277 F. 367 | 8th Cir. | 1921
This action was commenced’ by appellee, hereafter plaintiff, a corporation of Minnesota, against appellant, hereafter defendant, to foreclose a mortgage given by the latter to the Arlington Land Company, a corporation of Colorado, and of which mortgage and the debt secured thereby plaintiff claimed to be the owner. Defendant pleaded “for counterclaim and for affirmative relief” substantially as follows:
That the Mosota Land Company is a corporation organized under the laws of the state of Colorado, with its principal place of business in Minneapolis, Minn.; 'that Samuel S. Thorpe is its president, James H. Pershing vice president, and Thomas Peebles secretary and treasurer, and that the said three officers constitute its board of directors; that the object for which it is created is to take, hold, lease, mortgage, and convey personal property, to give and take conveyances, leases, mortgages, deeds of trust, negotiable instruments, and pledges, to take, hold, manage, and develop its properties and to acquire water rights and operate waterworks and irrigation systems.
That the Arlington Land Company, the Mosota Land Compaq, and the complainant, Thorpe Bros., are in fact one and the same, except in name, and are owned, officered, and controlled by Samuel S. Thorpe and Thomas Peebles, and that ever since 1914, and prior thereto, háve been directed and controlled by Samuel S. 'Thorpe and Thomas Peebles as instruments and for the purpose of defrauding the defendant as hereinafter set forth. •
That in 1914 Thomas Peebles and Samuel S. Thorpe represented unto this defendant that they were the real owners in fee simple of the 9,537 acres of land described in the mortgage in plaintiff’s bill of complaint mentioned, that for their convenience the title was vested in a corporation known as the Arlington Land Company, and that the said Thorpe and Peebles sold to the said defendant the aforesaid land, reserving however, the coal thereon, the said land to be paid for by defendant, $3,293 in cash and four notes, aggregating $16,777.70. That the said defendant immediately went into possession of said lands under said agreement of sale and on April 24, 1914, paid unto the said Thorpe and Peebles the sum of $3,293 in cash, and executed what the defendant then supposed to be the notes and mortgages drawn according to the terms of the said sale, it being understood that the said Thorpe and Peebles were to have the deed to the said land so sold the defendant executed, conveying the said land, excepting the coal therein, in fee simple absolute, with full covenants of warranty, and would cause the same to be recorded, and, when recorded, would deliver same to the defendant; but the said Thorpe and Peebles, combining and confederating with the Arlington Land Company and the Mosota Land Company, for the purpose of cheating and defrauding this defendant, fraudulently and without the knowledge of this defendant caused the Arlington Land Company on the 23 d day of March, 1914,
That the said Peebles and Thorpe for a like fraiuiulent purpose caused the deed for the said lands to this defendant, and the said notes and the said mortgage to be antedated for the fraudulent purpose of extorting unearned interest, and for a further purpose of cheating and defrauding this defendant the said Thorpe and Peebles represented that the said tract of land contained 9,537 acres, whereas in truth and in fact the said tract contained only 9,272 acres, or a shortage of 265 acres, whereby, on account of said shortage, defendant has lost the said lands, of the value of $26,500; that the deed of the Arlington Land Company to the Mosota Land Company is a cloud upon the title of this defendant, and should in equity and good conscience be removed, and that the deed from the Arlington Land Company to this defendant should in equity and good conscience be reformed and corrected to conform with the agreement of sale; that similar representations were made by the said Thorpe and Peebles as to another tract of land containing 3,133 acres, which were contracted to be sold by them unto the said defendant John Looney under the same conditions as the tract hereinabove referred to, which said deed, however, fraudulently contained similar exceptions to those herein-above set forth, and that the said Thorpe and Peebles, at such time of sale, for the purpose of cheating and defrauding this defendant, purpose!}- suppressed from this defendant, at the time he purchased the said tract of land containing 3,133 acres, the fact that the Arlington Land Company had previously conveyed to the Mosota Land Company certain interests in said lands, and that this defendant had no knowledge of the conveyance of such interests to the Mosota Land
The prayer based upon the counterclaim was substantially as follows :
The defendant prays for the following relief: That the said Samuel S. Thorpe, Thomas Peebles, Arlington Land Company, and Mosota Land Company be made parties to this suit by the plaintiff; that they be compelled to answer this counterclaim; that an accounting be had of the full amount of money the defendant has paid on the said mortgaged indebtedness, the number of acres that the said tract falls short, the damage sustained by the defendant by reason of said shortage, and that the same be allowed as a counterclaim against the said complainants, Samuel S. Thorpe, Thomas Peebles, or the Arlington Land Company; that the deed from the Arlington Land Company to the Mosota Land Company and the record thereof may be set aside and canceled; that, the exceptions and reservations in the mortgage deed from John Looney to the Arlington Land Company be ordered to be stricken; that the exceptions and exclusions contained in the deed from the Arlington Land Company to John Looney, and other recitals therein specified, be stricken out of said deed and record thereof as being inserted therein unlawfully and fraudulently, and as a cloud upon the title of the defendant, and that the said deed he reformed to speak the truth; that the deeds of the Arlington Land Company to the Mosota Land Company in this pleading referred to be declared void as to this defendant, not only as a fraud upon the defendant, but for want of power in the Mosota Land Company to deal m real estate.
Plaintiff moved the trial court for an order striking out th$ counterclaim. The order asked for was granted, subject to the right of defendant to file an amended answer within 15 days if he should be so advised. This ruling is the first error assigned. Defendant denominated the pleading upon which he asked affirmative relief a counterclaim and made no effort to have it called anything else. Federal equity rule 30 (201 Fed. v, 118 C. C. A. v),'so far as material reads as follows:
“The answer must state in short and simple form any counterclaim arising out of the transaction which is the subject-matter of the suit, and may, without cross-bill, set out any set-off or counterclaim against the plaintiff which might be the subject of an independent suit in equity against him.”
The decree appealed from is affirmed.