action at law plaintiff Lyle E. Orcutt sought to recover from defendant Leo Hanson certain amounts alleged due him for materials and services rendered. His petition as amended consisted of three divisions, but our concern herein is chiefly with Division III. Division I demanded judgment for $3,466.32 with interest and attorneys fees as provided by a past due promissory note; Division II demanded judgment in the sum of $202.20 with interest for material and services rendered defendant subsequent to the execution of the promissory note; and Division III, as an alternative to Division I, sought recovery for debt on open account for material and services rendered as acknowledged by the note.

The record consists of the pleadings and affidavits of the parties and the trial court's decision. The vital question raised by this appeal is relatively simple, and any issue as to the note's material alteration is not before us now. It appears without controversy that defendant purchased fertilizer from plaintiff and had plaintiff spread it, that on July 13, 1965, a written promissory note in the amount of the open account charges was executed and delivered to plaintiff, and that some changes as to time of payments were made on the face of the note either before or after the delivery of the note to plaintiff's agent at the bank.

Defendant denied any sum or sums were due plaintiff, that the note set forth in Division I had been given and received as payment of the existing open account, that no material or service was rendered him thereafter, and that the note was invalidated due to certain changes in its terms without the knowledge and consent of the defendant.

The court overruled plaintiff's motion for judgment on the pleadings and sustained his motion for summary judgment in Division III. Our attention is, therefore, directed to the issue as to whether the factual statements or affidavits filed by defendant in resistance to that motion adequately revealed to the court issues of fact which, if decided in his favor, would be a good defense to the action. American State Bank v. Leaver, Iowa, 153 N.W.2d 348.

In his motion for summary judgment plaintiff alleged the note was not taken as full payment of the account. He stated: 'That, whether fraudently altered or not, the promissory note in question, There being no agreement expressed or implied, that such constituted absolute payment, was only a conditional payment of the debt, the condition being that the note be honored and paid.' (Emphasis added.)

In his resistance to plaintiff's motion for summary judgment defendant attached his affidavit, which states: 'I, Leo Hanson, being duly sworn upon oath state I am the defendant named in the foregoing action. Between the dates of April 16, 1965 and May 15, 1965, I purchased from the plaintiff 70.680 tons of fertilizer and the spreading thereon for a total charge of $3,466.32, as alleged in paragraph 4 of Division III of the plaintiff's amendment to its petition filed in this cause April 28, 1967. I further state that, at the instance and request of the plaintiff, on or about January 13, 1965, The said account was completely and fully settled by my executing a promissory note for said amount, plus interest, which note a described as 'Exhibit A' in plaintiff's petition as amended. That the same was given by me and accepted by plaintiff as a full and complete settlement of said claim as aforesaid. * * *' (Emphasis added.)

The problem presented, then, is whether these statements sufficiently reveal a substantial factual issue, i.e., was the execution and acceptance of this note intended as a full and complete settlement of the open account claim or only a conditional payment as plaintiff alleged? The trial court recognized this issue when it said: 'In connection with his denials, defendant contends a successful defense of plaintiff's claims by way of novation.' It then stated: '* * * having examined all of the pleadings herein, the Motions and their supporting documents, * * * and having examined authorities appropriate to the issues raised by the pleadings herein as well as by both of plaintiff's Motions, finds that There is not substantial issue of fact remaining to be tried as to plaintiff's claim in debt on open account for the sum of $3,466.32.' (Emphasis added.)

The court took the view that 'Neither defendant's pleadings nor his affidavit filed in resistance to plaintiff's Motion for Summary Judgment state ultimate facts upon which a legal conclusion of a valid defense to plaintiff's claim in debt on the open account in the sum of $3,466.32 can be based.' We cannot agree.

Although defendant contends there were other evidentiary facts which support defendant's conclusion that the note was given in full and complete settlement of the open account claim, we believe the sworn statement in defendant's affidavit itself was sufficient to generate a factual issue as to whether the execution and delivery of the note was intended as a full settlement of the stated account.

I. Defendant's resistance to a motion for summary judgment, we have said, must be timely filed and must be supported by sworn statements of a person having knowledge of facts which are sufficient to sustain a valid defense to the action. American State Bank v. Leaver, supra, Iowa, 153 N.W.2d 348. An important factor to be shown is that the fact issue be such that, if decided in defendant's favor,...