Burroughs Corp. v. Farmers Dairies

538 S.W.2d 809, 1976 Tex. App. LEXIS 2907

• Court: Court of Appeals of Texas
• Decided: June 16, 1976
• Docket: 6459
• Status: Published

Opinions

OPINION

STEPHEN F. PRESLAR, Chief Justice.

This is a fraudulent representation suit instituted by Appellee, Farmers Dairies, as plaintiff against Burroughs Corporation as defendant. Trial before a jury resulted in a judgment against Burroughs for $16,141.19 damages.

The issue on appeal involves discretion to allow a trial amendment at the end of the evidence. We reverse the judgment of the trial Court and remand for another trial.

Speaking of the parties as they appeared in the trial Court, plaintiff first leased, in 1968, and then purchased, in 1969, an automated accounting system from the defendant. Plaintiff is required to file monthly a report known as the Federal Milk Marketing Report, and this controversy centers around the representation that the equipment purchased would automatically produce that report. In 1972, plaintiff brought this suit for rescission of the contract and return of the purchase price in excess of $34,000.00. At the close of all the evidence, the plaintiff was permitted to file a trial amendment seeking damages, and the case was submitted to the jury on that basis rather than on the theory of rescission. The jury found that there had been misrepresentation which induced the plaintiff to install the system and found the damages for pecuniary loss were $16,141.19.

The trial Court abused its discretion in allowing plaintiff to file the trial amendment. Rule 66, Tex.R.Civ.P., provides:

“If evidence is objected to at the trial on the ground that it is not within the issues made by the pleading, * * * the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the allowance of such amendment would prejudice him in maintaining his action or defense upon the merits.”

The record in this case discloses that the allowance of the amendment, the change of the theory of recovery, resulted in prejudice to the defendant “in maintaining his action or defense.”

It is recognized that the rule is a salutary one and should be liberally construed; and that an amendment should be allowed even after close of the evidence if it merely places in the written record pleadings of issues not previously raised by the pleadings but in fact tried by express or implied consent. See 2 McDonald, Texas Civil Practice § 8.07 at 333 (rev. ed. 1970). But our concern here is that there was a complete change of the theory of recovery after all of the evidence was in. The trial amendment for damages made the case a new law suit requiring a new and different defense.

An action for damages is ordinarily based on the continued existence of the transaction, whereas an action for rescission is based on its abrogation. A party who is injured by fraud may elect to accept the situation and recover his damages, or he may repudiate the transaction and seek restoration of the status quo in an action to rescind. But it is held that he cannot do both under the doctrine of election of remedies. Andrews v. Powell, 242 S.W.2d 656 (Tex.Civ.App.—Texarkana 1951); Albin v. Isotron Corporation, 421 S.W.2d 739 (Tex.Civ.App.—Texarkana 1967, writ ref'd n. r. e.); Blum v. Elkins, 369 S.W.2d 810 (Tex.Civ.App.—Waco 1963). Plaintiff filed this suit seeking to rescind the contract and recover its purchase price. It was on file for three years and was then tried for three days, and at the conclusion of all of the evidence, the amendment was sought and allowed. The statement of facts consists of some 580 pages of evidence on the rescission theory; there is nothing about this evidence that would characterize it as being for damages rather than for rescission. Thus, there is no justification for the amendment to meet an issue tried by consent; rather, this was a new law suit.

It is held that a trial amendment ordinarily should be denied when sought after the evidence for both parties has been fully offered and when it would change the theory of the trial. 2 McDonald, Texas Civil Practice § 8.07, supra; Fullingim v. Dunaway, 267 S.W.2d 483 (Tex.Civ.App.—Beaumont 1954); Texas Employers' Ins. Ass’n v. Dillingham, 262 S.W.2d 748 (Tex.Civ.App.— Fort Worth 1953, writ ref’d n. r. e.); Traveler’s Ins. Co. v. Hobbs, 222 S.W.2d 168 (Tex.Civ.App.—San Antonio 1949); Boynton v. Smith, 110 S.W.2d 640 (Tex.Civ.App.—Beaumont 1937, writ dism’d); Tuck v. Tuck, 509 S.W.2d 656 (Tex.Civ.App.—Austin 1974, writ ref’d n. r. e.). And, see Westinghouse Electric Corp. v. Pierce, 153 Tex. 527, 271 S.W.2d 422 (1954), wherein Chief Justice Calvert said:

“ * * * The defendants had a right to assume that the case as made by the pleadings and testimony was the case and the only case they were called upon to defend and to prepare their defense accordingly. (Citing authorities). * * ”

Plaintiff/Appellee urges that the defendant has not laid the proper foundation to complain of abuse of discretion in admission of the amendment because it did not request that it be allowed to reopen to present other evidence, withdraw its announcement of ready, or file a motion for continuance. In some situations, such a requirement would be justified and there are cases so holding, but this is not such a case. Here, for three years the defendant has prepared to defend a contention that the contract should be rescinded; that case was tried — all the evidence was submitted; defendant was then met with the opposite contention that plaintiff would stand on the contract and seek its damages under it. We cannot assume that the defendant would have at hand the necessary testimony to reopen and proceed to defend this new law suit. Hence, there is no justification in saying that it must request to reopen to preserve its error. Rule 66 does not require it. Under it, defendant had the burden of convincing the trial Court that the filing of the trial amendment was prejudicial to it. As indicated from our discussion of the case, we think it met that burden. Also, there is another consideration, as Judge Calvert said in the Westinghouse Electric Corporation case, supra:

“To require the trial court to permit amendments such as the one filed in this case would disrupt orderly procedure and lead to frequent interruptions and interminable delay in concluding expensive jury trials. * * * ”

For the error of permitting the amendment, the judgment must be reversed. Under this disposition of the case, there is no purpose in discussing the other assignments of error.

The judgment is reversed and the cause remanded for another trial.