Court Opinion

ID: 3509920
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:20:34.226937+00
Date Added: 2024-06-11T13:05:45.395120
License: Public Domain

Defendant's petition for rehearing is largely devoted to an attack upon that part of our opinion having to do with the much discussed release. (Subd. 4.) Boiled down, defendant's claim is:
"There must be found to exist a mutual mistake, not a mutual mistake as between one of the parties to the instrument and a stranger to it not within the jurisdiction of the court, but a mutual mistake between the parties to that instrument, who are brought into court for the determination of that very issue."
The fact issue presented by the pleadings on this phase was raised by defendant in its answer, wherein, having "denied all liability," it as new matter alleged that "in compromise and settlement" of plaintiff's claim it had paid on a given date to "the plaintiff a sum of money, and the plaintiff in consideration thereof compromised and settled all claims against the defendant arising from said accident, both past and future, and released and discharged the defendant therefrom." In her reply plaintiff pleaded avoidance based on fraud and mutual mistake. No suggestion was made in the pleadings or otherwise that Taylor was a necessary party to the litigation. Defendant throughout relied upon the validity of the release. Mr. Taylor testified in support of it and fully covered everything that took place at the time of its signing and delivery and of the payment of the $100 check to plaintiff. Immediately before the case was submitted to the jury, on defendant's motion for direction of verdict and as one of the grounds for demanding such, its claim was that "it appears as a matter of law that on or about August 18, 1930, for valuable consideration, the plaintiff released and discharged the defendant from all liability and compromised and settled all claims arising from the accident." Not until it made its motion, here for review on the court's order denying it, was any suggestion made that because of Taylor's absence from the case as a party the involved instrument was invulnerable. In the mentioned motion defendant assigned as a reason for judgment notwithstanding *Page 183 
that it appeared "as a matter of law that plaintiff has released one C.H. Taylor as a joint tortfeasor from all liability for damages claimed or sustained in the premises."
9. Under our practice, if there be defect of parties, whether plaintiff or defendant, and if such defect appears on the face of the complaint, it is necessary that suitable objection be taken thereto by demurrer. On the other hand, if the defect does not appear on the face of the complaint, the objection may be taken by answer. If no such objection is taken advantage of either by demurrer or answer, defendant is deemed to have waived the same. He cannot later raise the objection by motion for dismissal, for judgment on the pleadings, for direction of verdict, or by objection to the evidence. This rule applies whether the cause be founded ex contractu or ex delicto. 5 Dunnell, Minn. Dig. (2 ed.  Supps. 1932, 1934, 1937) §§ 7323, 7508. Here no such preliminary steps were taken. The case was tried on its merits and disposed of upon the issues presented by the pleadings.
10. "Who shall be made parties in equity is a question of convenience and discretion, rather than of absolute right, to be determined according to the exigencies of the particular case. There is an important distinction as respects parties defendant between those who are necessary and those who are merely proper. Necessary parties are those without whom no decree at all can be effectively made determining the principal issues in the cause. Proper parties are those without whom a substantial decree may be made, but not a decree which shall completely settle all the questions which may be involved in the controversy and conclude the rights of all the persons who have any interest in the subject-matter of the litigation." 5 Dunnell, Minn. Dig. (2 ed.  Supps. 1932, 1934, 1937) § 7316.
11. Defendant's theory apparently is that in any litigation involving rescission all parties to the agreement are necessary parties to the suit; hence when the release was received in evidence plaintiff's cause failed on account of Taylor's absence as a party to the cause; *Page 184 
that the release being voidable only and not void, rescission was the only means whereby plaintiff might avoid its consequences.
Decision must be governed by the rule of our own cases, which is to the effect that "if the rights of the parties can be easily and equitably adjusted in the action brought upon the original demand, a strict application of the rule requiring an offer to return the money received will not be enforced." Helvetia Copper Co. v. Hart-Parr Co. 142 Minn. 74, 78,171 N.W. 272, 274, 767; Marple v. Minneapolis  St. L. R. Co.115 Minn. 262, 132 N.W. 333, Ann. Cas. 1912d 1082. The theory is that substantial justice in the final disposition of the case is the real criterion to apply. This is done "where the money received on the settlement is deducted from the amount of the recovery." (115 Minn. 266.) That is exactly what occurred here. The court in its charge to the jury instructed them that "if you find in favor of the plaintiff you must deduct from the amount of your verdict the $100 paid by defendant to plaintiff at the time of the execution of said release, together with interest at six per cent from that date." Plaintiff in her reply offered that deduction, so the court's charge was in harmony with the theory upon which issues were made and the case tried. The applicable rule is succinctly stated in 5 Dunnell, Minn. Dig. (2 ed.  Supps. 1932, 1934, 1937) § 8374:
"A release procured by fraud may be canceled in an equitable action brought for that purpose. The fraud may also be shown in a legal action to defeat the effect of the release when interposed as a defence. In either case the evidence of fraud must be clear. A party is not bound to return or tender moneyreceived under a fraudulent release where the adverse partypleads the release as a defence." (Italics supplied.) The cases are cited under note 39.
12. Plaintiff could have proceeded against Taylor, Korenich, and defendant jointly. Mayberry v. N. P. Ry. Co. 100 Minn. 79,110 N.W. 356, 12 L.R.A.(N.S.) 675, 10 Ann. Cas. 754. (There is an interesting and exhaustive annotation bearing on this phase under annotation 98 A.L.R. 1057, et seq.) She could, as she did, sue the master only. That is done in most cases where liability exists by *Page 185 
reason of relationship of master and servant so that the doctrine of respondeat superior applies. As we have seen, the procedural steps are not now subject to attack because defendant did not make timely issue of defect of parties defendant. Had it done so it would have been required to distinctly raise and specifically show wherein the defect consisted, naming the person or persons who should have been joined. 5 Dunnell, Minn. Dig. (2 ed.) § 7324. It might on its own motion under the statute have brought in Taylor as an additional party. 2 Mason Minn. St. 1927, § 9181; 5 Dunnell, Minn. Dig. (2 ed.  Supps. 1932, 1934, 1937) § 7328. If it deemed him a necessary party it was its duty to raise that question seasonably to the end that he be brought into the case and then have the trial proceed after all such parties were before the court. Thus it has been held that where a person is named as a party defendant in the title of the action but no service has been made upon him and it is found that he is a necessary party, the proper practice is to continue the action or delay the trial until he may be brought in. In an equity suit the court may on its own motion at the trial or otherwise continue or dismiss the suit for want of a necessary defendant. Or the court may continue the suit until such party is brought in. 5 Dunnell, Minn. Dig. (2 ed.) § 7325. Independent of the statute, the court has inherent power to bring before it persons who are not named parties "whenever, for the complete administration of justice," this is deemed necessary. 5 Dunnell, Minn. Dig. (2 ed.  Supps. 1932, 1934, 1937) § 7329, and cases cited under notes.
13. Defendant did none of these things. It risked its defense upon what turned out to be an infirm crutch. It is not in position to complain. This case is similar in principle to Lavelle v. Anderson, 197 Minn. 169, 171, 266 N.W. 445, 446. In that case the verdict established "that the driver of plaintiff's car [his son] was not a joint tortfeasor [with defendants] in the matter. So no release of defendants can be claimed on that ground." The son was not a party to the cause. There, as here, defendants sought to escape liability because of a claimed release of one joint tortfeasor. The defense failed for the reason quoted. Here it failed because the jury *Page 186 
found, upon adequate evidence, that the alleged release was not at all what it purported to be but on the contrary was a mere scrap of paper without binding force. The absence of Taylor as a party was wholly immaterial. The validity of the release itself was then the only issue, and not at all the presence or absence of one of the parties in whose favor it was purportedly executed. If the release had run to Taylor alone, defendant would have had the same right as it here sought, i. e., to plead and prove its existence as a valid release. If such it had been found to be, clearly plaintiff's cause would have been lost. Because it failed to withstand the test of validity, defendant's proof, thought to be sufficient to support its defense, fell flat. Its infirmity was the cause of its fall, not the presence or absence of Mr. Taylor as a party. Here, as in Smith v. Mann, 184 Minn. 485, 488, 239 N.W. 223, 224, if plaintiff's general release had been found good it would have "operated not only in personam on the releasees and their liability, but also in rem on the releasor's cause of action. * * * The destruction of it [the cause] is the primary result from which follows necessarily the secondary one of releasing all the wrongdoers, whether their wrongs were concurrent or successive."
The petition for reargument is denied.
MR. JUSTICE STONE, because of illness, took no part in the consideration or decision of this case. *Page 187