California Steam Navigation Co. v. Wright

California Supreme Court Jul 1, 1857Published

Before: Burnett, Field, Opinión, Terry

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Holding. The court held that the defendant failed to properly plead the plaintiff's lack of legal capacity to sue, that the defendant remained liable under the contract despite selling his interest in the vessel, and that the defendant could not claim fraud to avoid the penalty while retaining the consideration paid for the agreement.

Issues

Whether the defendant properly raised the issue of the plaintiff's legal capacity to sue in his answer.
Whether the defendant's sale of his interest in a vessel absolved him of liability under a restrictive covenant.
Whether the defendant could assert fraud as a defense to the contract while retaining the consideration received.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The want of legal capacity to sue is a personal disability; and if the defendant intends to set up such a defence, he should state so distinctly.”

“The language of the agreement is too specific, definite, and certain, to be mistaken.”

“To say that Wright could keep all the money, upon the ground of fraud, and then resist the payment of the penalty upon the same ground, would be clearly unjust and illogical.”

Synopsis

The want of capacity in a plaintiff to sue should be specifically set up in the answer. The general issue is not sufficient.

Where the defendant being the owner, in whole or in part, of certain steamers, in con- . sideration of a sum of money paid to him, covenanted that he would not run, or suffer 1 to be run, or employed, those steamers on certain waters of the State : Held, that he j was not released from his covenant by a sale of the steamers, or of his interest | therein.

A voluntary promise by the holder of defendant’s agreement, that he would not assign it, was not binding; and where the contract was in fact made for the benefit of a company in which the obligee held stock, with knowledge of that fact on the part of the defendant, such promise was in fraud of the company’s rights, and the defendant could not avail himself of it.

¡Nor if the fact is that defendant was kept in ignorance by the obligee of the contract, that he was acting for the company, can the defendant avail himself of the fact as a defence, no fraud being alleged, while he retains the consideration paid for his contract. He cannot retain the consideration on the ground of fraud, and resist the payment of the penalty of an infraction of his contract on the same ground.

Burnett, J., delivered the opinión of the Court—Terry, C. J., and Field, J., concurring. This was an action to recover a specified sum as stipulated damages.

The case was before this Court in July, one thousand eight [590]hundred and fifty-six, when the judgment of the Court below sustaining the demurrer to the complaint was reversed, and the cause remanded* for further proceedings. The defendant answered, and the plaintiff had judgment, from which the defendant appealed.

The first point made by the learned counsel of appellant is that the Court erred in admitting in evidence the plaintiff’s charter. They insist that a steamboat company cannot be incorporated under the act of one thousand eight hundred and fifty-three.

But we are not permitted to examine this question, as the answer did not properly put it in issue. The answer was a simple denial of the allegations of the complaint in general terms, except as to one point. Under the provision's of the fortieth, forty-fourth and forty-fifth sections of the Practice Act, the want of capacity in the plaintiff to sue, should have been specially set up in the answer. The general issue is not sufficient. 1 Mass., 1,159; 6 N. H., 527; 197; 7 Mon. Ky. R., 4&4.

The want of legal capacity to sue is a personal disability; and if the defendant intends to set up such a defence, he should state so distinctly. The general denial relates to the other facts alleged concerning the contract. The defence,' that the plaintiff has not legal capacity to sue, goes to the entire action, constituting a full separate defence, and should be separately stated.

The second point made by the defendant is “-that upon a fair and reasonable interpretation of the contract, when Wright ceased to have any interest in, or control over the Goliah, he was not responsible for her future employment.”

In the agreement, the defendant, Wright, stipulated that, he would not run, or suffer to be run, or employed, the said steamer West Point, or any other steamer in which he is now or may hereafter be interested.”

It appears, from the testimony, that defendant, at the time he ' made the covenant, owned one-third of the Goliah, but that he had parted with his interest to his two sons, before the steamer was put upon the Sacramento River. And his counsel insist that under the agreement, properly construed, “it was a,present] subsisting interest, or control, at the date of the alleged breach of the covenant, which was to determine his liability; and not an interest held before or after the act complained of.”

California Steam Navigation Co. v. Wright

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