American Mills Co. v. Hoffman

275 F. 285, 1921 U.S. App. LEXIS 2226

• Court: Court of Appeals for the Second Circuit
• Decided: July 6, 1921
• Docket: No. 124
• Status: Published

Opinion

ROGERS, Circuit Judge

(after stating the facts as above). At the close of the entire case, after both the plaintiffs and defendant had put in their testimony and rested, the defendant renewed motions made at the close of the plaintiffs’ case and asked the court to dismiss the complaint on the ground that the plaintiffs had failed to make out their cause of action in that they had not shown that they delivered the quantity of twine called for in the contract. There were other grounds also assigned, as that they had not made delivery'within the time required by the contract, or in the manner required by the contract, but by installments. The court denied the motions, and then asked the plaintiffs’ counsel whether he desired to amend the complaint.. Counsel replied that he certainly did, whereupon the court declared that he would give permission to amend. The court then informed the plaintiffs’ counsel that he should move to reopen his case and to amend. This the counsel did. Then the' court said:

“And I suppose you wish to ask damages for the value of the goods you may have proved to have, been actually delivered, and the difference between the contract price and the market price of any other goods, the delivery of which you tendered?”

Counsel answered that he did. This happened at the close of the Friday afternoon session. Counsel handed to defendant’s counsel the amended complaint on Saturday. On Monday morning defendant put in his amended answer, and the trial proceeded. The plaintiffs called three new witnesses whose testimony covers 33 printed pages of the record and recalled one other witness, and the examination of the four occupied the entire morning session of the court. At the afternoon session defendant recalled its three former witnesses who were examined and cross-examined, the judge charged the jury, and the verdict was returned on that day. The defendant claims that it was seriously prejudiced. It was a Georgia corporation with offices in Atlanta, and had in court at that time its president and the man who had negotiated the contract. They came from Georgia for the purpose of testifying, and brought with them such records as their counsel instructed them to bring to meet the issues presented by the original complaint. They allege they had no witnesses in court on the issues presented by the amended pleadings, and that they were able to make no preparations to meet the issues the new complaint raised.

The permission to amend was granted over defendant’s objection. The grounds of objection as stated by its counsel were surprise and the fact that the amendment stated a different cause of action. The defendant asked to be allowed to withdraw a juror, and this was refused.

It is held in New York that after trial pleadings cannot be conformed to the proof. Northam v. Dutchess County Mutual Insurance Co., 177 N. Y. 73, 75, 69 N. E. 222. But in the instant case the amendment, as we have seen, was made after the parties rested and before the case was submitted to the jury, and opportunity was given to introduce new testimony to meet the changed issues.

The cause of action as originally set forth in the complaint was for goods sold and delivered. It is claimed that the effect of the amendment was to change the cause of action from one for goods sold and delivered to one for breach of contract for failure on defendant’s part to accept the goods after shipment.

An action for goods sold and delivered can be maintained only when the contract is fully executed on the part of the seller. Hyde v. Liverse, 12 Fed. Cas. p. 1112, No. 6972. If he has not fully performed, then his action should be for goods bargained and sold. Atwood v. Lucus, 53 Me. 508, 89 Am. Dec. 713; Allman v. Davis, 24 N. C. 12. But if the title remains in the seller the action is on the special contract. Shepard v. Mills, 173 Ill. 223, 50 N. E. 709. The rule is stated in Saunders on PL & Evid. 536, that, to support an action for goods sold and delivered, the plaintiff must prove, not only such a delivery as will vest the property in the goods in the defendant, but such a delivery as will divest himself of all lien upon the goods, and enable the defendant to maintain trover for them without paying or offering to pay for them.

The law is well settled that, where the contract has been performed and nothing remains to be done but to pay the amount due under it, a recovery may be had under the common counts. ' But the plaintiff’s evidence made out no such case, and it was thought by court and counsel to he necessary to amend the complaint. It was accordingly amended that damages might be recovered because of defendant’s failure to accept the goods. The amendment was based upon and intended to set forth a cause of action under section 144, subd. 3, of the Personal Property Law of the state of New York, which provides as follows:

“3. Although the property in the goods has not passed, if they cannot readily be resold for a reasonable price, and if the provisions of section one hundred and forty-five are not applicable, the seller may offer to deliver the goods to the buyer, and i£ the buyer refuses to receive them, may notify the buyer that the goods arc thereafter held by the seller as bailee for the buyer. Thereafter the seller may treat the goods as the buyer’s and may maintain an action for the price.” 40 McKinney’s Cons. Laws of New York, 236.

The proof required to support the amendment was different from that required under the original complaint. Under the amendment it was incumbent upon plaintiffs to prove:

(1) The sale.

(2) Performance by plaintiffs.

(3) The breach by defendant.

(4) Damages, which, if the goods were readily resalable for a reasonable price, would be the difference between that price and the contract price.

(5) If the goods were not readily resalable for a reasonable price, that plaintiffs had notified the defendant that they would thereafter hold the goods as bailee for the defendant, and thereupon the measure of damages would be the contract price.

As the original complaint was for goods sold and delivered, the evidence required to support it was:

(1) Proof of the sale.

(2) Proof of delivery of the goods.

(3) Proof of due performance by plaintiffs of all conditions of the sale contract.

(4) Proof of nonpayment by defendant.

This proof the plaintiffs had failed to produce.

The New York courts in construing this statute have uniformly held that to maintain the action under it the plaintiff must show affirmatively :

(a) That the goods could not readily be resold for a reasonable price.

(b) Notifications by the seller to the buyer that the goods were thereafter held by the seller as bailee for the buyer. Mindlin v. Freydberg et al., 171 N. Y. Supp. 250; Mosler Safe Co. v. Brenner, 100 Misc. Rep. 107, 165 N. Y. Supp. 336; Crown Electric Ill. Co. v. Chiariello, 106 Misc. Rep. 511, 175 N. Y. Supp. 167.

[1] The power of a court to allow the amendment of pleadings is incidental to the exercise of the judicial power. In Tilton v. Cofield, 93 U. S. 163, 166, 23 L. Ed. 858, the court declared that—

“Allowing amendments is incidental to the exercise of all judicial power, and is indispensable to the ends of justice. Usually, to permit or refuse, rests in the discretion of the court; and the result in either case is not assignable for error.” .

And in Standard Bitulithic Co. v. Curran, 256 Fed. 68, 70, 167 C. C. A. 310, 312, we declared that—

“Courts, in tfie exercise of their common-law jurisdiction, may in their discretion permit pleadings to be amended at any time before verdict, if such amendment does not surprise or prejudice the opposite party.”

An amendment which changes a cause of action would ordinarily surprise and prejudice the opposite party and not meet the test there laid down.

Revised Statutes of the United States, § 954 (Comp. St. § 1591), provide that a federal court “may at any time permit either of the parties to amend any defect in the process or pleadings, upon such conditions as it shall, in its discretion and by its rules, prescribe.” The words quoted may be found in the Judiciary Act of 1789, which established the federal courts. Stat. at L. vol. 1, c. 20, § 32, p. 91. The power of a federal court to amend pleadings has existed from the beginning and exists independently of any state statute.

The Revised Statutes provide in section 914 (Comp. St. § 1537) that the practice, pleadings, and forms and modes of proceeding in civil causes, other than equity and admiralty causes, shall conform in the federal courts as near as may be to the practice, pleadings, and forms and modes of proceeding existing at the time in like causes in the courts of record of the state within which the federal courts are held. It is to be observed, however, that as respects the amendment of pleadings the federal courts are not controlled by the Conformity Act (Comp. St. §§ 6817, 6818), and arc not subject either to the local state law or to the state practice. Where Congress has legislated specifically upon a subject, such as that of the amendment of pleadings, the power of the federal courts in that particular matter is to be exercised under the act of Congress, and not under the local statutes. Bowden v. Burnham, 59 Fed. 752, 8 C. C. A. 248; Lange v. Union Pacific R. Co., 126 Fed. 338, 340, 62 C. C. A. 48, certiorari denied 193 U. S. 671;¹ De Valle da Costa v. Southern Pacific Company (C. C.) 167 Fed. 654; Truckee River General Electric Company v. Benner, 211 Fed. 79, 127 C. C. A. 503. See, also, Silvas v. Arizona Copper Co. (C. C.) 213 Fed. 504, 506.

[2] In what is hereinafter said in reference to the New York cases we are not to be understood as resting our decision upon the authorities of the local state, but are using them as good illustrations of fundamental principles adhered to by courts generally in the exercise of the power to amend with which courts are invested. The principle announced in those cases is simply conformable to the general rule that no amendments can he allowed which change the form or nature of the action. Stevenson v. Mudgett, 10 N. H. 338, 34 Am. Dec. 155: Thyssen v. Davenport Ice, etc., Co., 134 Iowa, 749, 112 N. W. 177, 13 L. R. A. (N. S.) 572; Flanders v. Cobb, 88 Me. 498; Barnes v. Gibbs, 31 N. J. Law, 317, 86 Am. Dec. 210; Allen v. Tuscarora Valley R. Co., 229 Pa. 97, 78 Atl. 34, 30 L. R. A. (N. S.) 1096, 140 Am. St. Rep. 714; Charmley v. Charmley, 125 Wis. 297, 103 N. W. 1106, 110 Am. St. Rep. 827; Connecticut Fire Ins. Co. v. Monroe Circuit Judge, 77 Mich. 231, 43 N. W. 871, 18 Am. St Rep. 398; Heidel v. Benedict, 61 Minn. 170, 63 N. W. 490, 31 L. R. A. 422, 52 Am. St. Rep. 592; Montgomery First National Bank v. Chandler, 144 Ala. 286, 32 South. 822, 113 Am. St. Rep. 39; Baldwin v. Western Union Telegraph Co., 93 Ga. 692, 21 S. E. 212, 44 Am. St. Rep. 194.

New York Code of Civil Procedure, § 723, provides as follows:

“The court may, upon the trial, * * * amend any process, pleading, or other proceedings u where the amendment does not change substantially the claim or defense, by conforming the pleading or other proceedings to the facts proved. And, in every stage of the action, the court must disregard an error or defect, in the pleadings or other proceedings, which does not affect the substantial rights of the adverse party. * ® * ”

While there is great power of amendment under the New York Code, the amendment cannot bring in a new cause of action. In Reeder v. Sayre, 70 N. Y. 180, 190, 26 Am. Rep. 567, the court allowed the complaint to be amended by alleging that the plaintiffs sued in their character as surviving partners instead of tenants in common as this did not change the cause of action. “That,” said the court, “remained the same, and required no different proof and no additional parties.”

In Wright v. Delafield, 25 N. Y. 266, 269, Judge Smith, writing for the court, in speaking of the rules allowing affirmative relief upon the pleadings, expressed his opinion that it was—

“quite problematical whether the relaxation of this rule which has been introduced under the Code in modem practice will not involve and produce much greater confusion and mischiefs than it will remedy.”

He then went on to say:

“It is true that the courts are more liberal than formerly in making or allowing amendments of pleadings, and when the substantial rights of the parties have been fairly tried, trifling variances are disregarded, and judgment given according to the real right of the case as established. Corning v. Corning, 2 Seld. 97; Hall v. Gould, 3 Kern. 127; 28 Barb. 441-602; 33 Id. 238.

“But these cases assume, and this right of disregarding variances proceeds upon the ground, that the substantial rights of the parties are set up in the pleadings, and section 169 forbids amendments where the party will be misled or surprised. * * * Parties go to court to try the issues made by the pleadings, and courts have no right impromptu to make new issues for them, on the trial, to their surprise or prejudice, or found judgments on grounds not put in issue, and distinctly and fairly litigated.”

The courts of that state, as elsewhere, adhere to the fundamental rule that a judgment shall be secundum allegata et probata, and they have declared that any departure from that rule is certain to produce surprise, confusion, and injustice. They have said with much force that pleadings and a distinct issue are essential in every system of jurisprudence, and that there can be no orderly administration of justice without them.

“If a party can allege one cause of action and then recover upon another, his complaint will serve no useful purpose, but rather to ensnare and mislead his adversary.” Brightson v. Claflin Co., 180 N. Y. 76, 81, 72 N. E. 920, 921; Southwick v. First National Bank of Memphis, 84 N. Y. 420, 428, 429.

In Walrath v. Hanover Fire Insurance Company, 216 N. Y. 220, 110 N. E. 426, the complaint alleged that defendant had insured the plaintiff’s buildings against fire and then attempted wrongfully to cancel the contract. At the close of the entire evidence the trial court permitted the plaintiff over the defendant’s objection to amend the complaint by inserting therein allegations to the effect that defendant agreed to deliver the policy of insurance and had failed and neglected to perform that agreement. This was held reversible error, and a judgment for the plaintiff was reversed. The court held the amendment changed substantially the claim made in the complaint, which was error. And it was held also to be error to allow an amendment to be made at a time which did not allow the defendant an opportunity to meet by proof the allegations made against it. The original complaint alleged an executed contract of insurance. The amended complaint alleged an executory contract. The court said:

“It is fundamental tliat in civil actions the plaintiff must recover upon the facts stated in his complaint, or not at all. In case a complaint proceeds on a definite, clear, and certain theory, It will not support or permit of another theory because it contains isolated or subsidiary statements consistent therewith. A. party must recover not only according to his proofs, but according to his pleadings.”

In New York the courts have no power so to amend a complaint as to change the cause of action. Walrath v. Hanover Fire Ins. Co., 216 N. Y. 220, 110 N. E. 426; Dexter v. Ivins, 133 N. Y. 551, 30 N. E. 594; Southwick v. First National Bank of Memphis, 84 N. Y. 420, 428; Balch v. Wurzburger, 9 Misc. Rep. 74, 29 N. Y. Supp. 62; Dows v. Morrison, 2 Misc. Rep. 54, 20 N. Y. Supp. 860.

In Moniot v. Jackson, 40 Misc. Rep. 197, 81 N. Y. Supp. 688, a complaint charged trustees with negligence, and after the proof was in the plaintiff was allowed to amend his complaint to conform with the proof and charge a nuisance. The court held this could not be done for it clearly changed the action from one cause to another.

And a complaint under a contract of employment for salary cannot be changed into an action for damages for breach of the employment contract. Balch v. Wurzburger, supra.

In Zboynski v. Brooklyn City R. R. Co., 10 Misc. Rep. 7, 30 N. Y. Supp. 540, the judgment below was reversed because of an amendment made in the complaint at the trial. The court said:

‘“fihe court upon the trial is not authorized to allow an amendment which substantially changes the claim or defense * * * and the amendment was not only a substantial change of the claim, hut was the substitution of another cause of action for the one pleaded, and that is forbidden by tbe law at the trial, notwithstanding the broad discretion confided to courts in the matter of liberal amendments.”

It has been held that, in determining whether the modification of a complaint is a substitution of a new cause of action, two facts must be ascertained:

(1) Will the same evidence support both complaints?

(2) Will the same measure of damages apply to each?

It is said that both questions must be answered in the affirmative to hold the modification a proper one. Liese v. Meyer, 143 Mo. 547, 555, 556, 45 S. W. 282; Ross v. Mineral Land Co., 162 Mo. 317, 331, 62 S. W. 984; Jacobs v. Chicago, Peoria & St. Louis R. Co. (Mo. App.) 204 S. W. 954 (1918).

(3) From what has been already said it has been made evident that in the instant case the same evidence will not support the original and amended complaints. After the amendment was made in order to support the amended complaint it was necessary to reopen the case and allow the plaintiff to call new witnesses and to introduce entirely new testimony. The original claim had been changed in a “substantial” manner, and in doing so the court exceeded its authority.

It is no answer to say that the defendant was not harmed by what was done. We have no right to speculate upon that question. But it is by no means clear that he was not seriously prejudiced. In South-wick v. First National Bank of Memphis, supra, the action alleged and the cause of action proved at the trial differed. It was said that the defendant had probably not been misled. Judge Earl, writing for the New York Court of Appeals, referring to this, declared that it was no answer. He said:

“A defendant may learn outside of the complaint what he is sued for, and thus may be ready to meet plaintiff’s claim upon the trial. He may even know precisely what he is sued for when the summons alone is served upon him. Yet it is right to have a complaint, to learn from that what he is sued for, and to insist that that shall state the cause of action which he is called upon to answer, and when a plaintiff fails to establish the cause of action alleged the defendant is not to be deprived of his objection to a recovery by any assumption or upon any speculation that he has not been injured.”

[4] It is proper for us to add that it was prejudicial error to admit testimony that the defendant had placed certain orders with the Worth & Dyke Manufacturing Company, of Richmond, Va., and that after the armistice it had attempted to cancel them. The defendant’s witness Miller was asked and reasked again and again after he had said he knew nothing about it and over the objection of counsel whether the defendant had not asked the cancellation of the orders. The same question was put to defendant’s witness May. This had no bearing upon the issue, and was clearly irrelevant and immaterial. It was calculated to prejudice the jury against the defendant and to leave an impression on their minds that the defendant was lacking in due regard of its contractual obligation.

The judgment is reversed, and a new trial ordered.

1 24 Sup. Ct. 853, 48 L. Ed. 841.