Morton v. Morris

72 F. 392 | 8th Cir. | 1896

THAYER, Circuit Judge,

after stating the case as above, delivered the opinion of the court.

The record shows that on the hearing before the master and in the circuit court no evidence was offered by the defendant, Charles A. Morton, tending to support any of the allegations of his answer, although a replication thereto was duly filed. The contention in behalf of the defendant seems to have been that, because .the complainant had demurred to the cross bill, and the same had been sustained, the demurrer operated as a conclusive admission of all the facts pleaded in the answer as well as in the cross bill, and that it was, therefore, unnecessary to offer any proof for the purpose of establishing the averments of the answer. We do not find it necessary on the present occasion to decide whether this view regarding the effect of the demurrer is well founded or otherwise, for-, even if the demurrer operated as an admission of the facts stated in the answer as well as in the cross bill, it was only an admission of such facts as were well pleaded, and the facts so pleaded, taken altogether, were insufficient, in our judgment, either to warrant a decree in favor of the defendant on his cross bill, or to justify the circuit court in refusing the relief prayed for by the plaintiff in his bill of complaint. •

It was shown by the averments contained in the defendant’s answer and cross bill that on June 20, 1893, there was an unsettled account between the parties to the suit, growing out of previous business transactions which had extended over a period of 10 years, and that the defendant, who had acted throughout the entire period as agent for the plaintiff in loaning money, and for a portion of the time as his copartner in the banking business, was largely indebted to the plaintiff by reason of such relations and transact ions. Tnder these circumstances, the plaintiff’ had an undoubted right to call upon the defendant for a settlement and an accounting, and to enforce the demand by a suit in equity if a settlement was either deferred or refused. And, inasmuch as the affairs of the copart-nership remained open and unadjusted, the plaintiff also had tin-right to ask for the appointment, of a receiver of the property of the firm if he and his copartner failed to agree upon a division thereof, or as to the proper custody of the same, pending an adjustment of the partnership affairs. The only threat complained of in the answer and in the cross bill which appears to have been at any time made by tbe plaintiff was a threat to bring a suit to enforce a settlement and an accounting if an amicable adjustment was not reached, and, such being the case, we fail to see that the agreement of June 20, 1893, under and in pursuance of which the mortgage and mortgage notes were executed, was brought: about by any such unlawful or unfair means as will serve to render the agreement voidable, either in a court of law or equity. In a legal sense, a person cannot be said to have taken an undue advantage ol‘ another, or to have done any wrong, when he merely threatens to «mforce his rights by a civil action in tbe ordinary form. On the argument of the case some stress was laid on the averments contained in the answer to the effect that the defendant was called upon for a settlement, when he was largely in debt, and when the times were unpropitious: also on the averment that the demand was made at that time by the plaintiff in bad faith, to coerce an inequitable settlement. These averments are not sufficient, in our opinion, to entitle the defendant to equitable relief. In the world of business it is usually the case that men are most urgently pressed to pay their debts when they .are deeply involved, and the times are stringent, or when a fm'ancial panic is imminent. On such occasions the instinct of self-preservation often compels creditors to be more prompt and persistent, if not more exacting, in enforcing their demands, than they would be under other conditions. It is highly creditable to a man, no doubt, if be can so far overcome the dictates of self-interest as to be indulgent to his honest debtors in times of great business depression, but we are unable to say that it is a creditor’s legal duty to be thus lenientwhen the times are hard, or to defer pressing for a settlement of his claims until a more convenient season. Nor are we able to say that In the forum of equity a creditor should be adjudged guilty of such unconscionable conduct -as will vitiate securities taken from his debtor to secure a bona fide indebtedness, merely because he saw flt to insist upon a settlement when values were declining, and when if was most inconvenient for the debtor to meet Ms obligations.

With reference to the allegation contained-in the answer and cross bill that the demand for an accounting was made in bad faith, to coerce an unjust settlement, it is only necessary to say ¡hat, inasmuch as the acts done and performed by the complainant were clearly lawful, we fail to perceive that the motives which may have prompted him to demand a settlement and an accounting are at all material. The intent which actuates -a creditor in seeking to enforce a legal claim or demand is ordinarily of no concern to the debtor, and is not a matter for judicial inquiry. The latter is only entitled to complain when some act is. done or threatened by the creditor which is, in itself, unlawful, or is contrary to equity. In the present case the acts charged in the answer as the basis for relief consisted in a demand made by the plaintiff for an accounting and settlement when the defendant was in embarrassed circumstances, and in a threat to enforce such demand by a civil action. Neither of these acts was unlawful, or so far harsh, oppressive, or unconscionable as to vitiate the settlement subsequently made. Silliman v. U. S., 101 U. S. 465; Hackley v. Headley, 45 Mich. 569, 8 N. W. 511; Snyder v. Braden, 58 Ind. 143; Dunham v. Griswold, 100 N. Y. 224, 3 N. E. 76; Fuller v. Roberts (Fla.) 17 South. 359; McClair v. Wilson, 18 Colo. 82, 31 Pac. 502; Farmer v. Walter, 2 Edw. Ch. 601; Skeate v. Beale, 11 Adol. & E. 983; Wilcox v. Howland, 23 Pick. 167.

It should be further noted that it does not appeal’ from the allegations of the defendant’s answer and cross bill, with the requisite certainty, that the settlement eventually agreed to was in any respect unjust and unfair. The answer contains the averment “that in the opinion of the defendant, the [settlement] was unjust and unfair,” and the further averment “that all the property, both real and personal, wthich by the terms of said settlement was to become the property of the defendant, was * * * valued by the defendant, for the purpose of said final settlement, far above its actual value, and that a large part of said property which by the terms of said settlement the defendant was to take and own for his own use and benefit has since the execution and making of. said final settlement greatly depreciated in value, and that none of said property so taken by the defendant has appreciated over and above such estimated values”; but to what extent, in dollars and cents, the property in question was overvalued, is not. stated; neither is it averred that the plaintiff was solely instrumental in caus-, ing such overvaluation. On the contrary, inasmuch as the plaintiff was a resident of the province of Ontario, Canada, while the defendant was a resident of the state of North Dakota, and had made all of the investments in that state, it is fair to presume, as the allegations of the answer and cross bill would seem to imply, that the defendant had more to do with placing values on the property that figured in the settlement than the complainant. At all events, the allegations of the answer in this respect are so general and indefinite that they fail to satisfy us that when the plaintiff called upon the defendant for a settlement, he first placed an exaggerated value on the property to be divided, and then took advantage of the defendant’s necessities to compel him to take an undue proportion thereof at such exaggerated valuation.

Some other questions are discussed in the briefs of counsel, which have been duly considered,- but, in our judgment, they are not of sufficient importance to justify special mention. It results from the foregoing views that the decree of the circuit court was for the right party, and ought not to be disturbed.

We have been asked by counsel for the appellee to affirm the decree of the circuit court with 10 per cent, damages, in accordance with subdivision 2 of rule 30 of this court (11 C. C. A. cxii., 47 Fed. xiii.), on the ground that the appeal was taken merely for delay. We think, however, that the case is not one which would justify an allowance of damages. In lieu thereof an order will be entered affirming the decree, and directing the mandate to issue at the expiration of 10 days.