Benz v. Zobel

• Decision Date: 15 November 1949
• Citation: 39 N.W.2d 713,255 Wis. 542
• Parties: , 13 A.L.R.2d 795 BENZ, v. ZOBEL.
• Court: Wisconsin Supreme Court

Page 713

39 N.W.2d 713

255 Wis. 542, 13 A.L.R.2d 795

BENZ, v. ZOBEL.

Supreme Court of Wisconsin.

Nov. 15, 1949.

Reed, Born, Nesbitt & Kay, Ripon, (Lorin L. Kay, Richland Center, of counsel), for appellant.

Lehner & Lehner, Princeton, for respondent.

ROSENBERRY, Chief Justice.

In his complaint the plaintiff alleges:

'1. That on September 16, 1946, he entered into a sharecropper's contract with the defendant, which is hereby made part of this complaint by reference, each party having a copy.

'2. That under the terms of said contract the defendant agreed to furnish his 257 acre farm in the township of Brooklyn, together with the stock and machinery, which machinery he represented to be in good working condition and in a good state of repair and in good working condition.

'3. That the income from said farm was to be divided, so that the plaintiff would receive 40% and the defendant 60%, and the expenses were prorated at the same rate.

'4. That the defendant furnished 70 tons of alfalfa hay, 2000 bushel of oats, one silo filled to within 6 feet of the top, and another silo filled to within 9 feet of the top, which the plaintiff agreed to replace at the end of his contract on October 1, 1947.

'5. That said contract expired on October 1, 1947 and that the defendant informed the plaintiff that he did not intend to work the farm for another year, and that the parties then agreed that they would continue under said contract until April 1, 1948. That on January 13, 1948, the defendant unexpectedly summoned the plaintiff to the office of his attorney and insisted on terminating said oral agreement forthwith, and require the plaintiff to work for him as a hired man for wages until April 1, 1948, on the representations hereinafter set forth.

'6. That on said date the defendant induced the plaintiff to sign a settlement of which Exhibit 'A' hereto annexed is a copy and made part hereof. That plaintiff was induced to sign said settlement on the defendant's representation as a fact he was legally liable for and obliged to pay for all of the silage, hay, and oats that was then on hand on October 1, 1946, which the contract required him to leave as of October 1st, 1947 and called in another man to corroborate said representation as a fact, and by so doing charged him with all the feet that was fed to all the live stock on the farm from October 1, 1947, until January 1st, 1948, except that the defendant paid for his share of the commercial feed that was purchased. And the defendant further represented to him that unless he promptly signed that settlement that he would forfeit all his rights under the contract.

'7. That the machinery which was furnished by the defendant on the farm was in such a bad condition and so old that much of it was junk and unfit for use, and that by reason thereof the plaintiff was obliged to hire a tractor and mower to cut hay, at an expense of $65.00; had to hire a hay baler to have it baled, at a cost of $296.00; had to hire the grain sowed, at a cost of $30.00, and the plaintiff was obliged to pay for 40% of the repair bills on the old machinery, amounting to $517.42 dollars, all of which the defendant refused to pay on the representation that the defendant was not liable therefor.

'8. That under this contract as extended he paid a hired man the sum of $60.00. That there is due to the plaintiff a balance of about $10.00 for the feed on some hens which the defendant removed for his personal use; and rent for small tools and corn sheller in January, 1948, amounting to $15.00.

'9. Alleges that said settlement Exhibit 'A' is void because obtained by misrepresentations, upon which the plaintiff had a right to rely and did rely, and was deceived thereby to his damage. That by reason of the defendant's failure to carry out his part of said contract and by reason of said misrepresentations, the plaintiff sustained a substantial loss for the recovery of which he brings this action.'

From an inspection of the complaint it is obvious that two causes of action are intermingled. However, the defendant did not move to make the complaint more definite and certain. Karass v. Marquardt, 1939, 230 Wis. 655, 284 N.W. 514. Nor was any question raised in regard to the duplicity of the complaint during the course of the trial. The special verdict dealt with both causes of action and the facts and damages were separately found. While the defendant raised no question in regard to duplicity, in order to deal with the questions raised here we shall consider the two causes of action separately.

(1) We shall designate as the first cause of action the one which is for damages for alleged false representation inducing the plaintiff to enter into the farm contract.

By the second paragraph of the complaint it is alleged: 'That under the terms of said contract the defendant agreed to furnish his 257 acre farm in the township of Brooklyn, together with the stock and machinery, which machinery he represented to be in good working condition and in a good state of repair and in good working condition.'

In paragraph 7 it is alleged: 'That the machinery which was furnished by the defendant on the farm was in such a bad condition and so old that much of it was junk and unfit for use, and that by reason thereof the plaintiff was obliged to hire a tractor and mower to cut hay, at an expense of $65.00; had to hire a hay baler to have it baled, at a cost of $296.00; had to hire the grain sowed, at a cost of $30.00, and the plaintiff was obliged to pay for 40% of the repair bills on the old machinery, amounting to $517.42 dollars, all of which the defendant refused to pay on the representation that the defendant was not liable therefor.'

Upon the trial the jury found that the defendant represented to plaintiff that all the machinery on the farm was in good working condition; that such statement was false; that the plaintiff believed and relied upon the truth of such statement; that the plaintiff in the exercise of such care as is ordinarily exercised by persons of his education, intelligence and experience should not have discovered the falsity of such statement before entering into the agreement on October 1, 1946, and assessed the plaintiff's damages for the false representation in regard to the condition of the machinery at $426.90.

It appears without dispute that prior to the execution of the farm contract that plaintiff had been on the farm more than once and that he had occasion to see the machinery. It does not appear that anything was done to prevent the plaintiff from making such examination of the machinery as he chose. There was no concealment in that respect.

The contract provided: 'First party to furnish four work horses, machinery and tools now there, one tractor now there, * * *'

It further provided: 'The following items of expense are to be paid 60% by first party and 40% by second party, * * * Tractor fuel and oil, new parts and repairs on tractor or other machinery * * *.'

Two weeks after the execution of the farm contract plaintiff took possession of the premises and commenced performance. It appears without dispute in the language of the testimony that every two or three months the parties figured up and squared their incidental accounts. Squaring accounts means the same thing as settling accounts. On the evening of October 13, 1947 the parties for the last time squared or settled their incidental current accounts.

It also appears that from time to time transactions were had between the parties relating to the extra expense to which the plaintiff claimed he was put by reason of the defective machinery. Some of these claims were allowed by the defendant, some were not. It nowhere appears that upon any occasion before or after the plaintiff commenced performance of the contract did plaintiff claim that he had been deceived by reason of false representations made to him by the defendant. He not only settled accounts but he paid his share of the cost of repairs in accordance with the terms of the contract. If as is alleged in the complaint the machinery was in such bad condition and so old that much of it was junk and unfit for use the plaintiff must have discovered that fact when he saw the machinery before he signed the contract, and he certainly saw it when he moved upon the farm, took possession of the machinery and commenced to use it in the performance of the farm contract.

It does not appear that the plaintiff made any claim that the machinery had been misrepresented to him or that he had been induced to enter into the contract by reason of false statements made by the defendant until after the settlement between the parties had on January 13, 1948.

There is a well established principle of law that a party defrauded may retain what he has received, stand to his bargain and recover for the loss caused him by the fraud. However, he cannot maintain an action for the original wrong practiced on him where with full knowledge of all the material facts he does an act which indicates his intention to stand to the contract and waive all right of action for the fraud. In Thompson v. Libby, 36 Minn. 287, 31 N.W. 52, 53, it is held: '* * * A person who has discovered the fraud while the contract is still wholly executory to go on and execute it, and then sue for the fraud, looks very much like permitting him to speculate upon the fraud of the other party. It is virtually to allow a man to recover for self-inflicted injuries. The fraud is really consummated, and the damages incurred, by the acceptance of the property and paying for it. And if this is done after the fraud is discovered, the purchaser cannot say that he sustained this damage by reason of the fraud.'

Cases are collected in 8 L.R.A.,N.S., 452. See also Simon v. Goodyear Metallic Rubber Shoe Co., 6 Cir., 105 F. 573, 52 L.R.A. 745; Kingman & Co. v. Stoddard, 7 Cir., 85 F. 740.

There is a division of authority upon this proposition,...