Lerdall v. Charter Oak Life Insurance

Oassoday, J.

The counsel for the appellant insists that the answer sets up a good defense, or at least so far colorable as to require investigation, and therefore should not have been stricken out as frivolous, within the rule laid down by this court in Cottrill v. Cramer, 40 Wis., 555 , and Tolman v. Hanrahan, 44 Wis., 133 . The answer is voluminous, and it does require some investigation to understand the facts; but, when ascertained, it at once becomes obvious that it tenders no defense to the policy, nor any denial of the amount due thereon. In fact, it consists wholly of a counterclaim or cross action to restrain the plaintiff from taking judgment for any larger amount than certain other' policy-holders have consented to accept. It is an. attempt to force consent from the plaintiff to the alleged scheme of scaling. The reasons for this are stated at length, and consist of the troubles and financial embarrassments of the company, the commencement and withdrawal of proceedings to wind up its affairs, the change in the law governing it, its reorganization, its new management and new scheme for adjusting and settling its liabilities, and finally the granting of a preliminary injunction in an action pending in *429 a court of Connecticut. Whether such cross action could be maintained if the plaintiff had seized the property of the company, and was attempting to enforce collection out of such property or assets of the company, might possibly be a more serious question. But here the plaintiff is simply seeking a judgment for the amount due on the policy. The contract upon which he sues is confessedly legal and binding. The company, the other party to the contract, has not been discharged therefrom in whole nor in part by any court or officer of Connecticut, or any other state, much less by any bankrupt court. Upon what theory, then, can it reasonably be insisted that the plaintiff shall not be allowed to put his claim into judgment?

It has often been held that part payment of a debt is no consideration for an agreement not to enforce collection of the balance. Harriman v. Harriman, 12 Gray, 341 ; Curran v. Rummell, 118 Mass., 482 ; Ryan v. Ward, 48 N. Y., 204 . But here it is claimed, in effect, that the insolvency of the company, and the agreement of some policy-holders to scale down, the amount of their policies, is a good ground for compelling the plaintiff to scale 'down his. It is only necessary that the claim alleged in the answer should be stated in simple language, to render its frivolousness apparent. The question here presented does not involve the power of the state legislature to prescribe laws authorizing courts to discharge its own corporations or citizens, wholly or to a limited extent, from liabilities to foreign creditors; for no such discharge is here alleged. This is not a controversy between a trustee -of the assets of the defendant company and the plaintiff as to the right to seize such trust estate. Eor the purpose of this, case, it may be conceded that the legislature of Connecticut had full power over the charter of this company, and could alter, amend or repeal the same, and provide for winding up the corporation; and that foreign as well as domestic policyholders were bound to submit to the proceedings for that pur *430 pose regularly had. Hence the* authorities cited by counsel seem to be wholly inapplicable to the question here involved. No reason seems to be given why the plaintiff is not entitled to judgment in this action, even if he should be unable to enforce collection of the whole, or be compelled to accept of a pro rata share of the assets of the company. Even if the bankrupt law were still in force, and the company were in bankruptcy, yet we apprehend that an answer of such bankrupt company, setting up such bankruptcy proceedings, would be no ground for enjoining a creditor of the bankrupt from obtaining judgment, so long as there was no attempt to interfere with the bankrupt estate. The reason for refusing to restrain the plaintiff here is much stronger. Nor can we say that this answer comes within that somewhat vague and shadowy class of pleadings which have been held bad on demurrer, and yet too good and intricate to be declared frivolous.

A frivolous pleading under the code was early defined by this court as follows: “It is a pleading interposed for delay, and its frivolous character indicates bad faith in the pleading. Hence the severity of the judgment on striking it off. The party who'thus trifles with the administration of justice, and the necessary forms by which it is administered, forfeits all claims to the favor of the court. He is not entitled to amend or to plead over, as in case of error in pleading.” Farmers & Millers’ Bank v. Sawyer, 7 Wis., 383 . The subsequent change of the statute — taking away the'penalty for the apparent bad faith in the pleader, and securing to him the same favor with the court as one putting in a pleading in good faith, would seem to call for a more stringent'rule in the examination of the alleged frivolous pleading than existed prior to such amendment. Under the statute, since the amendment, the party interposing the frivolous pleading is allowed, in the discretion of the court, to plead over, the same as in case of failure on demurrer. Section 2681, R. S. It would seem that a pleading entitled to' such favor ought to be construed to include *431 something more than what would, otherwise he regarded as a • .mere trifling with the court. The distinction, however, had not apparently been presented to this court, nor considered, until the recent case of Diggle v. Boulden, 48 Wis., 477 , in which Orton, J., said: “ Since, by the present statute, in case of striking out a demurrer as frivolous, the court may allow the defendant to plead over within a limited time, on terms, when such an order is made, there can be no substantial distinction between striking out a demurrer as frivolous, -and overruling it on argument; for the legal consequences are the same.” Page 482. The logic of this statement is irresistible. "Whether a pleading is manifestly untenable upon a bare inspection of the same, without argument or research, depends altogether upon the learning, experience and discrimination of the person who so inspects. To one mind the pleading may be clearly frivolous upon mere inspection, without argument or research, and yet to another, less learned upon the particular branch of the law involved, but more learned, perhaps, upon other branches, it might require both argument and research to come to the same conclusion. This distinction has no application to the case we are considering, for the answer here is clearly frivolous; but we have referred to the change in the statute because the court are of the opinion that in future a more stringent rule should be adopted as to frivolous pleadings.

By the Court.— The order of the circuit court is affirmed.