Whalen v. Gordon

• Decision Date: 29 May 1899
• Docket Number: 1,109.
• Citation: 95 F. 305
• Parties: WHALEN v. GORDON et al.
• Court: U.S. Court of Appeals — Eighth Circuit

95 F. 305

WHALEN v. GORDON et al.

No. 1,109.

United States Court of Appeals, Eighth Circuit.

May 29, 1899

On March 11, 1892, Joseph Whalen, the plaintiff in error, sold a stallion to Charles L. Gordon and others, who were co-partners as the Tiger Horse Company, and delivered to them the following written warranty, which was signed by himself and one D. A. Lyons: 'To the Tiger Horse Co., Caledonia N.D.: This is to certify that I guaranty stallion named Admiral, No. 3,333, to be seven years old, sure foal-getter (with proper care), and sound and true in all respects. ' The purchase price of this horse was $100 in cash, and $1,700 in the promissory notes of the purchasers, one half of which was payable in one year, and the other half in two years from the date of the sale, with interest at 8 per cent. per annum. The purchasers paid the cash, and delivered their notes. On March 30, 1892, they notified Whalen that the horse failed to fulfill the warranty, and offered to return him and on May 12, 1892, they brought an action against Whalen Lyons, and J. T. Selby and B. E. Ingwaldson, in the district court of Traill county, in the state of North Dakota, in which they alleged the sale; the warranty; that the horse did not comply with it; that they had offered to return him; that Selby and Ingwaldson had the purchase money and notes; and prayed that these notes might be delivered up to be canceled, and that Selby and Ingwaldson might be enjoined from delivering them to Whalen. A temporary restraining order was issued against Selby and Ingwaldson. They appeared at the hearing on this order, and stated that the notes were not in their possession, and thereupon that action was dismissed without service of any summons upon Whalen, who was a resident of the state of Iowa. On January 10, 1896, the defendants in error brought an action in the United States court for the Northern district of Iowa against Joseph Whalen and D. A. Lyons, to recover damages for the breach of the written warranty in the sum of $2,500, which they averred to be the difference between the value of the horse as he would have been if the warranty had been true and his value as he was. They also sought to recover $450 for feeding and caring for him, but this claim was stricken from their petition upon motion. Whalen and Lyons answered this suit of the defendants in error that the latter had rescinded the contract of sale, tendered the horse back, demanded a return of the purchase price, and brought an action for it, and that they were thereby estopped from maintaining the suit upon the warranty. At the close of the testimony upon the trial of the issues raised by these pleadings, Whalen and Lyons moved the court to instruct the jury to return a verdict in their favor, because 'it appearing from the testimony that the plaintiffs had elected to rescind said contract of purchase of said horse, they had thereby elected their remedy, and could only recover, if at all, as upon a rescission by them of said contract of purchase, the contract price paid by them for said horse, and were barred of this action, which is to recover damages, upon an affirmance by them of said contract of purchase, for an alleged breach of the warranty of said horse made during the sale thereof. ' The court granted this motion, but thereupon allowed the defendants in error to amend their petition 'so as to seek to recover, as upon a rescission of the contract of purchase, the price paid by them for said horse. ' Thereupon, and on April 27, 1898, they filed an amendment in their petition, in which they alleged their offer to return the horse, and their demand for the return of the notes on March 30, 1892, and asked to recover back the purchase price of the horse ($1,800) and interest. Whalen and Lyons then moved to dismiss the action because the amount in controversy was less than $2,000, exclusive of interest and costs. To obviate this objection, the defendants in error again amended their petition by adding averments that after they offered to return the horse, and after Whalen had refused to receive him, they were compelled to feed and care for him at an expense of $400, to employ veterinary surgeons and grooms at an expense of $250, that they employed grooms and made arrangements for standing him at an expense of $300 before they learned that the warranty was false, and that when they paid their notes they amounted to $2,118. To this amended petition Whalen and Lyons answered that more than five years had elapsed after the cause of action to recover back the purchase price had accrued and before these amendments were filed, and that the action was consequently barred by the statute of limitations. After the close of the testimony on the new issues, the court instructed the jury that the defendants in error could not recover upon their amended pleadings against Lyons, because their causes of action thereunder were not on the written warranty which he signed, which contained no agreement to return the purchase price; but that they were entitled to a verdict against Whalen, notwithstanding the statute of limitations, for the purchase price they paid for the horse, and for the amount they paid for keeping him after they offered to return him. The jury found a verdict against the plaintiff in error for $2,300. The writ of error has removed the judgment upon that verdict to this court for our consideration.

H. T. Reed (Dan Shea and C. W. Reed, on the brief), for plaintiff in error.

Nathan E. Utt (B. J. Howland, on the brief), for defendants in error.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

SANBORN Circuit Judge.

When, at the close of the trial upon the issues presented by the original petition, the court below held that there could be no recover, and the defendants in error filed an amended petition in which they claimed only $1,800, exclusive of interest, and costs, the court refused to dismiss the case for want of jurisdiction, and permitted them to again amend their petition, by adding claims which increased the apparent amount in controversy to more than $2,000. It is insisted that these rulings were erroneous, because, when the first amendment was made, the amount in controversy became less than $2,000, so that the court lost jurisdiction, and had no power to permit an amendment which would confer it, and because the claims pleaded by the subsequent amendment were not made in good faith, but were interposed for the mere purpose of sustaining the jurisdiction of the court. When the case was commenced, the amount in controversy was $2,950, so that the court originally obtained jurisdiction of the parties and of the subject-matter. The subsequent decision, that on the issues presented by the original petition the defendants in error could not recover, did not oust the jurisdiction of the court. It still retained complete control of the case, and full power to dispose of it. The defendants in error still had the right, by objection, by argument, by motion for new trial, and by writ of error, to contest the original controversy. The allowance of the first amendment was not, therefore, erroneous, because of any want of jurisdiction of the subject-matter or of the parties. When it was made, and it disclosed that the amount claimed was only $1,800, the question of jurisdiction was presented. If this $1,800 was in fact the entire amount in controversy between the parties, it must be conceded that it was the duty of the court to dismiss the action. If, however, by mistake or inadvertence, the defendants in error had omitted to state a part of their claim, we think it was within the discretion of that court to permit them to do so by amendment, although the statement would contain a jurisdictional allegation. A portion of the additional claims which were set forth in the second amendment-- that portion which charges the vendor with the expense of the care and keeping of the horse for a reasonable time after the sale was rescinded-- appears upon its face to be well founded in law and in fact, and there is nothing in the record that would warrant the conclusion that it was fictitious or was interposed in bad faith. The case appears to have been one, therefore, in which there was a sufficient amount in controversy to give the court jurisdiction, but the defendants in error had failed to plead it. Where the facts warrant the exercise of the jurisdiction of the court, but the pleader has failed to state them properly, the court is not deprived of the usual power to permit him to do so by amendment by the mere fact that the amendment will constitute or contain a jurisdictional averment. Bowden v. Burnham, 8 C.C.A. 248, 59 F. 752, and 19 U.S.App. 448; Carnegie, Phipps & Co. v. Hulbert, 16 C.C.A. 498, 70 F. 209, and 36 U.S.App. 81, 97. The objections to the jurisdiction of the court below are untenable.

The cause of action to recover back the purchase price of the horse accrued on March 30, 1892, when the defendants in error repudiated the sale, offered to return the animal to the vendor, and demanded of him the return of their cash and notes. Under the statutes of Iowa, this cause of action became barred in five years from that date, or on March 30, 1897. Code Iowa, 1897, Sec. 3447, subd. 6. The recovery of this purchase price was first demanded, and the necessary facts to warrant its recovery were first pleaded, by the defendants in error in the action at bar in the amendment which they filed on April 27, 1898, after the court below had held that they could not recover upon their cause of action for damages for a breach of the warranty pleaded in their original petition. To this amendment the plaintiff in error promptly pleaded the bar of the statute, but the court below overruled it. This...