Tecumseh State Bank v. Maddox

The opinion of the court was delivered by Tabsney, J.: We deem it unnecessary to consider the question raised by the first assignment of error as to whether the court below erred in sustaining the demurrer to the original answer, as the error therein, if any, was waived and cured by the failure of the plaintiff in error to stand therein, and by the filing of its amended and1 supplemental answer, and as the amended and supplemental answer contains in addition to the new matter therein stated, all the material allegations of the original answer, the entire question is presented by the ruling of the court in sustaining a demurrer to such amended supplemental answer. A peculiar condition is presented by the pleadings in this cause. The defendant in error, having filed, on the same day, and presumably at the same time, a demurrer to the amended answer, and also a reply thereto, the reply specifically denying certain of the material allega-' tions in said answer. These pleadings are inconsistent.' — 590 — A demurrer, for the purposes thereof, admits the truth of all the material allegations in the pleading, and a party cannot, at one and the same time, admit and deny the truth of the allegations set forth in a pleading. But as the court below appears to have ignored this reply and given it no consideration, and no objection or exception appears in the record to its filing, we will treat the case as though no such reply was in the record. Counsel for defendants in error contend that the new matter set up in the amended answer was not proper subject matter of amendment, that it was not an amendment, but was new, distinct and entirely different matter which shifted and changed the defense upon foreign grounds not occupied or contemplated in the original answer; that it presented a different issue from the one tried in the probate court, and therefore was not permissible under the statutes relating to amendment. The statute relating to amendment, § 4017, of ch. 66. Code of Civil Procedure, is very liberal; but whether sufficiently liberal to permit such an amendment, is not necessary for us here to determine. The subject of amendment to pleadings is largely in the discretion of the court, and the question whether a court exceeds its discretion in the matter of allowing an amendment, is not one that is raised by demurrer. A demurrer does not go to the right of incorporating matter in a pleading but to the sufficiency of such matter, The defendant in error, not having, by motion to strike such answer from the files, or other proper proceeding, under the rules of prac. tice, raised the question, but having chosen to challenge its sufficiency by demurrer, has not preserved the question of the right of the court to permit such amendment. The only question therefore in the case is: Did the said amended supplemental answer present a good and — 591 — sufficient defense to the cause of action stated in plaintiff’s petition? This is to be determined by a consideration as to whether the facts stated in such answer, and the agreements therein alleged between the said Wogo-man and the said Benson, constituted a good and sufficient consideration for the assignment of tlie moneys deposited by said Wogoman with the plaintiff in error to said Benson. The amended answer alleged that Benson, prior to the deposit of said money in the bank, bad contested the homestead entry of one Owens on the grounds that said Owens was disqualified to make entry of such land; that he had presented 'his evidence in said contest case, paid all charges and fees and had proven Owens disqualification; that the register and receiver of the land office had decided in favor of said Benson and had recommended to the general land office that Owen’s entry be cancelled and that the preference right to :make homestead entry of said land be awarded to said Benson.' That Benson, as a contestant for said land, had valuable improvements thereon, a house, fences and plowed ground and other improvements. That when his preference right was approved by the general land office, he was to surrender the same and permit Wogoman to file thereon without any contests' by him, Benson", and without any assertion by him, Benson, of such preference right. That when Wogoman should make entry on such land, the personal property and improvements thereon should be his. Did this constitute a good and sufficient consideration, for the assignment by Wogoman to Benson of the $1,000 deposited in the bank? The authorities seem to leave no question or doubt that such agreement constitutes a good consideration for such an assignment. We can discover no difference in — 592 — principle or material distinction in facts between this case and the case of Pelham et al. v. Service, supreme court of Kansas, March, 1891, 26 Pac. Rep. 29. In that case Service had made, a homestead entry upon certain lands in Wichita county, Kansas, and had pending a protest against the final proof of one William H. Montgomery on and to said land in the WaKeeney land office. To settle the question of conflict of right to the same, it was agreed between Pelham et al. and said Service that; in consideration of said Service furnishing to the other parties to the agreement a relinquishment to his homestead entry and a written withdrawal and dismissal of said protest and hearing, the other parties to the agreement should pay to said Service the sum of |5,000. .Service brought suit on this agreement for the $5,000, alleged performance on his part and demanded judgment. There was a demurrer to his petition for the reason that it did not constitute a cause for action, the pith of the demurrer being that there was no consideration for the agreement, the contract itself, and the petition on its face showing the facts, that Service had no possessory right in the land, had nothing to sell and could transfer nothing to the plaintiffs in error. The demurrer was overruled and the overruling of such demurrer was the only question presented to or considered by the court. In that case, the court said: “ Contracts about the possession, improvements and relinquishments of rights on public lands, when free from fraud, can be enforced and constitute a good consideration.” The doctrine of the case being that the relinquish ment of a right to a homestead entry on public lands, and the withdrawal of a written protest against the final — 593 — proof of another, is a good and valid consideration in a written instrument for tbe payment of money. In McCabe v. Carter, 68 Mich. 182, it was held that where a defendant executed to plaintiff certain promissory notes in consideration of plaintiff’s agreement to relinquish and surrender to the government his certificate of homestead entry to enable defendant to locate the land, and the surrender was made as agreed, it was a valid, con-, sideration for the notes. The record in that case discloses the fact that the plaintiff had entered under the homestead law of the United States a parcel of land in Clare county, subject to such entry, and received a certificate of entry from the land office; that the notes in question were given. by .the defendant to, the plaintiff upon the agreement of the plaintiff that he would sur-' render his certificate of entry to the government and would relinquish all his interest thereunder to the government at the request of the defendant, to enable the defendant to locate said land and acquire the interest of the plaintiff therein; thát such was the sole consideration given for said notes. The court, in the opinion in the case, says: “We have no doubt about' the correctness of this decision upon the defendant’s own showing. The testimony of the misrepresentation and fraud was not admissible under the pleadings, and has no rightful place in the case and should have been excluded when objected to. The plaintiff performed his agreement as the testimony shows, and it was a legal, one. The government had not found fault with the plaintiff’s conduct in the premises at the time the notes were given; and the testimony tended to show that it stood ready to recognize the homestead rights he surrendered! for the note; and they were a legal consideration therefor. Eeally the govern-' ment could enforce it or not as it chose. The plaintiff’s relinquishment of his rights in the premises was a good consideration for the notes.” — 594 — The court cited, in support of its decision therein, Olson v. Norton, 8 N. W. Rep. 878; Thompson v. Hanson, 11 N. W. Rep. 86; Lamb v. Davenport, 18 Wall. 307; Myers v. Croft, 13 Wall. 291; Kennedy v. Shaw, 43 Mich. 359; Sanford v. Huxford, 32 Mich. 318; Rood v. Jones, 1 Doug. [Mich.] 188. In Lamb v. Davenport, 18 Wall., the supreme court of the United States says: “The right of the United States to dispose of her own property is undisputed, and to make rules by which the land of the government that is sold or given away is acknowledged; but, subject to these well known principles, parties in possession iff the soil might make valid contracts even concerning the title predicated upon the hypothesis that they might thereafter lawfully acquire the title, except in cases where congress has imposed restrictions on such contracts.” And in that case the court held that unless forbidden by ■some positive law, contracts made by actual settlers upon the public lands concerning their possessory rights, and ■concerning the title to be acquired in the future from the United States, are valid as between the parties to the ■contract, though there be at the time no act of congress by which the title may be acquired and though the government is under no obligation to either parties in regard to the title. In Thompson v. Hanson, 11 N. W. 86, the facts stated were: That defendants Hanson and Johnson entered Into an agreement with the plaintiff by the terms of which he was to procure the cancellation of the entry of one Holmes and then enter the land under the timber •culture act for Hanson’s benefit. In consideration of this agreement, defendants executed a note for $200 upon which the suit was brought. Holmes’ entry was cancelled July 1, 1878. On July 2, 1878, plaintiff filed — 595 — with the register of the Worthington, Minn., land office an affidavit and paid a fee of ten dollars as prescribed by statute. This was done in the name'of and for the use and benefit of Hanson, the effect being to entitle him to enter the land specified. It was there held that the note was founded upon a sufficient and not illegal consideration. Fully supporting the doctrine of these cases, as above stated, and directly in point, are the following: Lapham v. Head, 21 Kan. 332; Bell v. Parks, 18 Kan. 152; Fesler v. Haas, 19 Kan. 216; and applying the doctrine of these, cases to the case at bar they would seem to be conclusive of the validity of the contract set up in the answer of the plaintiff in error, as showing the agreement therein stated to constitute a good and valid consideration for the assignment of the money deposited by Wogo-man to Benson. As the facts were stated in the amended answer, Benson was contesting the entry of Owens. A successful contest entitled' him to a preference right of entry of said land, which right he was to surrender when the same should be confirmed, and by such surrender permit Wogoman to make entry and acquire the rights which he, Benson, had surrendered. This, we think, he might lawfully do, and that such surrender upon the authority of the cases cited, supra, would constitute a good and valid consideration for the assignment made. But the case at bar is much stronger to establish the right of plaintiff in error to pay over the money in question to Benson, and to be exempt from liability therefor, either to Wogoman or to any subsequent assignee than the cases heretofore cited; for if the allegations in this amended answer be true, and they must, under the demurrer filed, be taken as true, then there was an independent consideration for the assignment from — 596 — Wogoman to Benson. Benson had made improvements, or was the owner of improvements, on the land in question consisting of a house, fences and valuable improvements made upon the land by plowing and breaking the sod on a portion thereof. -These, the answer alleges, were sold and conveyed to Wogoman as a part of the consideration for said-$1000. And it matters not whether Benson was in the actual and undisputed possession of said property or could deliver the possession thereof to said Wogoman, the right to such possession was a valid consideration. The parties knew precisely what they were doing. There could have been no mistake or misunderstanding as to the extent of Benson’s interest either in the land or the personal property thereon situated. If there was any consideration of value there can be no inquiry now into its sufficiency-Parties place their own value on -their purchases, and unless their bargain is rescinded, they must pay what they agree to pay. . (Kennedy v. Shaw, 5 N. W. 396; Dell v. Parks, 18 Kan. 162; Lapham v. Head, 21 Kan. 332.) There is no law that we know of which prohibits the sale of improvements on public lands of the United States, and there is no reason why they may not be proper subjects for sale and serve as actual value and valuable.consideration for contracts. (Caldwell v. Ruddy, Sup. Ct. of Idaho, 1 Pac. Rep. 339; O’Hanlon v. Denver, 22 Pac. Rep. 407; Paxton Cattle Co. v. First National Bank of Arrapahoe, 33 N. W. 271.) “A valuable consideration in the sense of the law, may consist either in some right, interest, profit or benefit accruing to one party or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.” (Addison on Contracts, vol. p. 31.) — 597 — The only authorities to which we have been referred, in support of the contention of the defendant in error, are: Dameron v. Dingee, Sup. Ct. Colo., 29 Pac. 305; Bennette v. Collins, 1 L. D. 69; Welch v. Duncan, 7 L. D. 186; Tillingham v. Vanhouten, 15 L.D. 394; but none of these cases are applicable ■ to the question involved here. Those cases only hold, and hold correctly, that the preference right of a successful contestant is personal and cannot be transferred to another; that such preference right or any right of entry or other inchoate right to acquire title to public land, cannot be sold or transferred from one party to another. No such question is involved in this case. It is not pretended that Benson undertook to transfer his preference right to Wogoman-He contracted to surrender such right to the government so that Wogoman might acquire the same right for himself. This-answer alleges that he not only surrendered that right but that in pursuance of the agreement,- Wogoman made entry upon the land, went into possession, of said land, the personal property and improvements transferred to him by Benson, and at the time this cause was tried was in the peaceable and uncontroverted possession of everything he contracted to attain, and was enjoying" every right which Benson contracted that he might acquire; but counsel for defendant in error contends that before the preference right of said Benson had been con’ firmed by the general land office, and before he surrendered such right, and before Wogoman entered into the undisputed enjoyment and possession of the lands and personal property, Wogoman, by the asssignment of said moneys, so deposited in the plaintiff in error’s bank, to Maddox, the defendant in error had rescinded the contract between himself and Benson. This he could not — 598 — do, if it was a valid contract when made. It did not need to be an executed contract. An executory contract, if valid when made, is a good consideration for a promise. The agreement between Wogomau'and Benson was not void, as being against public policy. It contravened no law or policy of the government. It is not claimed that fraud entered into it or that it violated any rule of morals. What is meant by rescissions of a contract? Bishop defines it as “the avoiding of a voidable contract.” (Bishop on Contracts, § 679.) But even where a contract is voidable and is sought to be rescinded by one of the parties thereto, equity and good conscience requires that he shall place the other in statu quo. He will not be permitted to repudiate a contract and retain the benefits derived thereunder. The statutes of this Territory, particularly, specify the cases and conditions under which parties to a contract may rescind the same; and this case falls under none of the classes therein specified. (Statutes of Oklahoma, 1893, §§ 866,and 868.) Prom the foregoing it is our conclusion that the court below erred in sustaining the demurrer to the amended and supplemental answer of plaintiff in error to the petition of defendant in. error in this cause; that said amended and supplemental answer presented a good and sufficient defense to the action of defendant in error and said demurrer should have been overruled. For the reasons stated, the action of the court below sustaining said demurrer and in entering judgment upon the pleadings in favor of the defendant in error against the plaintiff in error is reversed, and this cause is remanded to the court below with instructions to overrule said demurrer and grant a new trial. — 599 — Scott, J., having presided in the court below, not sitting; all the other Justices concurring.