Pickford v. Smith

• Decision Date: 15 March 1932
• Docket Number: No. 41239.,41239.
• Citation: 241 N.W. 650
• Parties: PICKFORD v. SMITH ET AL.
• Court: Iowa Supreme Court

241 N.W. 650

PICKFORD

v.SMITH ET AL.^a1

No. 41239.

Supreme Court of Iowa.

March 15, 1932.

Appeal from District Court, Polk County; Jos. E. Meyer, Judge.

This appeal presents but one question for decision, to wit: Did the trial court correctly overrule the plaintiff's motion to transfer the cause of action (replevin) to the equity side of the calendar? The opinion states the facts.

Affirmed.John McLennan, of Des Moines, and Lee, Steinberg & Walsh, of Ames, for appellant.

Stipp, Perry, Bannister & Starzinger, of Des Moines, for appellees.

DE GRAFF, J.

The plaintiff (appellant) Pickford was the maker of two certain promissory notes payable to Norvin E. Smith. These notes were placed in the hands of Attorney Vincent Starzinger of Des Moines, by Smith for collection. On April 18, 1930, the plaintiff Pickford commenced an action in replevin against Smith and Starzinger, alleging plaintiff's right of possession to the notes then in their possession. In his petition plaintiff Pickford alleges that he is the absolute and unqualified owner of the two notes, each dated January 8, 1929; one being for the principal sum of $1,800, due January 3, 1931, and payable in monthly installments of $150 each; the other for $1,000 due July 8, 1932, which notes were payable to the defendant Norvin E. Smith and executed by the plaintiff A. H. Pickford. In said petition in replevin, the plaintiff alleges that the said notes are wholly void and ineffective for the reasons: (1) They are wholly without consideration because no valuable or legal consideration passed therefor; (2) the consideration, if any, for said notes wholly failed; (3) that at the time the said notes were executed and delivered it was expressly agreed between the maker and payee that said notes should not be binding or effective, unless the Provident Mutual Insurance Company of Philadelphia did on January 1, 1929, have in force and effect sufficient insurance within the jurisdiction of the Des Moines Agency to produce total premiums of $150,000 per annum, and that in fact there was not in force sufficient insurance on January 1, 1929, in the jurisdiction of said agency to produce premiums in the aforesaid amount, and that said notes never became effective; (4) that if there was any consideration, the same was illegal and void by reason of the provision set forth in Exhibit A attached to and made a part of the petition (this agreement, Exhibit A, entered into November 20, 1928, between plaintiff Pickford and defendant Smith, recited that in consideration of the resignation of the defendant Smith, thereby creating a vacancy, which otherwise would not exist in the general agency of said insurance company, and the withdrawal of defendant Smith on or before January 2, 1929, thus passing the full collection fee on business placed on the books during the existence of the Des Moines Agency to Pickford of Des Moines); (5) that the defendant Smith procured said notes by means of false and fraudulent representations relative to the amount of insurance in force in the jurisdiction of the agency at Des Moines of the Provident Mutual Insurance Company.

By reason of the aforesaid allegations, the plaintiff Pickford prayed that a writ of replevin issue for his possession of said notes. The writ of replevin did issue on this petition and the notes were taken thereunder and turned over to the plaintiff Pickford.

It further appears that on July 7, 1930, the defendants filed answer in two divisions in which they admitted the execution and delivery by Pickford of the two notes to Smith on November 20, 1928, denied the alleged fraud, admitted the execution of the agreement Exhibit A, and pleaded a contract of June 20, 1929, as a waiver and settlement of any matters in dispute.

Further answering, the defendants state that the plaintiff Pickford wrongfully and by trickery procured a writ of replevin in this case and caused the sheriff to seize the notes referred to in plaintiff's petition on or about April 19, 1930, and that plaintiff has ever since retained possession and control of said notes.

Further answering, the defendants allege that the said notes were worth their face value at the time of their seizure by plaintiff and have been worth their face value ever since.

In division II of the answer the defendants admit and aver that the defendant Smith performed the terms and conditions of said contract, Exhibit A; admit and aver that the plaintiff Pickford took and has ever since kept the subject-matter, rights, privileges, benefits, and considerations conferred upon Smith by the terms of Exhibit A; admit and aver that the plaintiff Pickford has at all times ratified and confirmed said agreement, Exhibit A; admit and aver that the plaintiff Pickford, for value received, made, executed, and delivered the said two notes; and allege that on or about June 20, 1929, plaintiff Pickford, for value received, ratified and confirmed said agreement, Exhibit A.

The prayer of the defendants, as to both divisions of the answer, is that plaintiff's petition be dismissed and that the defendants be given judgment against the plaintiff for the value of said two notes with damages for the wrongful detention of said notes and for costs.

On June 1, 1931, the plaintiff filed an amended and substituted petition, in which petition he reiterates the allegations of his former petition with some amplification, but states in paragraph 9 thereof that he (Pickford) believed and relied upon the representations that there was in force on November 10, 1928, in the Des Moines territory of said Provident Mutual Life Agency, policies which would produce premiums in excess of $151,000 upon which a commission was collectible by said agency; that in truth and in fact there was not in force on November 10, 1928, policies which would have produced premiums in the amount of $151,000 and upon which a collection fee would be paid in favor of said agency; that there were only in force policies sufficient to produce premiums in the amount of $142,749.77 on November 20, 1928. In paragraph 14 of said amended and substituted petition of plaintiff it is alleged “that if the defendant Smith did not know of the falsity of the statements which he made (as to the amount of premiums collectible) and was acting in good faith, then there was a mutual mistake.”

The plaintiff in his amended and substituted petition renews his prayer as to the writ of replevin, and asks that the same may be confirmed; that the court find and determine that the notes described in his substituted petition are void and of no force and effect; that the same are subject to the defense of fraud and want of consideration; that each of said notes be annulled, canceled, and set aside; that the defendant Smith be enjoined and restrained from disposing of said notes and that said notes be returned to the plaintiff; and that plaintiff have such other and further relief as may be equitable including his costs.

It further appears that on June 2, 1931, the plaintiff Pickford filed a motion to transfer this cause to equity and that the same be tried as in equity. On the same date the defendants filed a motion to strike from the files the amended and substituted petition filed June 1, 1931. The defendants also, subject to the aforesaid motion to strike, moved to strike from said amended and substituted petition the allegation of plaintiff that the plaintiff believed that the defendant Smith had resigned said agency “in order to afford him (Pickford) the opportunity of acquiring the same,” and that the matters pleaded are and were peculiarly within the knowledge of plaintiff Pickford, and that Pickford knew that the defendant Smith was some 2,300 miles from the place of trial (Polk county), and that the matters pleaded tendered new issues.

On June 3, 1931, plaintiff filed an amendment to his amended and substituted petition in which certain figures previously recited, as to the amount of premiums on said policies of date November 20, 1928, were corrected and changed, and alleges that he (Pickford) would not have executed and delivered said notes had he not believed and relied upon the representations made by the defendant Smith as to the amount of insurance that was in force upon which said agency was entitled to a collection fee.

On the 4th day of June, 1931, the plaintiff further amended his amended and substituted petition wherein plaintiff Pickford withdrew the prayer of his amended and substituted petition and substituted therefore the following: “Wherefore, the plaintiff prays that the court find that the contract, Exhibit No. 1 (contract of June 20, 1929) has been rescinded and mutually abandoned by the parties and cancel the same. That the court find and decree that the notes described in this amended and substituted petition are void and of no force and effect and are subject to the defense of fraud and want and failure of consideration; that each of said notes be cancelled, annulled, and set aside; that the defendant Smith be enjoined and restrained from disposing of said notes and that an accounting be had between the parties and the plaintiff (Pickford) have such other and further relief as may be equitable.”

During the colloquy between the attorney for Pickford and the trial judge it was said by counsel for plaintiff: “I don't care whether the third note...