Before DUFFY and KNOCH, Circuit Judges, and PLATT, District Judge.
On July 10, 1959, this suit was commenced by filing a complaint in ten counts. It alleged a concealed fraud by defendant which led to and induced the execution of a written settlement agreement between the parties to this suit and a third person. On March 7, 1960, on motion by defendant, seven counts of the complaint were dismissed for failure to state a claim, and one count was ordered stricken from the file as scandalous; all, however, with leave to plaintiff to move to amend within fifteen days.
On March 21, 1960, plaintiff filed motions for leave to amend counts 1, 2, 3, 4, 5, 6, 7 and 9 by interlineation. On April 14, 1960, after a pretrial conference, the Court denied these motions. On this same date, plaintiff filed two additional motions, 1) to dismiss counts 8 and 10 of the original complaint without prejudice, and 2) for an extension of thirty days in which to prepare motions to amend the complaint. On May 17, 1960, the Court entered an order granting the first motion and denying the second.
On June 13, 1960, plaintiff appealed from the May 17, 1960 order, but this Court dismissed the appeal on the ground that the May 17th order was not a final order or judgment. On October 12, 1960, plaintiff employed new counsel, and on October 31, 1960, an amended complaint in three counts was filed. On December 19, 1960, the District Court sustained the defendant's motion to strike the amended complaint and dismissed the plaintiff's action.
On January 11, 1961, the plaintiff, pursuant to Rule 60(b), Federal Rules of Civil Procedure, 28 U.S.C.A. moved the District Court for an order vacating and setting aside the December 19th judgment for the purpose of permitting the filing of an amended complaint. On January 18, 1961, the Court denied the motion and the plaintiff here appeals to this Court from both the December 19th and the January 18th orders.
The plaintiff contends that under Rule 15(a) of the Federal Rules of Civil Procedure, he has the absolute right to file an amended complaint. Rule 15(a) provides that, "A party may amend his pleading once as a matter of course at any time before a responsive pleading is served * * *". A motion to dismiss is not a responsive pleading within the meaning of this rule. Peterson Steels, Inc. v. Seidmon, 7 Cir., 188 F.2d 193.
A literal reading of Rule 15(a) might suggest that a plaintiff would be entitled as of right to one amendment to his complaint without any limit of time, despite the filing of a motion to dismiss. This has led some courts and commentators to interpret Rule 15(a) as subject to the qualification that the plaintiff may not amend after the court has dismissed the complaint except upon leave of the court. United States v. Newbury Mfg. Co., 1 Cir., 123 F.2d 453; Kelly v. Delaware River Joint Commission, 3 Cir., 187 F.2d 93; 3 Moore, Federal Practice § 15.07, page 826 (2d ed. 1948).
This Court has taken a more liberal view of Rule 15(a). In the Peterson Steels case, supra, the action was for breach of contract. The District Court sustained the motion to dismiss. Plaintiff thereafter filed a motion for leave to file an amended complaint. The District Court denied the motion saying the proposed complaint was essentially the same as the one originally filed. This Court said, at page 194 of 188 F.2d, "As defendants had not served a responsive pleading, plaintiff was entitled to file his amended complaint as a matter of course and was not required to ask leave of court; it was error, however, to deny such leave when the request was made."
In Peckham v. Scanlon, 241 F.2d 761, 764, this Court approved a liberal interpretation of Rule 15(a), and at page 764 said, "This court in Peterson Steels, Inc. v. Seidmon, 7 Cir., 188 F.2d 193, 194, recognized the rule as conferring an absolute right to amend."
When plaintiff filed his motions on March 21, 1960, they were for leave to amend certain counts of the complaint by interlineation. Plaintiff did not seek to amend as a matter of right, and the District Court refused to grant him permission to amend. No attempt was made to file an amendment as of course and without asking permission of the court until October 31, 1960, when plaintiff's new counsel filed the amended complaint containing three counts. No responsive pleading had been filed up to that date. At least two of the grounds relied on by the Court to strike this complaint were that plaintiff had not sought leave of the Court under Rule 15, and that he failed to obtain leave of the Court or written consent of the defendant for the filing of an amended complaint.
We think plaintiff was entitled to file the amended complaint containing three counts as of course. Leave of the Court was not necessary.
The District Court properly considered the amended complaint upon the merits. This complaint did not refer to or adopt the original complaint or any part thereof. The counts were based on a theory of damages for concealed fraud in the violation of a confidential and trust relationship, both as to an express trust and a constructive trust in Fuhrer Ford Milling Company stock, its earnings and dividends. Also, for misrepresentation by the defendant while acting in a fiduciary and trust relationship.
The motion to dismiss the counts of the original ten-count complaint were sustained primarily on three grounds, 1) failure to allege facts that the plaintiff had any interest in the property in question; 2) the original conveyance to the defendant was in violation of the Indiana criminal statute forbidding defrauding of creditors; and 3) the Indiana statute of limitations. The motion to amend by interlineation was ...