Walter Houston Anderson.

Actions for declaratory judgments : a treatise on the pleading, practice, and trial of an action for a declaratory judgment, from its inception to its conclusion, with forms online

. (page 36 of 112)
Online LibraryWalter Houston AndersonActions for declaratory judgments : a treatise on the pleading, practice, and trial of an action for a declaratory judgment, from its inception to its conclusion, with forms → online text (page 36 of 112)
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widow of the employee who had
obtained a divorce in another
state* but the declaration was
denied.

61. See section 201, supra.

See also, Moore v. Louisville
Hydro-Electric Co., 226 Ky. 20.
10 S.W.2d 466.

62. Mo. — State ex rel. Kansas City
Bridge Co. v. Terte, Mo., 131



S.W.2d 587, 124 A.L.R. 1331.

63. Eng.— Thomas Borthwick and
Sons (Australasia), Ltd. v. Ryan,
(1932) N.Z. 225.

64. N.H. — Carbonneau v. Hoosier

Engineering Co., — N.H. , 7Z

A.2d 802, also holding that under
the New Hampshire statute that
the fact that it was admitted that
the applicant was entitled to
workmen's compensation and that
he had not signified his election
to retain his common law rights
instead of accepting compensation
and therefore there was justiciable
controversy between the parties,
and would require a dismissal of
the proceeding since the plaintiff
had six more days within which
to make such an election.



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§ 509



ACTIONS FOR DECLARATORY JUDGMENTS



Ch. 9



action involving the same occurrence, against another employee of
the insured, and it was determined that such duty existed.*'

In a proceeding by an insurance company for a declaration to
determine whether it was bound under the terms of the policy to
defend suits brought against the employer by two employees who
claimed to have been poisoned by using a dangerous substance in
the course of their employment, that the uncontradicted testimony
showed that one employee was not suffering from a condition at-
tributable to or arising out of her employment, did not relieve the
insurance company from the obligation to defend the employee's
suit against the employer.**

Also, as we have already seen in the next preceding section, it
may be determined whether or not a municipal fireman is entitled
to claim both workmen's compensation and a fireman's pension.*^

So, too, it has been held that in an action for declaratory re-
lief the question of whether or not a policy covering workmen's
compensation, and the employer's liability policy issued by the
plaintiff, an insurance company, covered a claim by an employee
for injuries alleged to have resulted from silicosis, the court was
justified upon the pleadings and issues made as a matter of dis-
cretion in dealing with the questions involved in such action.**

On the other hand, in a suit by an injured employee of a State
Highway Department seeking a declaratory judgment as to com-
pensation due him from the department and its insurance carrier,
where it was not insisted that the individual members of the high-
way commission had in their individual capacity committed any
wrong or tort as to the employee or breached any contract or duty



65. N.H. — Merchants Mut. Casualty
Co. V. Brown, 89 N.H. 363, 199
A. 568.

66. N.H. — Lumbermen's Mut. Cas.
Co. V. Rozan, 92 N.H. 328, 30
A.2d 474.

67. Neb.— City of Lincoln v. SteflFens-
meyer, 134 Neb. 613, 279 N.W.
272, 119 A.L.R. 914.

68. N.Y.— Globe Indemnity Co. v.
Sterling Stewart Corporation, 257
App.Div. 1027, 13 N.Y.S.2d 678,



reargument denied 257 App.Div.
1099, 14 N.Y.S.2d 1006, appeal
granted.

S.D.— Utah Idaho Sugar Co. v.
Temmey, 68 S.D. 623, 5 N.W.2d
486. It seems, however, that the
true rule is that while the right to
workmen's compensation cannot
be made the subject of a declara-
tion, yet a declaration may be
made as to the status thereunder.



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Ch. 9 AS ALTERNATIVE REMEDY § 511

owed to him, it was held the action* could not be maintained.'*

In an action by an employer for a declaration of status under
the Workmen's Compensation Act, the evidence failed to support
the contention that the commissioner of insurance and industrial
commissioner granted the employer unlimited exemption from the
insurance provision of the act. And where an employer, by failure
to insure under the Workmen's Compensation Act or secure the ex-
emption from the insurance provision thereof, elected to operate
outside of the act, a dismissal of the employer's action for a de-
claration to determine the status under the act did not prejudice the
employer's rights.'^®

§ 510. Distribution of Personal Injury Judgment Where Plain-
tiff has Collected Workmen's Compensation

It seems clear enough that in a case where a workman is injured
through the negligence of a third person, and claims and collects
workmen's compensation, and thereafter sues for damages and a
judgment is had for an amount in excess of the compensation paid,
the rights of the different parties in connection with reimburse-
ment of the employer or his insurance carrier for the compensa-
tion paid, knd as to proper distribution of the judgment in the
personal injury action, will be adjudicated in a declaratory judg-
ment action.'^*

§ 511. Right of Insurance Company to Have Physical Examina-
tion of Policyholder

Where the policy issued provides that the insurance company
should have the right and opportunity through its medical repre-
sentative to examine the person of the insured during the pendency
of a claim under the policy, and as often as the company may rea-
sonably require, it has been held that such right may be enforced



69. Ala. — Barlowe v. Employers Ins. 71. CaL — Pacific Indemnity Co. v.

Co. of Alabama, 237 Ala. 665, 188 California Electric Works, 29 Cal.

So. 896. App.2d 260, 84 P.2d 313, followed

79. S.D. — Utah Idaho Sugar Co. v. in Jacques v. Standard Oil Co. of

Temmey, 68 S.D. 623. 5 N.W.2d California, 29 Cal.App.2d 745, 84

486. P.2d 322.

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§ 512



ACTIONS FOR DECLARATORY JUDGMENTS



Ch. 9



in a declaratory action although the declaratory statute was not
mentioned in the decision^*

It is doubtful, however, if the right to a physical exaniination
could be adjudged or enforced in a declaratory action where such
physical examination was sought in a personal injury damage ac-
tion apart from any contractual relationship. The right to have
a physical examination of the plaintiff in an action where the plain-
tiff seeks recovery of damages for his personal injuries against the
defendant is recognized in most jurisdictions, even in the absence
of statute,^* but no reason appears why the right to such physical
examination could not be fully protected and enforced by proper
measures, by the court wherein such an action is pending, without
resort to an independent declaratory action 7*

§ 512. Legality of a Contract May be Declared

As an alternative remedy, a declaration of rights may be sought
and obtained, as to the legality of a contract instead of bringing a
suit for breach thereof or compensation provided for * therein.'^'



72. U.S. — Bowles v. Commercial Cas-
ualty Ins. Co., C.C.A.Va., 107 F.
2d 169, where the right of phys-
ical examination was granted in
an action for a declaratory ac-
tion seeking other relief, but the
examination became material in
case.

Iowa — Eller v. Guthrie, 226 Iowa
467, 284 N.W. 412.

73. Tenn. — Williams v. Chattanooga
Iron Works, 131 Tenn. 683, 176
S.W. 1031, Ann.Cas.l916B, 101.

18 C.J. 1112.

Anderson, An Automobile Acci-
dent Suit, § 451 et seq.

74. Anderson, An Automobile Acci-
dent Suit, § 451 et seq.

75. U.S.— U. S. V. Trans-Missouri
Freight Ass'n, Kan., 17 S.Ct. 540,
166 U.S. 290, 41 L.Ed. 1007.
Eng. — Ertel Bieber and Company
V. Rio Tinto Company, Limited
(1918) A.C. 260.

Bacchus Marsh Concentrated



Milk Company Limited v, Joseph
Nathan and Company Limited, 26
CL.R. 410.

S. J. & E. Fellows, Limited v.
Corker (1918) 1 Ch. 9.

William Hollins & Co., Limited
V. Paget (1917) 1 Ch. 187.

Seligman v. Eagle Insurance
Company (1917) 1 Ch. 519.

In re Condran (1917) 1 Ch. 639.

Honour v. Equitable Life Insur-
ance Society of the United States
(1900) 1 Ch. 852.

In re London County Commer-
cial Reinsurance Office, Limited
(1922) 2 Ch. 67.

Smith, Coney & Barrett v.
Becker, Grey & Co. (1916) 2 Ch.
86, 8 B.R.C. 432.

Tingley v. Muller (1917) 2 Ch.
144, 8 B.R.C. 681, 86 L.J.Ch. 625.
116 L.T.R. 482, 33 Times L.R.
369, 61 SoLJo. 478.

Thompson Brothers & Co. v.
Amis (1917) 2 Ch. 211.



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Ch. 9



AS ALTERNATIVE REMEDY



§ 512



As to whether or not a contract to ferret out unpaid taxes by cer-
tain persons agreeing to perform such service on a commission or
contingent basis, is in violation of statute, will be determined in a
declaratory action.'^* The contention that the duties thus con-
tracted for in seeking to discover property that has escaped tax-
ation invades the function of the office of tax assessor, is un-
availing.'^^



Lovesy v. Palmer (1916) 2 Ch.
233.

Brooke v. Price (1916) 2 Ch.
345.

Societe Maritime v. Venus
Steam Shipping Co., 9 Con.Cas.
289.

British Actors Film Company,
Limited v. Glover (1918) 1 K.B.
299.

Zinc Corporation, Limited v.
Hirsch (1916) 1 K.B. 541.

Hugh Stephenson & Sons, Lim-
ited V. Aktien-Gesellschaft fur
Cartonnagen-Industrie (1916) 1
K.B. 763.

Distington Hematite Iron Com-
pany, Limited v. Possehl & Co.

(1916) 1 K.B. 811.

Jager v. Tolme & Runge and
The London Produce Clearing
House, Limited (1916) 1 K.B. 939.

Metropolitan Water Board v.
Dick, Kerr and Company Limited

(1917) 2 K.B. 1, affirmed (1918)
A.C 119.

Marshall v. Glanvill (1917) 2
K.B. 87.

St. Enoch Shipping Company,
Limited v. Phosphate Mining
Company (1916) 2 K.B. 624.

Hulton V. Hulton (1916) 2 K.B.
642.

Orconera Iron Ore Company
Limited v. Fried Krupp Aktien-
Gesellschaft, 118 L.T.R. 237.

Nicholls V. Nicholls, 81 L.T.R.
N.S. 811.

Grainger v. Order of Canadian
Home Circles, 31 Ont.L. 461, 6
OntW.N. 489, 26 Ont.W.R. 373,



76.



77.



affirmed 33 Ont.L. 116, 21 D.L.R.
110.

Zinc Corporation (Limited) &
Romaine v. Skipwith, 31 T.L.R.
107.

CaL — Sunset Scavenger Corpora-
tion V. Oddou, 11 Cal.App.2d 92,
53 P.2d 188.

NJ. — Christiansen v. Local 680 of
Milk Drivers and Dairy Em-
ployees of New Jersey, 126 N.J.
Eq. 508, 10 A.2d 168. In the
above-cited case it was held that
where an employer repudiates an
agreement with a labor union, on
the ground that the agreement
was procured by fraud, the union
might sue for a declaration that
the contract was valid and bind-
ing.

N.Y. — Sainer v. Affiliated Dress
Manufacturers, 168 Misc. 319, 5
N.Y.S.2d 855.

N.C. — Carolina Power & Light
Co. V. Iseley, 203 N.C. 811, 167
S.E. 56.

N.D, — G. W. Jones Lumber Co.
V. City of Marmarth, 67 N.D. 309,
272 N.W. 190.

Pa. — Pennsylvania Power & Light
Co. V. Public Service Commission
of Pennsylvania, 112 Pa.Super.
500, 171 A. 412.

See Chapter 12 for discussion of
declarations with respect to con-
tracts.

Cal. — Skidmore v. Amador Coun-
ty, 7 Cal.2d 37, 59 P.2d 818.
Tex.— White v. McGill, 131 Tex.
231, 114 S.W.2d 860.
CaL — Skidmore v. Amador Coun-
ty, 7 Cal.2d 37, 59 P.2d 818.



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§ 513



ACTIONS FOR DECLARATORY JUDGMENTS



Ch. 9



§ 513. Fraudulent Conveyance Declared

In addition to any other existing remedy with respect to whether
or not a conveyance by a debtor is fraudulent, such matter may be
determined in a declaratory action."^* So where it appears that a
judgment debtor has conveyed property to his mother for a re-
cited consideration of love and affection, and with a provision that
it should revert to the judgment debtor on the death of the mother,
constitutes such a voluntary conveyance and is void as to a judg-
ment creditor, and this will be determined to be the effect in a
declaratory action."^*

§ 514. Validity and Construction of Releases and Covenants Not
to Sue

In addition to the remedy of interposing a covenant not to sue
as a defense, the covenantee may maintain a declaratory action for
a construction thereof. There is little doubt that both the legality
and proper construction of a covenant not to sue may be deter-
mined in such an action.*^



See section 512, supra.
See section 589, as to validity of
a contract.

78. N.Y.— Palm Holding Corporation
V. Elband, 253 App.Div. 781, 300
N.Y.S. 1196.

Tenn.— W. T. Raleigh Co. v. Gar-
land, 22 Tenn.App. 256, 120 S.W.
2d 1005.

79. Eng.— -Ex parte McCullum (1920)
1 K.B. 205, 122 L.T.R. 316. Dec-
laration lies to set aside an ante-
nuptial settlement made upon
bankrupt's wife shortly before
bankruptcy, and to have income
from property paid to trustees in
bankruptcy.

Tenn.— W. T. Raleigh Co. v. Gar-
land, 22 Tenn.App. 256, 120 S.W.
2d 1005.

Wis.— Eckhardt v. Judevine, 233
Wis. 171, 288 N.W. 757, where it
was held that a declaratory action
lies to set up a trust in property



as having been purchased with
proceeds arising from funds of a
fraudulent conveyance.
80. CaL — Sunset Scavenger Corpora-
tion V. Oddou, 11 Cal.App.2d 92,
53 P.2d 188.

See also, section 512, supra.

No reason appears why an ac-
tion for declaratory relief could
not also be brought and main-
tained by the party executing such
covenant not to sue, for same pur-
poses and on the same ground
that the covenantee may do so.
N.H.— Webster v. Hurley, 92 N.
H. 431, 32 A.2d 684, holding that
the validity of a covenant not to
sue could not be litigated in an
action at law.

N.Y.— Bank of New York &
Trust Co. V. Snedeker, 173 Misc.
126, 16 N.Y.S.2d 930, affirmed 257
App.Div. 939, 13 N.Y.S.2d 278.



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Ch. 9 AS ALTERNATIVE REMEDY $ 514

A railroad switchman executed a release on compromise for
personal injuries received at work that was within the purview of
the Federal Employer's Liability Act, and therefore the cause of
action arose under a federal statute does not militate against the
right of the railroad to present to a state court an action for a
declaratory judgment as to its rights and liabilities under the re-
lease. It was held that the action was main table for the purpose
of testing the validity of such release.**

A contrary result has been reached by the California court and
denied the right to a test of the validity of release executed by
an employee to an employer on a compromise where the employee
had been injured. Considerable importance was attached to the
fact that in the case of Pacific Ry. Co. v. Dewey an action had
already been brought by the injured employee in spite of having
executed a release, but in Zayatz v. Southern Ry. Co. and in
Darling v. Panhandle & Santa Fe Ry. Co., actions for damages had
not been filed.**

In a declaratory action brought by a railroad company against
its injured employee to determine the rights and liabilities of rail-
road company under a release executed by the employee, the na-
ture and extent of the employee's injuries were material only for
the purpose of showing his knowledge of them at the time he en-
tered into the settlement and agreement, and executed the release
in question.*'

Where a covenant not to sue was made in specific reference to
a recommendation by the Federal Petroleum Co-ordinator for
War, and there was an implied fact condition in the agreement that
with a revocation of the order, the covenant not to sue was an end,
so therefore, the covenant not to sue having been terminated under
the condition above stated it is no bar to a suit, and a stay of such
suit will not be granted.**

81. Ala. — Zayatz v. Southern Railway enunciated by the California court
Co., 248 Ala. 137, 26 So.2d 545. is based upon sounder reasoning
Tex. — Darling v. Panhandle Ry. and more solid foundation.

Co., Tex.Civ.App., 209 S.W.2d 83. Tex.— Darling v. Panhandle Ry.

660. Co., supra.

82. CaL— Pacific Electric Ry. Co. v. 84. U.S.— Phillips Petroleum Co. v.
Dewey, 95 Cal.App.2d 69, 212 P.2d Shell Development Co., 64 F.
255. It is submitted that the rule Supp. 806.

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§ 515



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This would seem to be equally true with respect to a release or
an agreement of accord and satisfaction. On the other hand, how-
ever, it has been held that an action by the owner and driver of a
truck involved in an accident, causing the death of a minor, seek-
ing a declaration of their rights under a release executed by the
decedent's parents, who were his sole heirs at law, and to restrain
a prosecution of an action by them, is properly dismissed on the
ground that the owner and driver had an adequate remedy at law,
since the case involved issues of fact which would properly be
triable in an action by the parents.**

In an action by the federal government on behalf of the estate
of a restricted Indian for a declaratory judgment construing a re-
lease executed by a claimant against such estate, the petition show-
ing that $15,000 had been paid by restricted Indians for relin-
quishment of the complainant's rights sufficiently asserted a su-
perior right to that of the defendant claimant.**

§ 515. Contractual Provisions Against Suit Inapplicable to Ac-
tions for Construction of Instruments

Provisions of an indenture prohibiting the bringing of an action,
except on certain conditions, are not applicable to an action for
declaratory relief, for a construction of the instrument itself con-
taining the prohibition against suit.*^



85. Mich.— Page v. Story, 280 Mich.
43, 273 N.W. 387.

See also, Story v. Page, 280
Mich. 34, 273 IST.W. 384.

86. U.S.— Mashunkashey v. U. S.,
C.C.A.OkIa., 131 F.2d 288, cer-
tiorari denied 63 S.Ct. 665, 318
U.S. 764, 87 L.Ed. 1136.

87. N.Y.— Kelley v. Prudence Co.,
144 Misc. 651, 259 N.Y.S. 59,
wherein it is said, "Finally, there
is the argument that noncom-
pliance with the provisions of the
indenture specifying the condi-
tions under which an action may
be instituted by any one or more
of the bondholders defeat the ac-
tion which it is contended may be



brought only by the trustee. The
purpose of such provisions, which
must be construed strictly against
those who prepared the indenture,
was hardly intended to apply to
an action of this character insti-
tuted on behalf of all the bene-
ficiaries. Indeed the particular
wording of the clause relied on
would so indicate. Its stated pur-
pose is 'to promote and protect
the equal ratable rights of every
holder of the bonds and to avoid
a multiplicity of suits.' If that is
what the defendants really desire,
it appears it may be obtained in
this action."



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Ch. 9 AS ALTERNATIVE REMEDY $ 516

§ 516. Specific Performance

Where a landlord and tenant enter into an agreement for a lease
which was in all things valid, and attached to which was a copy
of the proposed lease as Exhibit A and thereafter a lease was
drawn in pursuance to such attached exhibited copy, and was ex-
ecuted by both parties, both being corporations, but the lease as
executed failed to comply with the local statute with respect to
acknowledgment and attesting witnesses, but notwithstanding this
fact, both parties recognized such lease in full force and effect for
approximately two years, when the lessee attempted to avoid the
lease because of the noncompliance with the statute.

In these circumstances, a declaratory action is proper to adjudi-
cate the rights of the parties, and in such action, a declaration
may be made of the duty of the lessee to specifically perform the
contract and the lease.**

Where it appears that the proper decree for a court to render is
one analagous to specific performance, then the court will, in order
to adequately declare and enforce the rights of the parties, enter
such a decree.**

In such an action, either party may invoke the power of the court
to correct defects in a lease or other instrument so as to carry out
the manifest intent of the parties and to reform such instruments
to conform to the intent and grant specific performance of the
reformed contract.*^

But if a court cannot by decree declare that a contract be
specifically performed it will not accomplish indirectly the same
result by the issuance of a declaration that is binding on the
parties.**

It has been held also that where a plaintiff could have obtained
full relief by an action for vSpecific performance, if the defendant
breached a valid contract for the sale of stock to the plaintiff, an

88. Ohio— RKO Distributing Corpo- ration v. Film Center Realty Co.,
ration v. Film Center Realty Co.. 53 Ohio App. 438, 5 N.E.2d 927.
53 Ohio App. 438, 5 N.E.2d 927. 91. Eng.— Chang Yen Mao v. More-

89. Mo.— Union Natl Bank v. Jessell, ing (1906) 120 L.T.J. 313.

358 Mo. 467, 215 S.W.2d 474. But see, Lyon v. Goss, 19 Cal.

90. Ohio— RKO Distributing Corpo- 2d 659, 123 P.2d 11.

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§ 517



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action for declaratory judgment as to plaintiff's right to acquire
stock with specific performance, incidental relief would not lie.**

Where a machine manufacturer refused to give feed pellet man-
ufacturer a percentage of the proceeds of sales of pellet press in
accordance with a contract whereby the two manufacturers under-
took to develop a more efficient pellet press, the feed manufactur-
er's rights under the contract were a proper subject for declara-
tory relief, and a judgment declaring the rights and duties of the
parties thereunder and limiting money awards in favor of the feed
manufacturer to a sum to which it was entitled as of the date of
the hearing on a supplemental complaint, did not exceed the court's
jurisdiction nor amount to a decree of specific performance of a
contract for personal services extending over a long period of
time.*'

§ 517. Plaintifr Required to do Equity

Where the plaintiff seeks as an alternative remedy a declaratory
judgment, adjudicating his rights and stabilizing the legal re-
lations of plaintiff and defendant, the plaintiff will be required to
do equity in the same manner as if the declaratory action was a
traditional suit in equity. An application of this principle is
found in a case where a mortgagor seeks a declaratory judgment
adjudging that notes and mortgage are void, but this relief will
not be granted unless the mortgagor is willing to do equity by re-
paying or offering to repay the money borrowed on the security
of the note and mortgage.**



92. N.Y. — Miskowitz v. Starobin,
N.Y.Sup., 181 Misc. 445, 41 N.Y.S.
2d 786, affirmed 267 App.Div. 866,
47 N.Y.S.2d 311.

93. Cal. — Universal Sales Corp. v.
California Press Mfg. Co., 20 Cal.
2d 751, 128 P.2d 665.

94. Cal. — Ephraim v. Metropolitan
Trust Co. of California, 28 Cal.
2d 824, 172 P.2d 501, see also 159
P.2d 694.

Tenn. — Harrill v. American
Home Mortg. Co., 162 Tenn. 371,
36 S.W.2d 888, denying rehear-
ing 161 Tenn. 646, 32 S.W.2d 1023,



wherein it was said, "It is not
apparent why the complainants
should be entitled to obtain such
relief under the Declaratory
Judgments Act, except on the
same conditions on which they
could obtain it by a bill brought
for the express purpose of ad-
judging the deed of trust to be
void and unenforcible. This
court has held, and it is well
settled in other jurisdictions, that
the granting of a declaratory
judgment is discretionary. New-
sum V. Interstate Realty Co., 152



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Ch. 9 AS ALTERNATIVE REMEDY § 518

Where a plaintiff brought an action for declaratory relief in the
nature of a suit to remove clouds from title to real property that
was covered by certain instruments of encumbrance, which were
properly voidable, the plaintiffs could not obtain a declaration and
removal of the clouds against their title without doing equity and
paying the debt attempted to be secured by such instruments of
encumbrance.* •

Where a husband in an action seeking declaratory relief regard-
ing the validity of a contract settling property rights between him-
self and his ex-wife, which contract was entered into before the
wife procured a divorce, alleged that at the time of the execution
of the agreement he had good grounds for divorce, and that the
wife had no legal grounds therefor, it was presumed by the court
that the husband obtained an advantage from the divorce, and be-
cause of the confidential relationship between husband and wife
the contract was obtained by fraud and undue influence on his part.
In such a case the state's interest in preserving the matrimonial
relation did not preclude the application of the principle that where
a plaintiff cannot establish his case without showing that he has
violated the law the court will not assist him to defeat such con-



Online LibraryWalter Houston AndersonActions for declaratory judgments : a treatise on the pleading, practice, and trial of an action for a declaratory judgment, from its inception to its conclusion, with forms → online text (page 36 of 112)