Sturtevant v. Dowson

219 P. 802, 110 Or. 155, 1923 Ore. LEXIS 185

• Court: Oregon Supreme Court
• Decided: November 7, 1923
• Status: Published

Opinions

McBRIDE, C. J.

It will be observed that the action upon the note was begun June 1, 1921, and the alleged breach of the agreement mentioned did not occur until October 13, 1921. We are clear that these counterclaims for alleged breach of the contract not to engage in business were not proper and have no place in this case. We do not find any precedent for allowing a counterclaim upon a cause of action which had not matured at the time of the commencement of plaintiff’s action, and such seems to be the condition of the authorities: 1 Sutherland’s Pleading, Practice and Forms, § 628, p. 374; Gannon v. Dougherty, 41 Cal. 661; McGuire v. Lamb, 2 Idaho, 378 (17 Pac. 749); McGuire v. Edsall, 14 Mont. 359 (36 Pac. 453), and the many cases there cited.

We have not cited the New York cases because the statute there expressly excludes counterclaiming of unmatured causes of action, but the statutes of California, Idaho and Montana are similar to ours in this respect. An apparent exception to the rule, but which exception is only apparent when the reason of it is understood, arose where a wrongful attachment was sued out at the commencement of the action. Such cases are Reed v. Chubb Brothers, Barrows & Co., 9 Iowa, 178; Rumsey & Co. v. Robinson & Atherton, 58 Iowa, 225 (12 N. W. 243), and Waugenheim v. Graham, 39 Cal. 169. All these cases arose under statutes permitting cross-complaints similar to our counterclaim, sometimes more liberal and, in other instances, sometimes more narrow; but the underlying principle in all these cases is that the wrongful attachment was instituted coincidentally with the commencement of the action and so, by reason of such wrongful attachment, a cause of action accrued to the defendant at the time of the commencement of plaintiff’s action. We find no other cases sustaining defendants’ theory than these and, as is shown, they are distinguished from this case.

While “counterclaim” includes both setoff and recoupment, it is a more comprehensive term than either in that it permits the defendant to recover against the plaintiff any balance which may have existed in his favor at the time of the commencement of plaintiff’s action, which was not the case with a defense pleaded by way of setoff or recoupment before the statute of counterclaim in equity. Other than the difference above mentioned there seems to be no logical distinction, and the defendant was never permitted to set off or recoup for a cause of action which had not accrued in his favor when the plaintiff’s action was commenced. The only defense which the defendants had when plaintiff began this action was that of fraudulent misrepresentation as to the value of the stock and goodwill and as to the amount of the daily sales made as to each of which the jury found in favor of the plaintiff under unquestionably proper instructions by the court upon that subject. In other words, the jury found that there was no legitimate defense to this action when it was begun.

It was never the policy or intent of the law to permit a defendant, who at the time suit was brought actually owed the debt, to prolong litigation for several months and then lug in alleged defenses which had not accrued when the action was commenced against him. This being true, it was not error for the court to exclude the testimony of a supposed expert as to the value of the goodwill and the stock of goods affected by an alleged breach of contract occurring several months after plaintiff’s action was commenced. The only error that was committed was in submitting that question to the jury at all. All evidence on that subject should have been excluded and had there been an appeal by the plaintiff on account of the court submitting this quéstion to the jury we should have been compelled to reverse the case in his favor. As it is, he has not appealed and the abatement sought by the defendants must be allowed to stand, but, instead of being injured in the premises, defendants have received an undue credit of $300.

Mr. H. E. Slattery for the petition. Mr. F. E. Smith, contra.

This view of the case renders it unnecessary to con-, sider the other questions arising on the rejection of evidence on the other causes of action and the judgment will be affirmed. Aeeirmed.

Harris and Mo Court, JJ., concur. Burnett, J., took no part in the decision of this case.