Baker v. Becker

• Citation: 153 Wis. 369,141 N.W. 304
• Parties: BAKER ET AL. v. BECKER ET AL.
• Decision Date: 29 April 1913
• Court: United States State Supreme Court of Wisconsin

153 Wis. 369

141 N.W. 304

BAKER ET AL.

v.BECKER ET AL.

Supreme Court of Wisconsin.

April 29, 1913.

Appeal from Circuit Court, Waupaca County; Byron B. Park, Judge.

Action by George A. Baker and another against August E. Becker and another, with counterclaims by defendants. Judgment for defendants on the counterclaims, and plaintiffs appeal. Modified and affirmed.

Action to recover on promissory note given in part payment of the purchase of a creamery. The defendants set up two counterclaims, one for the recovery of damages, and the other an equitable counterclaim setting forth alleged false and fraudulent representations made by the plaintiffs which induced the defendants to purchase the creamery, and asking for rescission. The answer of August E. Becker alleges that, after discovery of the fraud, he demanded the return of his money and notes given as consideration for the purchase price, which demand was refused. Defendants pray judgment that they recover $250, with interest, and that the agreements for the purchase of the creamery be rescinded, and the notes given by defendant August E. Becker be canceled, and that plaintiffs be adjudged to secure and indemnify defendant August E. Becker from loss, and that the plaintiffs be adjudged to accept a reconveyance of the stock purchased by defendant August E. Becker and for the recovery of $575, and for such other and further relief as may be just and equitable. The defendant John Becker put in an answer asking that the complaint be dismissed and for general relief. There was a reply to the counterclaims denying generally the allegations thereof.

It was stipulated that in case of recovery by defendants the defendant August E. Becker should recover on his first counterclaim $250 and on his second $560.

The jury returned the following verdict:

“(1) Did the plaintiff Wheeler knowingly make false representations to the defendant August E. Becker as to the amount of business done by the Royalton Creamery Association? Answer. Yes.

(2) If you answer question 1, ‘Yes,’ then did the defendant August E. Becker rely upon said representations in making the purchase of said stock? Answer. Yes.

(3) If you answer question 2 ‘Yes,’ then did the defendant Becker have a right to rely upon such representations? Answer. No.

(4) Did the plaintiff Wheeler knowingly make false representations to the defendant Becker as to competition at the Royalton Creamery? Answer. Yes.

(5) If you answer question 4 ‘Yes,’ then did the defendant Becker rely upon said representations in making the purchase of said stock? Answer. Yes.

(6) If you answer 5 ‘Yes,’ then did the defendant Becker have a right to rely upon such representations? Answer. No.

(7) Did the plaintiff Wheeler knowingly make false representations to the defendant August Becker as to the condition of the machinery in said creamery? Answer. No.

(8) If you answer question 7, ‘Yes,’ then did the defendant Becker rely upon said representations in making the purchase of said stock? Answer.

(9) If you answer question 8, ‘Yes,’ then did the defendant Becker have a right to rely upon such representations? Answer.

(10) Did the plaintiff Wheeler knowingly make false representations to the defendant Becker as to the sum the Royalton Creamery Association was receiving per pound for making butter? Answer. Yes.

(11) If you answer question 10, ‘Yes,’ then did the defendant Becker rely upon said representations in making the purchase of said stock? Answer. Yes.

(12) If you answer question 11, ‘Yes,’ then did the defendant Becker have a right to rely upon such representations? Answer. No.”

Both parties moved for judgment on the verdict. The defendants moved that the answers to the third, sixth, and twelfth questions be changed from “No” to “Yes,” or that said answers to questions Nos. 3, 6, and 12 be stricken out.

The court treated the verdict as advisory, and made the following findings: That the plaintiffs George A. Baker and H. A. Wheeler were on the 6th day of December, 1910, and for some time prior thereto had been, the owners and holders of 63 shares out of a total of 69 shares of stock of the Royalton Creamery Association, a domestic corporation, located at Royalton, Waupaca county, Wis., and the par value of said stock was $50 per share, and the business that of manufacturing and selling butter and butter products. That the plaintiffs by reason of their ownership of said shares had a controlling interest in said creamery, and the plaintiff H. A. Wheeler on the 6th day of December, 1910, and since the 1st day of February, 1909, was the butter maker at said creamery, and had supervision and control of the manufacture and sale of butter at said creamery, had charge of the books and accounts thereof, and was secretary and treasurer of said association. That shortly prior to the 8th day of November, 1910, the plaintiffs George A. Baker and H. A. Wheeler corresponded with the defendant August E. Becker for the purpose of negotiating a sale of said 63 shares of stock, and on said date said defendant August E. Becker, at the request of plaintiffs, went to Royalton for the purpose of entering into negotiations for the purchase of said creamery by purchasing said stock, and on December 6, 1910, plaintiffs sold and transferred to August E. Becker said 63 shares of stock for $3,000, the defendant August Becker thereupon paying plaintiffs $50 in cash, and giving his promissory note for the sum of $450 dated December 6, 1910, due December 20, 1910, note for $500 dated December 6, 1910, due April 1, 1911, which note was also signed by defendant John Becker, note for $500 dated December 6, 1910, due December 1, 1912, note for $500 dated December 8, 1910, due December 1, 1913, all of which notes were payable at the First National Bank of New London, Wis., to the order of George A. Baker and H. A. Wheeler, bearing interest at the rate of 6 per cent. per annum. That at the time of the sale of said stock one C. J. Jensen, of Royalton, Wis., held 50 shares of said stock as collateral security for a loan of $1,000 made by him to plaintiffs, which debt was evidenced by notes, and as part of the purchase price paid by said August E. Becker and for the remaining $1,000 thereof said August E. Becker gave to said C. J. Jensen at the request of plaintiffs 10 promissory notes dated December 6, 1910, each in the sum of $100, with interest at 6 per cent., the first note being due two months after date, and one of said notes being due at the end of each interval of two months thereafter, and to secure said notes gave said C. J. Jensen a chattel mortgage on 63 shares of stock of the Royalton Creamery Association. That in consideration of the giving of said notes and chattel mortgage to said Jensen said Jensen canceled and surrendered to plaintiffs their note of $1,000, which he held, and delivered to plaintiffs the 50 shares of stock held by him as collateral security for said loan, which shares were transferred by plaintiffs to defendant August E. Becker as part of the purchase of said stock. That said defendant August E. Becker paid said plaintiffs December 6, 1910, on the purchase price of said creamery $50, and between the 6th and 21st of December, 1910, paid plaintiffs $200, making a total payment in cash of $250, which was applied on the note for $450. That in January, 1911, by an agreement between plaintiffs and defendant August E. Becker, said note for $450, on which $250 remained unpaid, was surrendered up and transferred to said Becker in consideration of $250 to be paid, but which payment was never made, for the recovery of which, together with other items, plaintiffs have brought a separate action which is now pending. That there remains unpaid and outstanding obligations in favor of plaintiffs and against defendant Becker $250, balance due on said $450 note, said note of $500 dated December 6, 1910, due April 1, 1911, note of $500, dated December 6, 1910, due December 1, 1912, note of $500 dated December 6, 1910, due December 1, 1913, all of which notes are payable to the order of George A. Baker and H. A. Wheeler, and are negotiable notes bearing interest at the rate of 6 per cent. per annum, and the further sum of $1,000 in the form of 10 notes of $100 each dated December 6, 1910, payable to C. J. Jensen, the first two months after date, and one each of said other notes at a period of two months thereafter, all notes being negotiable and bearing interest at 6 per cent. per annum. That the obligations outstanding and unpaid of the defendant John Becker consist only of the note for $500 dated December 6, 1910, due April 1, 1911, payable to George A. Baker and H. A. Wheeler, being the note upon which plaintiffs have brought this action. That the defendant John Becker is the father of defendant August E. Becker and signed the note for the accommodation of August E. Becker, and said John Becker received no consideration for said signature. That the following statements and fraudulent representations were made by the plaintiff H. A. Wheeler to the defendant August E. Becker as set forth in defendants' answer and counterclaim, to wit: (a) That the said creamery was doing a flourishing and profitable business and making 180,000 pounds of butter a year. (b) That said creamery had 128 satisfied patrons. (c) That there was no competition in the dairy business except from one creamery located at Weyauwega, Wis. (d) That there was only one creamery in that locality, and that was located at Weyauwega, a distance of seven miles from Royalton creamery. (e) That the plaintiff Wheeler was receiving 3 cents per pound from the patrons of the creamery for making the butter at said creamery. (f) That the boiler in said creamery was five years old and in good condition and the separator was three years old and in good condition. That said statements were made by the plaintiff H. A. Wheeler to the defendant Becker on the 8th day of November, 1910, at which...