Wachowski v. Lutz

201 N.W. 234, 184 Wis. 584, 1924 Wisc. LEXIS 313
CourtWisconsin Supreme Court
DecidedOctober 14, 1924
StatusPublished
Cited by12 cases

This text of 201 N.W. 234 (Wachowski v. Lutz) 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
Wachowski v. Lutz, 201 N.W. 234, 184 Wis. 584, 1924 Wisc. LEXIS 313 (Wis. 1924).

Opinion

Owen, J.

The court construed the action as one at law for the recovery of damages. The appellants, contend that it is an equitable action for rescission and that the judgment should have been for a cancellation of the deeds and a restoration of the status quo, or such other equitable relief as may be appropriate in the premises. There is no express or implied allegation in the complaint that plaintiffs acted with reasonable promptness in rescinding or offering to rescind, or in bringing the action, after the discovery of the alleged fraud. The court found as a fact that

“The plaintiff has, since being in a position where he knew, or ought to have known, the falsity of the representations hereinbefore found, continued to live on the farm in the town of Kronen wetter, has cleared an additional four acres, has built a granary at an expense of about $600, and obtained new loans and given new mortgages on said farm, aggregating $4,100, which are now unpaid. The plaintiff did not give notice of any claim of misrepresentation nor demand any damages nor rescission of the exchange until after all of the foregoing transactions had occurred.”

In order to entitle the plaintiffs to a rescission of the contract they should have acted to that end with reasonable promptness after the discovery of the fraud perpetrated upon them. Mueller v. Michels, ante, p. 324, 197 N. W. 201, 199 N. W. 380. The complaint was not only barren of such a necessary allegation, but the finding of the court, fully supported by the evidence, negatives such action on the part of the plaintiffs. The court correctly construed the action as one at law for the recovery of damages.

The appellants except to the failure of the court to find in their favor upon various other alleged misrepresentations. An examination of the record shows that as to such representations the testimony was in conflict and that.there was no such preponderance of the evidence in favor of the plaintiffs’ contentions as to warrant this court in disturbing the action of the trial court in refusing to so find. We are at a [589]*589loss to understand how the appellants’ counsel can seriously urge this as a ground for reversal. His attitude manifests a most partisan view of the evidence and a zeal for the interests of his clients that interferes with that fair and impartial presentation of facts by which alone attorneys can aid and win the confidence of courts.

Appellants next contend that the judgment fails to compensate them for fraud perpetrated independent of actual misrepresentations. The fraud referred to is the secret' employment by the defendants of the father-in-law of one of the plaintiffs to assist them in making the deal. The contention is that the. defendants, knowing that the plaintiffs reposed trust and confidence in John Zywicki, the father-in-law of the plaintiff Adam Wachowski, agreed to pay Zywicki $100 in case the deal should be effected; that in consummating the deal they did rely upon the judgment of John Zywicki, but that such judgment had been tainted by reason of the secret employment of him by the defendants and their promise to pay him $100 in the event of the consummation of the deal, thus depriving them of the benefit of the honest judgment of said John Zywicki. This was a species of fraud which if established probably could be redressed by a court of equity, but the plaintiffs lost their equitable remedies by their delay already mentioned. In Potter v. Necedah L. Co. 105 Wis. 25 (80 N. W. 88, 81 N. W. 118), at p. 31 it is said:

“The foundation principle upon which all rules for determining damages in a case of actionable fraud rests, is that the wronged party is to be compensated for the loss he sustained by the fraud to the extent of the natural and proximate consequences.of the wrong, — for such results ‘as happen in the natural course of things and were to be expected to ensue according to the general experience of mankind.’ ”

Subordinate to this general principle, sub-rules by which damages for various kinds of fraud are to be measured have been established, as, for instance, the rule by which [590]*590damages for fraudulent misrepresentations are to be measured.

We know of no rule of law which affords any measure of damages for fraud of this nature. It is a species of fraud comparable to that of a secret dual agency, such as. was discussed in Weinhagen v. Hayes, 174 Wis. 233, 178 N. W. 780, 183 N. W. 162, 187 N. W. 756; and Mueller v. Michels, ante, p. 324, 197 N. W. 201, 199 N. W. 380. It is apparent that such fraud may result in much damage or little damage. It may constitute an important factor in the consummation of a contract or it may be of little or no consequence. The difficulty of reducing such influence to •financial terms is apparent.

However, a court of equity will not tolerate such conduct on the part of an agent, and, on the theory that fraud vitiates everything, it will cancel and set aside a contract where the agent of one party also acts as the secret agent of the other, and, where the status quo cannot be restored, grant other appropriate relief in the way of money damages, as was done in Mueller v. Michaels, supra. The damages awarded in that case are not in the nature of legal damages, but substitution for the equitable remedy of rescission, which could not be awarded in that case. So in this case, the conduct of the defendants in suborning the judgment of John Zywicki, the confidant of plaintiffs, and depriving them of his honest and unbiased judgment, while constituting a fraud from which a court of equity might grant relief, does not constitute a fraud for which a court of law affords any measure of damages.. The remedies for double dealing and secret agency are discussed in sec. 2137 in 2 Mechem on Agency (2d ed.), but no suggestion is contained therein, and we have 'found no authority for the proposition, that such wrongs can be redressed in a court of law.

But the complaint sets forth another well known legal cause of action. By a reference to the statement of facts it will appear that the complaint alleges that the defendants [591]*591conspired to induce the plaintiffs to enter into the transaction, etc., and that “through trick and artifice they obtained the confidence of the plaintiffs by employing plaintiff’s father-in-law, John Zywicki, as their secret agent, to aid and co-operate with them in negotiating an exchange of the properties described as aforesaid, and for the purpose of enlisting the confidence of the plaintiffs induced John Zywicki, in whom plaintiffs trusted and placed full confidence, to accompany them to the farm of the plaintiffs, where all negotiations took place, under a secret agreement with the said John Zywicki that if they made a deal with the plaintiffs they would pay him $100 and all expenses.” After the court made and filed the findings of fact, the plaintiffs requested the court to make, among others, the following additional findings:

“1 — a. That the defendants, Luts and Zell, conspired with John Zywicki, father-in-law of the plaintiff Adam Wachowski,

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Bluebook (online)
201 N.W. 234, 184 Wis. 584, 1924 Wisc. LEXIS 313, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wachowski-v-lutz-wis-1924.