GENERAL INSURANCE COMPANY OF AMERICA, Plaintiff and Respondent, v. CARNICERO DYNASTY CORPORATION, a corporation, et al., Defendants and Appellants.
No. 13836.
Supreme Court of Utah.
Jan. 9, 1976.
David Lloyd and Walter P. Faber, Jr., Watkins & Faber, Salt Lake City, for plaintiffs and respondents.
TUCKETT, Justice:
The defendants appeal from a summary judgment entered by the court in favor of the plaintiffs and the denial of the defendants’ motion for a writ of restitution and for a summary judgment. This matter was before the court on a prior appeal wherein the plaintiffs sought specific performance of a rental agreement with an option to purchase.1 The judgment entered by the district court after the first trial granted specific performance and directed the defendants to convey the property in question to the plaintiffs. This court reversed and remanded. After remand the plaintiffs and the defendants filed motions for summary judgment. The grounds for the plaintiffs’ motion being that the controversy had been settled and the case had become moot. The defendants move for restitution of the property.
Before the first appeal the defendants complied with the decree of the court below by conveying the property in the specified time and in accordance with the terms of the decree. Defendants, being unable to supply a supersedeas bond, nevertheless pursued their appeal. The question of mootness was presented to this court as indicated by the dissent, but that matter was not decided. The effect of the decision of this court was to vacate and set aside the decree of specific performance heretofore entered and the judgment of the court respecting damages. It was the duty of the trial court after remand to place the parties, insofar as possible, in the position they had before the erroneous decree and judgment which was rendered.2 In this connection the court should determine damages, if any, suffered by the parties by reason of the entry of the erroneous decree.
The decision of the court below is reversed and the court is directed to proceed in accordance with the terms of this opinion. Appellants are entitled to costs.
HENRIOD, C. J., and ELLETT, CROCKETT and MAUGHAN, JJ., concur.
Wallace R. Lauchnor, Bayle & Lauchnor, Salt Lake City, for plaintiff and respondent.
MAUGHAN, Justice:
Plaintiff initiated this action to recover pursuant to certain indemnity agreements. The matter was tried before the court and judgment was rendered against defendants.
Butcher was property manager for defendant Carnicero Dynasty Corporation, a construction company. Neither Butcher nor his wife was a shareholder or an officer of the corporation. Butcher, in his capacity as property manager, contacted plaintiff to procure a bid bond and payment and performance bonds for the corporation required by the government for the construction of a post office. Prior to issuing the bonds, plaintiff gave Butcher certain indemnity agreements to be executed by the officers of the corporation. Butcher, pursuant to instruction, procured the execution of the indemnity agreements by the individuals specified. Thereafter, plaintiff issued the bonds. Slightly over four months thereafter, plaintiff by its local agent requested the Butchers to sign an indemnity agreement, which they did. Rules cited refer to Utah Rules of Civil Procedure.
The evidence concerning the circumstances within which the Butchers individually executed the indemnity agreements was adduced during the presentation of the plaintiff‘s case. The testimony is summarized by the trial court in its remark that the insurance company as an obvious afterthought sent its agent to procure the signatures of Mr. and Mrs. Butcher on the indemnity agreement. Butchers’ counsel made a motion, under
The trial court denied this motion, on the ground that lack of consideration was an affirmative defense, of which the plaintiff had no notice. The trial court conceded that Butchers were not informed of the date of the indemnity agreement in the complaint but noted that a copy of the agreement was attached to certain interrogatories which were delivered on January 17, 1974. The court was of the opinion that this information as to the date of the indemnity agreement supplied a sufficient ground for Butchers to have amended their answer prior to the date of trial on May 22, 1974.
Plaintiff, in its complaint, alleged:
That the defendants, and each of them, in consideration for the issuance of said bonds, executed a General Agreement of Indemnity indemnifying the plaintiff herein for any and all loss that it might suffer as the result of its issuing said bonds.
Butchers, in their answer, neither admitted nor denied this averment, as required in
A defense that merely controverts plaintiff‘s prima facie case is negative in character and should be pleaded in accordance with
There is a distinction between lack of consideration and failure of consideration. Where consideration is lacking, there can be no contract. Where consideration fails, there was a contract when the agreement was made, but because of some supervening cause, the promised performance fails.2 Thus, failure of consideration
There is one other aspect which should be considered in connection with the trial court‘s denial of Butchers’ motion to amend their answer. The trial court emphasized that Butchers should have amended their answer after receiving the answers to the interrogatories approximately four months prior to the trial. (The action had been commenced 3 1/2 years previously.) However, the applicable law regarding this matter does not indicate that the defense of lack of consideration would become apparent merely by being apprised that the indemnity agreement was executed subsequent to the issuance of the bonds.
. . . the execution of a bond of indemnity subsequent to the execution of the original undertaking will have the same force and effect as if it were executed simultaneously with the original undertaking, if its subsequent execution was pursuant to an arrangement or agreement between the indemnitee and the indemnitors, at the time or before the indemnitee became bound, that there should be executed to it a bond of indemnity. [Citations omitted.]3
During the presentation of plaintiff‘s case, the facts were adduced that there had not been an arrangement between Butchers and plaintiff, prior to the time that plaintiff became bound under the bond, that Butchers would execute an indemnity agreement. Plaintiff, as an afterthought, requested Butchers’ signatures on an agreement. Thus the evidence indicated that the agreement under which plaintiff sought recovery was lacking in consideration and was not a contract.
Butchers moved to amend their answer to conform to the evidence under
The treatise by Moore explains that an amendment to conform to evidence may be made at any time on motion of any party. The parties may, by express consent, or by the introduction of evidence without objection, amend the pleadings at will. During the trial if a party expressly requests leave to amend to conform pleadings to the proof adduced and to reflect issues raised by either express or implied consent, such leave should be granted.7
The purpose of an amendment to conform to proof is to bring the pleadings in line with the actual issues upon which the case was tried. There must, of course, be either express or implied consent of the parties for the trial of issues not raised in the pleadings. Implied consent may be found where one party raises an issue material to the other party‘s case, or where evidence is introduced without objection.9
Significantly, the first part of
In the instant action, the evidence upon which Butchers based their motion to amend was introduced without objection, and thus the issue of consideration was tried by implied consent. The trial court denied the motion apparently upon the ground of undue delay, but such standards are applicable only to motions based on the second part of
The judgment of the trial court is reversed and this cause is remanded for a new trial. Costs to appellant.
ELLETT and TUCKETT, JJ., concur.
CROCKETT, Justice (concurring, but expressing reservations):
I concur in the remand for a new trial and generally with what is said in the main opinion. But I make these comments: A plenary examination into and resolution of the issue as to whether there was lack of consideration for the Butchers’ signature seems to be necessary to a proper and just determination of the controversy. While it may appear from the facts as recited that there was no consideration for the later obtained signatures of the Butchers, it does not appear what the plaintiff Insurance Company did in reliance on the Butchers’ promises either before or after their signature.
Notwithstanding what is said in the opinion about the apparent mandatory character of
Except as to a party against whom a judgment in entered by default, every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.
HENRIOD, C. J., concurs in the views expressed in the opinion of CROCKETT, J.