Finley v. Smith

ON MOTIONS TO MODIFY, FOR A REHEARING AND TO TRANSFER TO BANC. Respondent, Finley, has filed motions to modify, for a rehearing, and to transfer to Banc. The issues presented overlap; for instance, the motion to modify presents issues (also found in the motion for rehearing) which would necessitate a rehearing if sustained, and the motion for rehearing presents issues (also found in the motion to modify) which would require only a modification of the opinion if sustained. We shall consider only the matters deemed essential.

We overrule, without discussion, the motion to modify, remarking that statements arguendo in opinions are not holdings (State ex rel. Appel v. Hughes, 351 Mo. 488, 173 S.W.2d 45, 49 [3]), and that the holding involved was in movant's favor.

[6] We have given the several issues presented in the different motions consideration. The decree was sustained insofar as it operated directly in Finley's favor and against Smith. Of this, Finley is in no position to complain. His complaints run against remanding the cause with directions to modify the decree so as not to affect any right of Smith to prosecute an action against Finley's cocovenantees. It is not to be overlooked that Finley's bill was primarily to have the covenant declared valid [331] and incidentally for injunctive relief as to him. Underlying this position as well as the complaints now presented is Finley's contention that by virtue of the provisions of our Declaratory Judgment act (Secs. 1126-1140, R.S. 1939) he was entitled in any event to a declaration of rights under the covenant not to sue. We have in a number of cases indicated that the Declaratory Judgment act did not supplant coercive actions theretofore available. Liberty Mut. Ins. Co. v. Jones (Banc), 344 Mo. 932, 954[1], 130 S.W.2d 945, 953[1], 125 A.L.R. 1149. Section 1131, R.S. 1939, explicitly provides: "The court may refuse to render or enter a declaratory judgment or decree where such judgment or decree, if rendered or entered, would not terminate the uncertainty or controversy giving rise to the proceeding." Section 1126, Ibid., provides that courts "shall have power to declare rights" et cetera. These provisions do not compel action. In the instant proceeding a denial of the prayer of Finley's bill would not have terminated "the uncertainty or controversy giving rise to the proceeding." His contention that he was entitled in all events to a declaration under the covenant not to sue begs the issue, is too broad and is not in conformity with observations in adjudicated cases. State ex rel. United States Fire Ins. Co. v. Terte, 351 Mo. 1089, 176 S.W.2d 25, is a recent opinion by Banc. The United States Fire Insurance Company instituted a declaratory judgment suit in Jackson county with respect to its liability under a fire insurance policy issued to Eva F. Hunt. About two weeks thereafter defendant Hunt instituted a suit on the same policy in Caldwell county and by subsequent proceedings succeeded in having the Jackson county circuit court stay the delaratory proceedings until her action in Caldwell county had been disposed of. Thereupon, the United States Fire Insurance Company, as relator, instituted the above entitled mandamus proceeding to compel respondent circuit judge to take jurisdiction of and to proceed with the Declaratory judgment suit. In discussing the question of the scope of the discretion to be exercised by courts in the administration of the Declaratory Judgment act where there is another state action pending or closely in prospect, court en banc held, notwithstanding ordinarily the second action in point of filing and service of process would be subject to abatement, that Judge Terte had the discretionary power to stay the declaratory judgment suit of the insurer pending the determination of the coercive action subsequently instituted on the same policy by the insured. The court quoted Borchard, Declaratory Judgments (2d Ed.), p. 303: "`Where a party's action is about to begin or has begun, it serves no sensible end to permit his adversary to appear as an equitable actor and start the proceedings for an autonomous declaration that he has a good defense to his opponent's pending or imminent action. But where the facts do not show such imminence of suit, or where there is a practical ground for permitting a party . . . to claim and obtain exoneration from a judicial proceeding, there is no reason why the courts should not take cognizance' of a declaratory action covering the same issues." Finley's bill explicitly alleged the pendency of an action by Smith against Finley's cocovenantees and also the impending threat of an action by Smith against Finley. The circuit court of Saline county would have been justified in staying the declaratory proceedings before it, especially upon the showing that Finley had also been made a defendant in Smith's Jackson county action. The circuit court of Saline county overstepped sound discretion when it undertook to usurp jurisdiction theretofore vested in the court of co-ordinate jurisdiction of Jackson county over the subject matter with respect to certain of the parties involved. After the institution of an action for personal injuries and the service of process in a forum fully vested with jurisdiction, the named defendants, nor some third person coincidentally liable, if so, with said defendants, ordinarily should not be permitted to thwart plaintiff's right to a trial by a jury in the forum of his choice and force plaintiff to an adjudication of his rights in a court of equity or to seek relief (perhaps only partial and considered of no practical benefit by plaintiff) before a jury in a different co-ordinate forum. The holding promotes comity and eliminates conflicts between courts of co-ordinate jurisdiction. Finley's argument that because he instituted the Saline county declaratory suit prior to Smith joining him as a party-defendant in the Jackson county coercive action the Saline county circuit court had priority of jurisdiction over Smith and the subject matter refutes the Saline county circuit court's authority to interfere with the subject-matter and parties theretofore subject to the jurisdiction of the Jackson county circuit court. We think plaintiff is entitled to assert whatever [332] rights he may have to try his Jackson county action insofar as said court first obtained jurisdiction of the subject matter and parties. Milwaukee Gas Specialty Co. v. Mercoid Corp., 104 F.2d 589, 592[6, 7], and cases; Page v. Story, 280 Mich. 43, 273 N.W. 387; Continental Cas. Co. v. National Household Distributors, Inc.,32 F. Supp. 849, 851[3]; Jefferson County ex rel. v. Chilton,236 Ky. 614, 33 S.W.2d 601, 603 [4, 5, 14.]

The issues presented by Smith's appeal were defensive and embraced the declaration of the validity of the covenant not to sue and ancillary thereto an injunction staying the alleged threatened breach of the covenant against Finley by Smith. No affirmative declaration in Smith's favor was or is involved. The issues are restricted to the covenant. Matters, mentioned in respondent's motions, occurring subsequent to the execution of the covenant and possibly going to defeat Smith's right to maintain his Jackson county action have naught to do with Finley's right under the judgment being reviewed to have the covenant declared valid, are not here involved and may be, if thought proper, presented in due course in Smith's pending action in Jackson county.

The motion to modify is overruled. The motion for a rehearing is overruled. The motion to transfer to Banc is overruled.