Ravenna Bank v. Custom Unlimited

• Decision Date: 01 August 1986
• Docket Number: No. 85-316,85-316
• Citation: 391 N.W.2d 557,223 Neb. 540
• Parties: The RAVENNA BANK, a Commercial Banking Corporation, Appellee, v. CUSTOM UNLIMITED, a Partnership, David Navratil, and Ramona Pabian, Appellants.
• Court: Nebraska Supreme Court

Page 557

391 N.W.2d 557

223 Neb. 540

The RAVENNA BANK, a Commercial Banking Corporation, Appellee, v. CUSTOM UNLIMITED, a Partnership, David Navratil, and Ramona Pabian, Appellants.

No. 85-316.

Supreme Court of Nebraska.

Aug. 1, 1986.

Syllabus by the Court

1. Trial: Pleadings: Demurrer: Actions: Joinder: Waiver: Appeal and Error. Where a defendant suffers an adverse ruling on a demurrer based on misjoinder of causes of action and proceeds to trial on the answer which does not reassert the issue of misjoinder, there is no question preserved for appellate review concerning joinder of causes of action, because the defendant has waived any error in the trial court's ruling on the demurrer alleging misjoinder of causes of action.

2. Actions: Words and Phrases. A cause of action is judicial protection of one's recognized right or interest, when another, owing a corresponding duty not to invade or violate such right or interest, has caused a breach of that duty.

3. Pleadings: Actions. Although a petition does not separately state and number two causes of action as required by Neb.Rev.Stat. § 25-805 (Reissue 1985), the mechanical form in which the plaintiff divides a petition is irrelevant to the question of whether such petition states one or more than one cause of action.

4. Pleadings: Actions: Joinder: Demurrer. Where more than one cause of action is both commingled in a pleading and improperly joined in such pleading, a defendant may demur to the misjoinder without first moving to have the causes separately stated and numbered.

5. Pleadings: Parties: Actions: Joinder. A petition joining two or more defendants may not assert multiple claims or causes of action unless each alleged claim or cause of action affects all joined defendants.

6. Partnerships: Words and Phrases. A partnership is an association of persons organized as a separate entity to carry on a business for profit. Neb.Rev.Stat. § 67-306(1) (Reissue 1981).

7. Pleadings: Parties: Actions: Joinder: Promissory Notes: Guaranty. Where one defendant has executed a promissory note in favor of the plaintiff and a different defendant has made a guaranty regarding such promissory note of the other defendant, Neb.Rev.Stat. § 25-702 (Reissue 1985) precludes the plaintiff's joining the two defendants in one petition containing two causes of action arising from the distinct contracts--the promissory note and corresponding guaranty.

8. Courts: Appeal and Error. Absent prejudicial effect on an adverse party's substantial right, the Supreme Court may disregard a procedural error committed by a trial court. Neb.Rev.Stat. § 25-853 (Reissue 1985).

David W. Jorgensen of Nye, Hervert, Jorgensen & Watson, P.C., Kearney, for appellants.

Moller Johnson, Ravenna, for appellee.

KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, CAPORALE, SHANAHAN, and GRANT, JJ.

SHANAHAN, Justice.

Custom Unlimited, David Navratil, and Ramona Pabian appeal the money judgment entered by the district court for Buffalo County in favor of The Ravenna Bank. We reverse and remand for further proceedings.

Ravenna Bank brought a law action against Custom Unlimited, a partnership composed of Navratil and Pabian, and against Navratil and Pabian as individuals. In the first part of its petition, paragraphs I to IV, Ravenna Bank alleged that Custom Unlimited, by Navratil and Pabian as partners of Custom Unlimited, had given the bank a promissory note on which Custom Unlimited was in default and owed $29,116.95 in principal and interest. The promissory note was dated January 18, 1983. In the second part of its petition, paragraph V, the bank alleged that, on May 27, 1980, Navratil and Pabian, as individuals, had given their "unlimited continuing guaranty" concerning Custom Unlimited's promissory note. Ravenna Bank prayed for "judgment against the defendants and each of them in the sum of $29,116.95." To the bank's petition, Custom Unlimited, Navratil, and Pabian demurred, alleging an improper joinder of causes of action. See Neb.Rev.Stat. § 25-806 (Reissue 1985). When the court overruled the defendants' demurrer, the defendants filed their answer but failed to assert their objection to the causes of action joined in the bank's petition. At the pretrial conference the district court authorized the defendants to "supplement the answer by preserving the demurrer previously filed and ruled upon." The defendants, on the morning of trial, filed a separate pleading entitled "Demurrer," alleging that the defendants did "preserve their Demurrer previously filed herein." At commencement of the bench trial, in open court counsel for the defendants called the court's attention to the demurrer just filed and again referred to a misjoinder of the bank's causes of action, that is, the action on the partnership promissory note joined with the action on the guaranty of that promissory note. In reference to the recently filed or second demurrer, the court responded: "I think we've already addressed it. I overruled it. We'll consider your demurrer as part of your answer. You may proceed." Without Ravenna Bank's objection to including the demurrer as an issue to be resolved, trial continued to the conclusion of evidence when the district court entered judgment that there was "due to the plaintiff from the defendants on the cause of action as set forth in plaintiff's petition ... the sum of $23,000.25." (Emphasis supplied.)

Custom Unlimited, Navratil, and Pabian contend their demurrer should have been sustained and separate trials ordered regarding the promissory note and guaranty. Ravenna Bank counters that the defendants failed to preserve their demurrer and, having waived their demurrer, cannot question the district court's disposition of the demurrer.

We first consider whether the defendants have preserved the district court's ruling on their demurrer as a matter for appellate review. Under § 25-806 a defendant may demur to the petition "when it appears on its face ... several causes of action are improperly joined." When a misjoinder does not "appear upon the face of the petition, the objection may be taken by answer, and if no objection be taken either by demurrer or answer, the defendant shall be deemed to have waived the same." Neb.Rev.Stat. § 25-808 (Reissue 1985). Where a defendant suffers an adverse ruling on a demurrer based on misjoinder of causes of action and proceeds to trial on the answer which does not reassert the issue of misjoinder, there is no question preserved for appellate review concerning joinder of causes of action, because the defendant has waived any error in the trial court's ruling on the demurrer alleging misjoinder of causes of action. See, Ivins v. Ivins, 171 Neb. 838, 108 N.W.2d 99 (1961); Dinkel v. Hagedorn, 156 Neb. 419, 56 N.W.2d 464 (1953); Walker v. Collins Construction Co., 121 Neb. 157, 236 N.W. 334 (1931). Here, the district court contemplated and authorized an amended or supplemented answer, a matter reflected in the court's order on the pretrial conference. A trial court is granted broad discretion to amend a pleading in furtherance of justice. See Neb.Rev.Stat. § 25-852 (Reissue 1985). Ravenna Bank does not contend, and we are unable to conclude, that the district court abused its discretion by considering the demurrer (misjoinder of causes of action) as an amendment or part of the defendants' answer.

We now proceed to the defendants' contention that joinder of the cause of action on the promissory note with the cause of action on the guaranty constitutes reversible error.

Neb.Rev.Stat. § 25-701 (Reissue 1985) provides in pertinent part as follows: "The plaintiff may unite several causes of action in the petition, whether they be such as have heretofore been denominated legal or equitable, or both, when they are included in any of the following classes: ... (2) contracts, express or implied." Neb.Rev.Stat. § 25-702 (Reissue 1985) states: "Except for product liability actions, the causes of action so united must affect all the parties to the action, and not require different places of trial." Defendants maintain that the bank's petition asserts two causes of action which do not "affect all the parties to the action" and, thus, cannot be joined in one petition.

"A cause of action is judicial protection of one's recognized right or interest, when another, owing a corresponding duty not to invade or violate such right or interest, has caused a breach of that duty." Sorensen v. Lower Niobrara Nat. Resources Dist., 221 Neb. 180, 193, 376 N.W.2d 539, 548 (1985).

Ravenna Bank's petition describes two transactions. There is no doubt that one transaction relates to Custom Unlimited's partnership note, while the second transaction involves the Navratil-Pabian guaranty. As we recently stated in Chiles, Heider & Co. v. Pawnee Meadows, 217 Neb. 315, 319, 350 N.W.2d 1, 4 (1984): " 'A guaranty is a collateral undertaking by one person to answer for the payment of a debt or the performance of some contract or duty in case of the default of another person who is liable for such payment or performance in the first instance.' ..." Although the bank's petition did not separately state and number the two causes of action as required by Neb.Rev.Stat. § 25-805 (Reissue 1985) ("Where the petition contains more than one cause of action, each shall be separately stated and numbered"), the mechanical form in which the plaintiff divides a petition is irrelevant to the question of whether such petition states one or more than one cause of action. See Kohler v. Ford Motor Co., 187 Neb. 428, 191 N.W.2d 601 (1971). Where more than one cause of action is both commingled in a pleading and improperly joined in such pleading, a defendant may demur to the misjoinder without first moving to have the causes separately stated and numbered. See, Baker, Administrator v. Brial, 185 Kan. 322, 341 P.2d 987 (1959); Jewell v. Jewell, 215 Minn. 190, 9 N.W.2d 513 (1943). We agree with the defendants...