Baker v. Becker

141 N.W. 304, 153 Wis. 369, 1913 Wisc. LEXIS 178

Opinion

Kerwin, J.

The facts in the case fully appear in the statement of case hereinbefore set out.

The court below as well as the jury found that the alleged representations were made and in the main relied upon by defendant, were false, and damaged the defendant. These findings are well supported by tbe evidence notwithstanding they are vigorously assailed by counsel for appellants. True, the court disregarded the findings of the jury to the effect that the defendant did not have a right to rely upon the representations. In this regard the court was right. Upon the other findings and the evidence it was established as matter of law that the defendant did have a right to rely upon the representations, and therefore the court was justified in changing the answers to these questions or disregarding them.

Counsel for appellants, however, appear to rely with confidence upon the proposition that the defendant ought not to have been misled by the representations; that the representations were not such as a reasonably prudent man should have relied upon, the means of knowledge being equally open to both parties. We cannot agree with counsel in this contention. The material representations were not open and obvious, but on the contrary were such as might reasonably have been relied upon, as appears from the undisputed facts. True, if the representations were open and obvious and such as the defendant could have seen if he opened his eyes and looked, it is doubtless true that he could not claim that he had been deceived. But such is not the case before us. The falsity of the most material representations could have been discovered only by considerable time and research.

Appellants under this head rely upon Prince v. Overholser, 75 Wis. 646, 44 N. W. 775; Warner v. Benjamin, 89 Wis. 290, 62 N. W. 179; Bostwick v. Mut. L. Ins. Co. 116 Wis. 392, 89 N. W. 538, 92 N. W. 246; Schauer v. Bodenheimer, 150 Wis. 550, 137 N. W. 785; Jacobsen v. Whitely, 138 Wis. 434, 120 N. W. 285; Northern S. Co. v. Wangard, 117 Wis. 624, 94 N. W. 785; Kaiser v. Nummerdor, 120 Wis. 234, 97 N. W. 932; Barndt v. Frederick, 78 Wis. 1, 47 N. W. 6; Bowe v. Gage, 127 Wis. 245, 106 N. W. 1074; Farr v. Peterson, 91 Wis. 182, 64 N. W. 863. An examination of these cases will show that they are distinguishable from the instant case. Reference to a few of them will illustrate their character.

In Warner v. Benjamin, supra, the representation was merely matter of opinion, not a representation of an existing fact or past event. In Farr v. Peterson, supra, the general rule was laid down to the effect that where means of knowledge are at hand and equally available to both parties and the subject matter of the purchase equally open to their inspection, if the purchaser does not avail himself of those means and opportunities he will not be heard to say, in impeachment of the contract of sale, that he was drawn into it by the vendor’s misrepresentations. In Bostwick v. Mut. L. Ins. Co., supra, plaintiff agreed for a policy of insurance and received a different one, and upon receipt of the policy put it in a drawer without examination, although a casual glance at it and an accompanying letter would have disclosed that it was not the policy he expected. Several months after-wards, on discovery of the fact, plaintiff for the first time objected. Held, that the fraud, if any, was waived and the policy accepted.

Bowe v. Gage, supra, holds that it was not error to refuse to submit a question to the jury inquiring whether the misrepresentations were sufficient to influence the conduct of a person of ordinary intelligence; that there is no such issue in 'an action for deceit; that the sole question is whether the misrepresentations in fact deceived the party involved and materially affected his conduct.

Jacobsen v. Whitely, supra, holds that an action for deceit cannot be maintained by one who acted blindly upon statements whose falsity he knew or by the exercise of ordinary observation would have known.

The instant case is ruled by Miner v. Medbury, 6 Wis. 295; Krause v. Busacker, 105 Wis. 350, 81 N. W. 406; Lee v. Burnham, 82 Wis. 209, 52 N. W. 255; Cotzhausen v. Simon, 47 Wis. 103, 1 N. W. 473; Davis v. Nuzum, 72 Wis. , 40 N. W. 497; Woteshek v. Neuman, 151 Wis. 365, 138 N. W. 1000; Brown v. Ocean A. & G. Corp., ante, p. 196, 139 N. W. 1112; Beetle v. Anderson, 98 Wis. 5, 73 N. W. 560; and other cases in this conrt.

Appellants concede that a defrauded purchaser has two remedies: one to rescind, tender back all he has received, and recover what he has paid so that the parties would stand in statu quo; and also has the right to affirm the contract and recover damages for the fraud. It is claimed, however, by appellants that the defendant was not in position to rescind, because he had not tendered back all he had received, and the point is made that the money received from the sale of the milk rigs and milk cans, aggregating $135, had not been returned. The creamery having been destroyed by fire January 13, 1911, the defendant rogarded it good business policy to sell the articles and hold the money in the treasury of the company, and also it is claimed that because of a fire which destroyed the creamery the defendant was not in position to place the plaintiffs in statu quo, hence could not rescind. In this connection it is also insisted that by delay, acquiescence, and waiver the defendant lost his right to rescind, if he ever had any, and that moreover the defendant had an adequate remedy at law, hence equity will not interpose. We think the equitable counterclaim states a good cause of action in equity. Moreover, no objection was taken to it by way of demurrer or answer on that ground, but the plaintiffs replied to the merits and the issues raised by the counterclaim and reply thereto were tried out upon the merits. That the equitable counterclaim must be sustained on the facts here is supported by the decisions of this court. Miller v. Drane, 100 Wis. 1, 75 N. W. 413; Gullickson v. Madsen, 87 Wis. 19, 57 N. W. 965; Hall v. Bank, 143 Wis. 303, 127 N. W. 969; Hall v. Bell, 143 Wis. 296, 127 N. W. 967; Resch v. Senn, 31 Wis. 138; Scott v. Menasha, 84 Wis. 73, 54 N. W. 263; Hoff v. Olson, 101 Wis. 118, 76 N. W. 1121; Mahn v. Chicago & M. E. R. Co. 140 Wis. 8, 121 N. W. 645; Pierstoff v. Jorges, 86 Wis. 128, 56 N. W. 735; Bigelow v. Washburn, 98 Wis. 553, 74 N. W. 362. The defendant offered to do equity in the counterclaim for rescission. The court found upon sufficient evidence that in the latter part of December, 1910, and again January 20, 1911, the defendant demanded rescission. The $135 received for wagons and milk cans is held by the treasurer of the creamery company. The delay in demanding rescission and taking steps to enforce it is, we think, sufficiently explained in the evidence, and no extended discussion of the evidence on the point is necessary. Appellants specially rely upon payment of $250 by defendant to plaintiffs in January, 1911, as ratification of sale and waiver of right to rescind. But it appears that defendant did not have full information respecting the falsity of the representations at that time; besides, the conditions under which this payment was made did not amount to a payment such as would constitute ratification or waiver. The destruction of the factory by fire cannot be attributed to the defendant. Moreover, the money paid on adjustment of the loss represents the factory and is held by the clerk of the court pending the litigation, and is $1,908.95, while the evidence is that the factory at the time of sale was not worth more than $1,500. So the $135 received for property sold, and the insurance money, $1,908.95, being held for plaintiffs, the defendant offers to do equity in that regard, and it cannot be said that plaintiffs have been prejudiced by such changed conditions. We are not able to say that justice has not been done by the court below in the adjustment of the rights and equities between the parties, nor that the findings are not supported by the evidence.

It is further complained by counsel for appellants that a certain action which was pending at the time this action was commenced in which George A. Baker and H. A. Wheeler were plaintiffs and August B. Becker was defendant in some manner bas become wiped ont by tbe instant action. True, tbe record in tbe. other action was by stipulation of parties in tbis' action put in evidence and made a part of tbe record in tbis action “for tbe sole purpose of placing sucb record before tbe court so that it can be informed of tbe nature of tbe action and tbe issues involved, and not for tbe purpose of being considered as evidence either for or against tbe plaintiffs or defendant in tbis action.” Just what tbe purpose of putting tbe record in under sucb a stipulation was, is not very apparent. It is probable, however, that it was not the intention to consolidate tbe actions, or to adjudicate tbe issues involved in sucb other action in tbis, but to allow tbe other action to stand upon its own merits. - However, tbe proper time to determine whether tbe. issues involved in tbis action are res adjudicate in another is when sucb other is under consideration by tbe court, and since it may be, as appears from tbe stipulation and tbe whole record, that it was not tbe intention of tbe parties to litigate tbe issues in tbe other action in tbis, we should not attempt to consider them here. Of course if tbe issues involved in tbis action, or any of them, between the same parties, are tbe same as those involved in tbe other action, then tbe determination of sucb issues here is res adjudicata there. Rowell v. Smith, 123 Wis. 510, 102 N. W. 1; Wentworth v. Racine Co. 99 Wis. 26, 74 N. W. 551; Grunert v. Spalding, 104 Wis. 193, 80 N. W. 589; Hart v. Moulton, 104 Wis. 349, 80 N. W. 599.

Tbe court below confirmed tbe taxation of costs by tbe clerk as in an equity action. Tbis is also relied upon as error by counsel for appellants. Tbe appellants insist that tbe character of tbe action as to being legal or equitable as regards costs must be determined from tbe complaint, while tbe respondent insists that tbe whole litigation grew out of tbe defendant’s counterclaims, tbe principal one being equitable, therefore tbe defendant was entitled to full costs as in equitable actions. Tbe question seems to have been settled by this court in Ward v. American H. F. Co. 119 Wis. 12, 96 N. W. 388, against the contention of respondent, to the effect that where the action is at law upon contract the fact that an equitable counterclaim is set up and litigated does not change the character of the action as to costs. Counsel for respondent insists that Ward v. American H. F. Co., supra, is not in point because in that case judgment went for plaintiff, while on the equitable counterclaim in the present action the judgment was for defendant. But we think it clear that under the statute relating to costs the character of the action, whether one at law upon contract, or in equity, must be determined from the complaint. Sec. 2921, Stats. Costs in the instant case other than disbursements were allowed at $98.24. They should have been limited under the statute to $25 and disbursements. Sec. 2921, Stats. Eor this error the judgment must be modified.

By the Court. — The judgment of the court below is modified by reducing the item of $98.24, costs taxed exclusive of disbursements, to $25, and as so modified is affirmed. The appellants are entitled to costs in this court.