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Ingalls v. Neidlinger

Supreme Court of Arizona

March 27, 1950

INGALLS et al.

Judgment reversed with directions.

Evans, Hull, Kitchel & Jenckes, Jos. S. Jenckes, Jr., of Phoenix, attorneys for appellants.

Emmett R. Feighner, of Phoenix, attorney for appellee.

Udall, Justice. La Prade, C. J., and Stanford, Phelps and De Concini, JJ., concur.


Udall, Justice.

Page 388

[70 Ariz. 42] The questions raised by this appeal are directed to the correctness of the trial court's rulings on matters of pleading, i. e., the striking of parts of defendants' answers and cross complaints, which rulings are entwined with the primary problem of the correctness of granting plaintiff's motion for summary judgment against both defendants.

This action was instituted by Earl W. Neidlinger, as plaintiff (appellee) against A. G. Ingalls and E. A. Moore, defendants (appellants). Since the institution of this appeal, E. A. Moore has died and upon stipulation and by order of court Clara E. Moore, the administratrix of his estate, has been substituted as party appellant. While the defendants in the lower court appeared by the same counsel, they answered separately. However, their pleadings throughout are so nearly identical that we shall, in the interest of brevity, treat them as being the same. The purpose of the suit was to recover the sum of $ 3259, with interest and attorney's fees, alleged to be due under the terms of a certain written contract entered into between the parties on February 6, 1947.

The contract provided for the sale and assignment from plaintiff to defendants of 96 shares of the capital stock of Fabricantes Madereros Della Rocca, S. A., a corporation, (hereinafter referred to as the Mexican Lumber Company) and the payment therefor by the buyers to the seller of the sum of $ 6,059.00 in installments of $ 700.00 per month, commencing May 1, 1947. Paragraph "3" of the contract reads as follows: "3. That the party of the first part (appellee) hereby agrees that he will not institute any legal proceedings and that he will not instigate any other person, either directly or indirectly, to file any action of a legal nature against either or both parties of the second part (appellants), particularly as to any action in regard to the International Life Insurance Company. The party of the first part further agrees that in the event he violates the aforesaid provision by instituting such proceedings or instigating others to institute such proceedings following the date hereof, then the parties of the second part shall be relieved of their obligations to complete the payment of such balance as may then be owing, and in such event the parties of the second part shall return to the party of the first part that portion of the stock which is unpaid for at such time. Said stock so to be returned shall be valued on the same basis as purchased."

The defendants by their original answer admitted execution of the contract, but alleged that the same was obtained under the duress of threatened criminal prosecution. This defense was stricken upon plaintiff's [70 Ariz. 43] motion. Counter-claims were also filed to recover back the $ 1400.00 that each defendant had paid under said contract, defendants alleging that said payments were obtained by duress, intimidation and undue influence as a result of plaintiff's threats to have criminal proceedings instituted against said defendants. Plaintiff's motions to strike (or to dismiss) the counter-claims were granted by the lower court. An amended answer was then filed which alleged in effect that the contract sued upon was void as against public policy and good morals because it involved an agreement not to prosecute a crime. A motion to strike this defense was also granted. The defendant Ingalls also filed a motion to dismiss the plaintiff's complaint on the ground that it failed to state a claim upon which relief could be granted. This motion was denied.

Plaintiff then filed motions for summary judgment against both defendants for the relief demanded in his complaint, (except with respect to the amount of attorney's fees) and in support of such motions, filed affidavits of himself and four other parties. These affidavits are generally to the effect

Page 389

that the parties to this suit were officers and members of the board of directors of International Life Insurance Company of Phoenix; that this company was in financial difficulties due to depleted surplus and reserves; that numerous conferences were held between plaintiff, defendants and others to try and find a way out of their difficulties; that the parties were in disagreement as to the manner in which the affairs of the International Life Insurance Co. had been managed as well as to the wisdom of reinsuring the business of said company with a Texas Company; that there was also differences between them with respect to defendants' activities and affairs in the Mexican Lumber Company in which stock had been sold by defendants to plaintiff. Finally the affidavits recite that to settle their differences the contract of February 6, 1947, was entered into. It is specifically stated in these affidavits that at no time did plaintiff threaten to institute criminal proceedings against defendants or accuse them ...

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