Bolton v. Chicago Title & Trust Co.

• Decision Date: 01 October 1974
• Docket Number: No. 255,255
• Parties: Wilbur E. BOLTON, Plaintiff, v. CHICAGO TITLE & TRUST CO., Defendant and Third-Party Plaintiff-Respondent, Roger U. WALSH, Third-Party Defendant-Appellant.
• Court: Wisconsin Supreme Court

Page 911

221 N.W.2d 911

64 Wis.2d 714

Wilbur E. BOLTON, Plaintiff, v. CHICAGO TITLE & TRUST CO., Defendant and Third-Party

Plaintiff-Respondent,

Roger U. WALSH, Third-Party Defendant-Appellant.

No. 255.

Supreme Court of Wisconsin.

Oct. 1, 1974.

Hersh & Stupar, Milwaukee, for appellant.

Reinhart, Boerner, Van Deuren & Norris, Milwaukee (William R. Steinmetz, Milwaukee, of counsel), for respondent.

CONNOR T. HANSEN, Justice.

A single issue is dispositive of this action: May a third-party defendant seek affirmative relief by counterclaim against a third-party plaintiff when such relief does not involve or affect the contract, transaction or property which is the subject matter of the action or relate to the occurrence out of which the action arose?

The appellant vigorously argues that the provisions of sec. 263.14(1), Stats., are applicable to the action on his counterclaims against the respondent. The relevant part of sec. 263.14 provides:

'263.14 Counterclaim. (1) A defendant may counterclaim any claim which he has against a plaintiff, upon which a judgment may be had in the action.'

Such an argument might have some viability if the respondent were the principal defendant in the Bolton action, but he is not. Arthur v. State Conservation Comm. (1967), 33 Wis.2d 585, 148 N.W.2d 17. To arrive at the disposition urged by the respondent, one would be required to consider the third-party action instituted by the respondent as a completely separate and distinct action or proceeding. Thus, the respondent would be the plaintiff and the appellant the defendant. This, however, is not the facts of this case because the appellant was brought into the case by the respondent on the theory of equitable subrogation. When properly viewed, appellant's claims are asserted against only 'part of the plaintiffs' as no claim has been asserted against the plaintiff Bolton.

This being the case, the provisions of sec. 263.15, Stats., are applicable. Sec. 263.15 provides, in part:

'263.15 Cross complaint and third party actions.

(1) A defendant or a person interpleaded or intervening may have affirmative relief against a codefendant, or a codefendant and the plaintiff, or part of the plaintiffs, or a codefendant and a person not a party, or against such person alone, upon his being brought in; but in all such cases such relief must involve or in some manner affect the contract, transaction or property which is the subject matter of the action or relates to the occurrence out of which the action arose. Such relief may be demanded by a cross complaint or counterclaim, served upon the party against whom the relief is asked or upon such person not a party, upon his being brought in.

'. . .

'(3) The provisions of this chapter with respect to demurrers and answers to complaints apply to and govern pleadings to cross complaints and third party complaints, . . .'

The appellant also relies on sec. 263.15(3), Stats., for the proposition that the same pleading rules which apply to answers and counterclaims in the principal action, apply to answers and counterclaims in third-party complaints. We interpret sec. 263.15(3) to apply to the procedural rules set forth in chapter 263 and not to the substantive rights of pleading causes of actions. Sec. 263.15(1), makes no distinction whether the claim is interposed by cross complaint or counterclaim and expressly provides that the claim may be asserted by either. Therefore, sec. 263.15(1) applies to cross complaints and counterclaims of third party defendants, whether impleaded, interpleaded or intervening, when the claim is asserted against one of the parties enumerated therein.

Our attention has also been directed to sec. 260.19, Stats., which relates to the statutory framework for bringing in new parties by defendants in third-party actions. The interpretive commentary to sec. 260.19 reflects that the terms 'interpleaded' and 'impleaded' have been used interchangeably in both the statutes and the case law, thus the omission of the term 'impleaded' in sec. 263.15(1).

Under sec. 263.15(1), Stats., certain parties can have affirmative relief against certain other parties; however, in 'all such cases such relief must involve or in some manner affect the contract, transaction or property which is the subject matter of the action or relates to the occurrence out of which the action arose.'

The fundamental purpose of permitting counterclaims and cross complaints is to enable the court to 'grasp all the issues germane to the main controversy . . . and dispose of them in one and the same action.' Hemenway v. Beecher (1909), 139 Wis. 399, 402, 121 N.W. 150, 151; or ". . . to enable the court to grasp all the issues germane to the main controversy, whether arising between the plaintiff and the defendant...