Case ID: kan_49/html/0233-01.html
Source: Caselaw Access Project
Author: {"author": "Strang, C.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Winfield Land & Trust Company v. S. E. Burger.
    1. Reply — Verification—Judgment on Pleadings. An allegation in a pleading of the non-existence of authority is not to be taken as true because the denial of the same is not verified.
    2. -Error. It is error, therefore, for the court to enter judgment on the pleadings because such denial is not verified.
    
      Error from Cowley • District Court.
    
    Action by the Winfield Land & Trust Company against Burger, to enforce payment of certain subscriptions. On a judgment for defendant, at the September term, 1889, the plaintiff brings error.
    
      Eaton, Pollock & Love, for plaintiff in error:
    The fifth ground of defense in the answer of defendant (to which is attached a copy of the charter of plaintiff as an exhibit) alleges that plaintiff had no authority to do the matters and things set forth in the two subscriptions declared upon, and the reply thereto is not verified. The trial court held that, under this condition of the pleadings, no issue was raised, and that, under § 108 of the code, to raise an issue the reply should have been verified. We submit this is error. The copy of the charter attached to the defendant’s answer is a true copy, and the plaintiff had no object in denying its correctness; and the allegations of want of power did not need any verified denial to raise an issue. It is not the allegations in a pleading denying authority that are taken as true without denial under oath, but the allegations of authority. This was decided by this court in the case of A. T. & S. F. Bid. Co. v. Wak, 40 Kas. 433, and is not a proposition longer open to controversy.
    Beach, in his work on Private Corporations, § 422, says: “ The plea of ultra vires should not prevail, whether interposed for or against a corporation, when it would not advance justice, but on the contrary would accomplish a legal wrong,” citing Whitney Arms Co. v. Barlow, 63 N. Y. 69.
    
      McDermott & Johnson, for defendant in error:
    The defendant, in the fifth defense of his answer, alleged affirmatively what the powers of the plaintiff were, and attached to his answer, as a part of the fifth defense, a copy of plaintiff’s charter. These allegations were affirmative allegations of authority, and the court was compelled to take them as true, because the reply of plaintiff denying the same was not verified. The charter of plaintiff, as set out in said fifth defense, and which plaintiff admits in its brief to be true, shows that the power of the plaintiff was confined to the purchase of land and the location and laying out of town-sites and additions, and the sale and conveyance of the same. In short, it was simply a town company and nothing else. If the allegations of the fifth defense are true, then this plaintiff had no power or authority to enter into the contracts of subscription, which are the basis of plaintiff’s claim in this action. Plaintiff cannot say that defendant is estopped from denying the power of the plaintiff to enter into such contract, because the issue of estoppel cannot be raised by plaintiff simply by filing an unverified denial of defendant’s plea of ultra vires, as contained in defendant’s fifth defense. The case of A. T. & S. F. Rid. Co. v. Walz, 40 Kas. 433, cited by plaintiff, has no application, because in this case defendant’s allegations are allegations of authority, and not want of authority. The want of authority is a conclusion of law, drawn from the affirmative allegations of authority. That is to say, defendant alleges what authority the plaintiff has as a corporation, and the plaintiff fails to deny (and in its brief admits) the truth of said allegations. The law then says that said corporation can have no other authority. Then its acts in entering into these contracts are ultra vires and void. The fifth defense then being admitted to be true by the plaintiff, the court could not do otherwise than to render judgment for the defendant, when asked to do so. The pleadings, taken as a whole, show conclusively that the defendant was not estopped from making the defense of ultra vires, but if he was estopped, the plaintiff could not take advantage of it without pleading it. Estoppel can only be interposed when pleaded, and cannot be proved under a general denial, and plaintiff cannot now complain that it was deprived of an opportunity of proving that defendant was estopped from setting up the defense of ultra vires, when he could not have proved such estoppel if the case had gone to trial.
   Opinion by

Strang, C.:

Action on a contract to enforce payment of certain subscriptions, which were in writing and attached to the petition in the ease. A demurrer was filed to the petition of the plaintiff, and sustained by the court. An amended petition was then filed and a general demurrer was interposed thereto. This demurrer was overruled. An answer was then filed stating some five different grounds of defense, the first of which was a general denial. The plaintiff replied to the second ground of defense; filed a motion requiring the defendant to separately state and number his defenses set up in his third count,''and a demurrer to the fourth and fifth grounds of defense. This motion and demurrer were both overruled. The defendant then filed his motion asking for a judgment on the pleadings, because there were no replies to the third, fourth and fifth grounds of defense. The plaintiff, however, with leave of court, replied thereto. Afterward, when said cause came on for a hearing, the defendant moved again for a judgment on the pleadings, which motion was sustained by the court. Motion for new trial was overruled, and the plaintiff brings the case here for review, assigning as grounds for reversing the judgment of the court below the rulings of the court on the demurrers to the fourth and fifth grounds of defense set up in the answer of the defendant, and also the action of the court in rendering judgment for the defendant on the pleadings.

The first question discussed by the plaintiff in its brief relates to the action of the court in entering judgment in favor of the defendant on the pleadings. The defendant, in the fifth count of his answer, alleges that the plaintiff had no-authority to carry out the stipulations of the two subscriptions sued on, and, as a part of said count, attached a copy of the charter under which the plaintiff had its existence. The reply to this count was not verified, and the court held that, as a want of authority was alleged and not denied under-oath, such want of authority must be taken as true, and therefore the plaintiff’s action must fail.

In this action of the court it seems to have confounded the-allegation of a want of authority with an allegation of authority, and applied the statutory rule with respect to the latter allegation to the former. The statute provides that an-allegation of authority in a pleading must be taken as true unless denied under oath; but we do not understand that any such rule prevails in respect to an allegation of a want of authority. Indeed, this court held, in Railroad Co. v. Walz, 40 Kas. 433, that an allegation of the non-existence of authority is not to be taken as true because the denial of the same is not verified. It follows that the court erred in rendering judgment for the defendant on the pleadings. This error necessitates a reversal of the judgment, and we will not consider a further question in the case.

It is recommended that the judgment of the district court be reversed, and remanded for new trial.

By the Court: It is so ordered.

All the Justices concurring.