Outboard Marine Corp. v. Futrell

Bobbitt, J. Appellants assign as error the portion of the court’s judgment (paragraph “(3)”) sustaining plaintiff’s “demurrer and motion to strike” as to paragraph 3 of appellants’ further answer. Whether the court erred in overruling appellants’ demurrer to the amended complaint is not presented. It is noted that plaintiff excepted to the portion of the court’s judgment (paragraph “(2)”) overruling plaintiff’s “demurrer and motion to strike” as to paragraph 2 of appellants’ further answer. Plaintiff did not give notice of appeal. It would seem the parties were advertent to our Rule 4(a). Upon this record, the parties discuss questions considered in the Annotation, “Guaranty as covering renewals, after revocation, of claims within coverage at time of revocation,” 100 A.L.R. 1236. There is a division of authority. Cases generally favorable to appellants include: Hughes v. Straus-Frank Co., 127 S.W. 2d 582 (Tex.); Straus-Frank Co. v. Hughes, 156 S.W. 2d 519 (Tex.); Merchants’ Nat. Bank v. Cressey, 146 N.W. 761 (Iowa); Bedford v. Kelley, 139 N.W. 250 (Mich.); National Eagle Bank v. Hunt, 13 A. 115 (R.I.); Gay v. Ward, 34 A. 1025 (Conn.); Home Nat. Bank v. Waterman’s Estate, 29 N.E. 503 (Ill.). Cases generally favorable to appellee include: Corn Exchange Bank Trust Co. v. Gifford, 197 N.E. 178 (N.Y.), 100 A.L.R. 1233; Exchange Nat. Bank v. Hunt, 135 P. 224 (Wash.); Wise v. Miller, 14 N.E. 218 (Ohio). The facts alleged in the further answer do not provide a sufficient basis for application or discussion of the broad questions discussed in the briefs. Decision must relate to a definite factual situation. Such definite factual situation is not before us on this appeal. Appellants, in paragraph 1 of their further answer, simply assert they are not indebted to plaintiff in any amount whatsoever. This general denial of plaintiff’s claim is surplusage and is not germane to the further defense. In our view, it was error to consider appellants’ pleading as asserting two separate and distinct defenses. Paragraphs 2 and 3 must be considered together as a single affirmative defense. Nothing in paragraph 3 suggests any material change in the contractual relations between plaintiff and Biscoe Distributing Company other than that alleged in paragraph 2, namely, the alleged acceptance by plaintiff of the nine promissory notes “in full settlement of the indebtedness of the Biscoe Distributing Company, a partnership, which was due at the time of the execution of said notes.” Paragraph 3 asserts this material change was “without the consent of B. S. Futrell.” It is noted that plaintiff demurred to the further answer on the ground it asserted “an affirmative defense,” asserting the allegations [200] of paragraphs 2 and 3 of the further answer failed to state “a valid defense.” . Plaintiff’s “demurrer and motion to strike” must be considered a demurrer to appellants’ further answer, namely, paragraphs 2 and 3 thereof, considered as one further defense. Hence, in construing the allegations of the further answer, appellants must be given the benefit of every reasonable intendment in their favor. When so considered, we are of opinion, and so decide, that the allegations of the further answer, particularly when considered in connection with the quoted portion of paragraph 3, are sufficient to withstand the demurrer. We are advertent to the fact that plaintiff has not been heard in this Court in respect of whether the court erred in overruling plaintiff’s “demurrer and motion to strike” as to paragraph 2 of the further answer. Even so, disposition of appellants’ appeal requires that the further answer be considered in its entirety. The questions debated on this appeal will be resolved in relation to the facts developed and established at trial. Plaintiff will not be prejudiced by this course. The result of the foregoing is that the portion of the court’s judgment (paragraph “(3)”) sustaining plaintiff’s “demurrer and motion to strike” as to paragraph 3 of appellants’ further answer is reversed. Whether the portion of the court’s judgment reversed by this decision materially prejudiced appellants is questionable. In any event, we deemed it appropriate to entertain the appeal on account of the confusion that might result from the fact that a demurrer to paragraph 3 of the further answer was sustained on the theory that it alleged a separate and independent affirmative defense. Under the circumstances, the costs on this appeal will be taxed one-half to appellants and one-half to appellee. Reversed. Moore, J., not sitting.