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It has been held in the Eighth Circuit that, when an equitable defense is interposed or equitable relief is sought, the right thereto should be determined by the judge sitting as a chancellor before the issues at common law are submitted to the jury; 5 but the soundness of this ruling has not yet been established.
there is any doubt. Congress can hardly be thought to have any predilection for plaintiffs' suits in equity rather than defendants' and we must leave a capricious exception in practice, if we do not include a case like this. I agree that the language of the section is not what a Mitford or a Langdell would have used; but the purpose seems to me to be perfectly plain, and we ought, I think, to try to effect it if
“Section 274a (as added by March 3, 1915, Comp. St. 1916, $ 1251a), does not perhaps fit verbally, certainly not if I am wrong about section 274b, but it shows the purpose to avoid recourse to independent suits in equity with their attendant delays. Indeed, without section 274b I should have thought that a replication at law to avoid the release would fall under section 274a, as a 'suit at law' which should have been brought in equity' and that the plaintiff might have amended in the very action and proceeded. It can hardly be that section 274b takes away such a right.''
6 Union Pac. R. Co. v. Syas, C. C. A., 8th Ct., 246 Fed. 561, 566, 567, per Carland, J.: “We are clearly of the opinoin that, when equitable relief is asked in an action at law under the statute above quoted, the case for equitable relief should be tried as a case in equity, and that the great weight of authority is in
favor of the practice of trying the case in equity first, for this practice serves to keep the equitable matter distinct, and to prevent what must otherwise frequently ensue confusion and embarrassment in the progress of the action.
In the case before us, and all others like it, where it appears that no damages can be recovered until the release is out of the way, orderly procedure and a due regard for the rights of the parties demands that the equitable issues should be first tried by the court sitting as a court of equity. It is true the chancellor may take the advice of a jury, but in such cases the issues to be passed upon by the jury should be carefully framed, and the jury should not be the one which also tries the action at law, as the desire of the jury to render a verdict in the law action in favor of the plaintiff or defendant may so cloud their judgment as to render their advice unsafe to follow. We are of the opinion that the failure of the trial court to try the equitable issues raised by the pleadings as a court of equity prior to the trial of the action for damages, as requested by counsel for the defendant, was prejudicial error, in view of the character of the evidence and the charge of the court." To a similar effect are Fay v. Hill, 8th Ct., 249 Fed. 414, 418; Cavender v. Virginia Bridge & Iron Co., N. D. Georgia, 257 Fed. 877.
The statute obviates the former necessity of an injunction against an action at law to which an equitable defense exists.
In the Fourth Circuit it has been said that this statute does not authorize a transfer to the equity side of the court of an action improperly brought at common law;? but it has been held in the Second Circuit to the contrary.8 The proper method of raising such an objection is a motion to transfer the case to the equity side of the court.9 In a suit in equity when the defendant filed a plea to the jurisdiction because there was an adequate remedy at law and failed to move to transfer the case to the common law side of the court, it was held that the objection was waived. 10
Before the Act of March 3, 1915, an equitable defense could not be pleaded at common law, 11 although this was permitted by the State practice. 12
6 United Timber Corp. v. Bivens, 248 Fed. 554.
7 Waldo v. Wilson, C. C. A., 231 Fed. 654, 656, 658 per Pritchard, J.: “This section relates only to the power of the court in a case where a suit has been improperly brought, either on the equity or the law side of the court and provides that the same be amended so as to have the pleading conform to the proper practice
under the circumstances the court should have dis. missed the suit, instituted on the law side of the court with leave to institute a suit on the equity side, and this could only have been done by filing a bill and issuing a subpena as required by the equity rules.”
8 Illinois Surety Co. v. U. S., C. C. A., 212 Fed. 136.
9 Illinois Surety Co. v. U. S., C. C. A., 212 Fed. 136, 139, 140 per Ward, J.:
"The better way to have raised the question would have been by moving to have the cause transferred from the law to the equity calendar but it has been
The judgment is reversed, and the court below directed, to transfer the cause to the equity calendar for hearing. The mandate may be modified so as to provide that the judgment be reversed, without prejudice to a motion in the District Court to transfer the cause to the equity calendar.'' The objection was there raised when the cause was reached on the common law calendar, “That the causes of actions and the complaints were in equity and not at law and that the court had not jurisdiction to try the suit.''
10 Fay v. Hill, C. C. A., 8th Ct. 249 Fed. 415, 417, supra, $ 366a.
11 Bennett Butterworth, 11 How. 669; Montijo v. Owen, 1.4 Blatchf. 324; Parsons v. Denis, 7 Fed. 317; Doe v. Roe, 31 Fed. 97; Buller v. Slidell, 43 Fed. 116; Young v. Mahoning County, 51 Fed. 585, 590; Davis v. Davis, C. C. A., 72 Fed. 81; Schoolfield v. Rhodes, 82 Fed. 153.
An equitable estoppel might be pleaded in an action of ejectment at common law. 13
The defense of mistake as to a material fact which induced the execution of a contract had to be tried on the equity side of the court, when it is not denied that the parties knew the nature of the paper which was executed,14 although a material provision of the contract was omitted by mutual mistake.16 A defense of fraud which related to the execution of the contract such as a misreading or mis-statement of its contents surreptitious substitution of one paper for another 17 or the obtaining by some other trick or device an instrument which the pleader did not intend to give, 18 before the statute, might be pleaded at common law. So it was held in some cases might be the defense of any fraudulent representation, when the instrument was not under seal. 19 Where the contract was under seal,
18 Dickerson v. Colgrove, 100 U. S. 578, 582, 25 L. ed. 618, 620; Wehrman v. Conklin, 155 U. S. 327, 39 L. ed. 173; Marine Iron Works v. Wiess, C. C. A., 148 Fed. 145; Kirk v. Hamilton, 102 U. S. 68, 26 L. ed. 79; Nat. Nickel Co. v. Nevada Nickel Syndicate, C. C. A., 112 Fed. 44, 46; Cheatham v. Edgefield Mfg. Co., 131 Fed. 118.
But see Mulqueen v. Schlichter Jute Cordage Co., 108 Fed. 931; Highland Boy G. Min. Co. v. Strickley, C. C. A., 116 Fed. 852.
14 U. S. v. Rosenthal, 210 Fed. 555; see Wellman v. Bethea, C. C. A., 228 Fed. 882, an action at law for a personal injury. Held that it was no objection to a release, offered in evidence by the defendant, that the plaintiff did not know when he signed it, that it was a general release, or that he had sustained any physical injury, there being no proof of fraud, misrepresentation or mental incompetency at the time of its execution. Simpson v. Pennsylvania R. Co., C. C. A., 159 Fed. 423.
But see Great Northern Ry. Co. v. Reid, C. C. A., 9th Ct., 245 Fed. 86, infra.
16 Holbrook, Cabot & Rollins Corp. v. Sperling, C. C. A., 239 Fed. 715.
16 Union Pac. Ry, Co. v. Harris, C. C. A., 63 Fed. 800; Drobney v. Lukens Iron & Steel Co., C. C. A., 204 Fed. 11; Standard Portland Cement Co. v. Evans, C. C. A., 205 Fed. 1; Cline v. Southern Ry. Co., 231 Fed. 238.
17 Standard Portland Cement Co. v. Evans, C. C. A., 205 Fed. 1.
18 Ibid, Union Pac. Ry. Co. v. Harris, 158 U. S. 326, 15 Sup. Ct. 843, 39 L. ed. 1003. 19 Wagner v.
National License Co., C. C. A., 90 Fed. 395; Such V. Bank of State of N. Y., 127 Fed. 450; American Sign Co. v. ElectroLens Sign Co., 211 Fed. 196; Columbia-Knickerbocker Trust Co. v. Abbot, C. C. A., 247 Fed. 833; Levi v. Mathews, C. C. A., 145 Fed. 152; Contra, Maine N. W. Developinent Co. v. Northern Commercial Co., 213
before the statute it could only be set aside in a suit in equity,80 unless the plaintiff was deceived as to the contents of the paper which he executed, so that it was not in fact his deed.21
It has been held that a general release of personal injuries resulting from an accident does not cover an injury, such as hernia, not in contemplation of the parties and then unknown to each.22
Ordinarily, a contract could not be attacked at law for fraud unless the plaintiff first returned or tendered upon the trial, the money received as the consideration for its execution ; 23 except in cases where it was conceded or indisputably proved, that he was entitled to as much as he had received.24 It has been held that this rule does not apply where the fraud consisted in a misrepresentation as to the nature of the paper executed.25 tender upon the trial is in any event sufficient.26 In equity an
Fed. 103. See Hartshorn v. Day, 19 How. 211, 222, 15 L. ed. 605; Ivinson v. Hutton, 98 U. S. 79, 25 L. ed. 66; George v. Tate, 102 U. S. 564, 570, 26 L. ed. 232; Shampeau v. Lumber Co., 42 Fed. 760; Johnson v. Granite Co., 53 Fed. 569; Vandervelden v. Railroad Co., 61 Fed. 54; Kosztelnik v. Iron Co., 91 Fed. 606; Hill v. Northern Pac. Ry. Co., C. C. A., 113 Fed. 914, 917.
20 Whitcomb v. Shultz, C. C. A., 222 Fed. 268; Union Pac. R. Co. v. Syas, C. C. A., 246 Fed. 561; Miller v. Williams, 258 Fed. 216. Contra dicta in Wagner v. National License Co., C. C. A., 90 Fed. 395; Maine N. W. Development Co. v. Northern Commercial Co., 213 Fed. 103.
21 Maine N. W. Development Co. v. Northern Commercial Co., 213 Fed. 103, 104. But see Standard Portland Cement Corporation Evans, C. C. A., 205 Fed. 1.
22 Great Northern Ry. Co. v. Reid, C. C. A., 245 Fed. 86.
28 Hill v. Northern Pac. Ry. Co.,
C. C. A., 113 Fed. 914; Price v. Connors, C. C. A., 146 Fed. 503; Heck v. Missouri Pac. Ry. Co., 147 Fed. 775; North Chicago St. Ry. Co. v. Chicago Union Traction Co., 150 Fed. 612; Cook. v. Fidelity & Deposit Co., C. C. A., 167 Fed. 95; Mahr v. Union Pac. Ry. Co., C. C. A., 170 Fed. 699; Standard Portland Cement Co. v. Evans, C. C. A., 205 Fed. 1; Maine N. W. Developinent Co. v. Northern Commercial Co., 213 Fed. 103; Columbia Digger Co. v. Rector, 215 Fed. 619.
24 Billings v. Aspen Mining & Smelting Co., C. C. A., 51 Fed. 338, 350; App. Div. (N. Y.) 286; Johnson v. Chicago M. & St. P. Ry. Co., 224 Fed. 196, 199.
25 Muller v. Old Colony R. R. Co., 127 Mass. 86; Cleary v. Municipal El. L. Co., 47 N. Y. State Rep. 172, aff'd 139 N. Y. 613; Herman v. Fitzgibbons Boiler Co., 136 App. Div. (N. Y.) 286.
26 Yuharsze v. Carnegie Steel Co., C. C. A., 2nd Ct., June 8, 1915, in which the author was counsel.
offer to return the money was all that was required, 27 and where the return was impossible, a provision for its credit to the defendant might be made in the final decree.28 Where the fraud consisted in the conduct of an officer of a corporation in inducing its execution of a contract, in which he was interested, it was held that the contract was illegal as against public policy, and that such a defense was available at law.29 When by contract, payments were to be made upon the certificates of an architect or engineer the better opinion was, before the statute, that such certificates could be attacked for fraud by a defense to an action at common law.30 They could not be attacked for a mistake except in equity.31 The defense of failure of consideration,82 subrogation ; 88 non-assignability, 34 and it has been held champerty 35 could be pleaded at law, .
$ 454h. Counterclaims and set-offs. Set-offs and counterclaims should be pleaded in accordance with the State practice.1
An equitable set-off can now be pleaded in an action at common law under the statute previously quoted. Before this enactment, the pleading of an equitable set-off was not allowed at common law ; 3 but where the State practice so permitted, the
27 Allerton v. Allerton, 50 N. Y. 670; Gould v. Cayuga County Nat. Bank, 86 N. Y. 75, 83, supra, $ 153.
28 Thackrah v. Haas, 119 U. S. 499, 7 Sup. Ct. 311, 30 L. ed. 486.
29 Maine N. W. & Dev. Co. v. Northern Commercial Co., 213 Fed. 103.
30 Louisville-Evansville & C. Ry. Co. v. S. P. Meyer, U. S., C. C. D. Ky., per Barr, J.: aff'd by divided court 30 L. ed. 689, which contains the opinion below; Chism v. Chiffer, 51 N. J. Law 1; Baltimore & O. Ry. Co. v. Polly Woods Co., 14 Grattan (Va.) 448; School Distriet v. Randall, 5 Nebraska 408, 410. Contra, Wood v. Chicago, S. F. & C. Ry. Co., 39 Fed. 52; Cook v. Foley, C. C. A., 8th Ct., 152 Fed. 41, 51; Herrick v. Belknap & Vt.
C. R. Co., 27 Vt. 673, See South Eastern Ry. Co. v. Warton, 2 Foster & Finlayson, 457, 464.
31 Newlan v. Duncan, 60 III. 233.
32 Am. Sign Co. v. Electro-Lens Sign Co., 211 Fed. 196.
33 Platte Valley C. Co. v. Bosserman-Gates Live S. & L. Co., C. C. A., 202 Fed. 692.
34 General Film Co. v. Sampliner, 6th Cir., C. C. A., 252 Fed. 443.
35 Ibid. But see Byrne v. Kansas City Ft. S. & M. Ry. Co., 55 Fed. 44.
$ 454h. 1 Act of March 3, 1915, 38 St. at L. 956 Comp. St. $ 1251b quoted supra, $ 454g.
2 1. & St. L. R. Co. v. Horst, 93 U. S. 291, 301, 23 L. ed. 898, 901; Phelps v. Oaks, 117 U. S. 236, 239.
3 Scott v. Armstrong, 146 U. S. 499, 36 L. ed. 1059.