Turner Manufacturing Co. v. Gmeinder

198 N.W. 611, 183 Wis. 664, 1924 Wisc. LEXIS 204
CourtWisconsin Supreme Court
DecidedMay 6, 1924
StatusPublished
Cited by11 cases

This text of 198 N.W. 611 (Turner Manufacturing Co. v. Gmeinder) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Turner Manufacturing Co. v. Gmeinder, 198 N.W. 611, 183 Wis. 664, 1924 Wisc. LEXIS 204 (Wis. 1924).

Opinion

Jones, J.

TJiis is an appeal from an order granting an amendment to the answer and a new trial.

The action was brought on a promissory note given by the defendant to the plaintiff for the purchase of ten shares of preferred stock. The defendant answered alleging fraud in obtaining the subscription to the stock and prayed that the complaint be dismissed and that the note be returned.

In a special verdict the jury found for the defendant as to the false representations; that they were relied on, and that the defendant rescinded his subscription within a reasonable time after discovering the facts.

On the trial it appeared that the subscription was for ten shares of common stock for which the defendant paid $250 in cash, and ten shares of preferred stock for which the note was executed. None of the stock ever came into possession of the defendant; but by the terms of the note-was left with the plaintiff as collateral security for the note.

Both parties made application for judgment on the verdict, and the court held that the testimony established that the subscription to both kinds of stock was part of a single contract and not under severable contracts, and that the defendant could not‘have the relief demanded because he had not returned or offered to return the common stock, and ordered judgment for plaintiff.

Thereupon defendant’s counsel obtained an order to show cause why the defendant should not be allowed to amend his answer and include the facts relating to the common stock, and an offer to return it, or be granted a new trial.

[666]*666On this motion defendant made affidavit that in his conferences with his counsel nothing was said about the common stock, as defendant believed it was a separate transaction and did not relate to the suit; that he was willing to return the common stock; that it was worthless; that he had not believed he could return the stock he had never received and over which he had never had any control; that the plaintiff was insolvent and he had supposed that it was useless to make any claim against plaintiff for the return of the stock; and that he had always been willing to return it.

There was also an affidavit of defendant’s counsel that up to the time of the trial and until defendant testified he had no knowledge that common stock had been purchased; “that by reason of the conduct of the trial taking up the attention of counsel, the full import of the evidence as given by the testimony of the defendant in regard to the purchase of the common stock escaped the attention of counsel, and did not at that time make a motion to amend the pleadings and offer to return said common stock at that time.”

Other portions of the affidavit repeated some of the statements made in the affidavit of defendant. There was filed a proposed amended answer setting up fraud as in the original answer and containing allegations as to the common stock and stating that defendant was willing to return the same as far as was within his power.

There was also filed an affidavit on behalf of plaintiff setting up the history of the litigation and the facts occurring at the trial for the purpose of showing that the motion of the defendant was too long delayed. It also contained a statement of the expenses incurred relating to the trial.

On the affidavits the court made the order appealed from setting aside the verdict as in furtherance of justice, on condition that within ten days the defendant pay $35, costs and $50 counsel fees, and that the amended answer be allowed to stand, and that a new trial be granted.

[667]*667We agree with the view expressed by the trial judge that one who seeks to rescind a contract on the ground of fraud must rescind the whole contract. He must rescind in to to or not at all. Although there are some exceptions to the rule which need not be discussed, the general doctrine is so well established that it is unnecessary to cite authorities which declare it.

A more serious question, as applied to the facts of this case, relates to the proposition urged by plaintiff’s counsel that “a pleading cannot be amended after verdict to allege facts not in existence at the time of the verdict.”

Counsel rely on the rule stated in 31 Cyc. 392, that, “as a general rule, an amendment cannot allege facts that have arisen since the commencement of the action so1 as to set up a cause of action, where none before existed, or so as to set up a new cause of action which has accrued since the action was begun, or additional grounds of action.”

They also rely on Skinners v. Brill, 38 Wis. 648, and Pape v. Carlton, 130 Wis. 123, 109 N. W. 968. In both of these cases the plaintiff sought to amend by stating a cause of action which had arisen after the action was brought.

In this case the trial court based the order allowing the amendment on sec. 2830, Stats., which is in part as follows:

“The court may, upon the trial or at any other stage of the action, before or after judgment, in furtherance- of justice and upon such terms as may be just, amend any process, pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect, or by inserting other allegations material to the case, or, when the amendment does not 'change substantially the claim or defense, by conforming the pleading or proceeding to the facts proved.”

In his opinion the trial judge referred to Kennedy v. Waugh, 23 Wis. 468, where it was held that the order to amend may be made after judgment even though the necessity for the amendment was known at the trial.

[668]*668The facts in this case are so different from those in the cases relied on by plaintiff’s counsel that it is not clear that these cases are applicable.

The court instructed the jury that the answer was tantamount to a rescission, but when plaintiff objected that this instruction was not limited to being tantamount to a rescission of the subscription, which included both the common and preferred stock, the court held as above stated and directed judgment for plaintiff.

Both the court and the plaintiff’s counsel assumed that there could be rescission in part by such an answer. It is what is called a “rescission by plea,” and, as said by a le'arned author, may be a rescission of the contract and not merely a defense to- the action.

“If still it be insisted that after suit it is too late for rescission, since ex concessis there was. a binding contract when the plaintiff sued, so that the plaintiff had a cause of action unless the fraud is treated as an ordinary defense,— the answer is that it is the plaintiff’s own fault that a rescission after suit may defeat him. He has brought the defendant into court against the defendant’s will, knowing necessarily the answer that will be made to his demand; and the defendant may not have been under any duty before to rescind. Hence it could not be said that the defendant had necessarily misled him in not rescinding, and so induced the, plaintiff to believe that the right to rescind had been waived and to change his position by bringing suit; though it would probably be true that if the defendant had so conducted himself, he would be barred not merely of his right to rescind, but what that involves^ of his right to plead the fraud.” 1 Bigelow, Fraud, 80.

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Bluebook (online)
198 N.W. 611, 183 Wis. 664, 1924 Wisc. LEXIS 204, Counsel Stack Legal Research, https://law.counselstack.com/opinion/turner-manufacturing-co-v-gmeinder-wis-1924.