Davis v. Tyee Industries, Inc.

• Jurisdiction: Oregon
• Parties: Darrell DAVIS, Respondent on review, v. TYEE INDUSTRIES, INC., a Washington corporation, and Brodie Hotel Supply, Inc., a Washington corporation, now known as Brodie-Dohrmann, Inc., a Washington corporation, Petitioners on review. CA A20704; SC 28894.
• Citation: 668 P.2d 1186,295 Or. 467
• Court: Oregon Supreme Court
• Decision Date: 16 August 1983

Page 1186

668 P.2d 1186

295 Or. 467

Darrell DAVIS, Respondent on review, v.TYEE INDUSTRIES, INC., a Washington corporation, and Brodie Hotel Supply, Inc., a Washington corporation, now known as Brodie-Dohrmann, Inc., a Washington corporationPetitioners on review.

CA A20704; SC 28894.

Supreme Court of Oregon.

Argued and Submitted Nov. 2, 1982.

Decided Aug. 16, 1983.

Ridgway K. Foley, Jr., Portland, and Donald Joe Willis, Portland, argued the cause for petitioners on review.On the briefs were Katherine H. O'Neil, Donald Joe Willis, and Schwabe, Williamson, Wyatt, Moore & Roberts, Portland.

Mark McCulloch, Portland, argued the cause for respondent on review.With him on the brief was Powers & McCulloch, Portland.

David R. Foster, Portland, filed a brief as amicus curiae for Oregon Association of Defense Counsel.

In Banc.^*

PETERSON, Justice.

In Adams v. Crater Well Drilling, Inc., 276 Or. 789, 556 P.2d 679(1976), we upheld an award of punitive damages recovered incident to an assumpsit claim for money had and received because the defendant's conduct was "essentially tortious."276 Or. at 794.The case at bar also involves a claim for money had and received and the question presented relates to the necessary pleading foundation to recover punitive damages incident to such a claim.There was a verdict and judgment for the plaintiff for general and punitive damages.The Court of Appeals affirmed, Davis v. Tyee Industries, Inc., 58 Or.App. 292, 648 P.2d 388(1982).

The issue involves a pleading question: In an action pleaded as an assumpsit claim for money had and received in which the plaintiff seeks punitive damages, what allegations must the complaint contain in order to support a recovery of punitive damages?We first examine the history of this form of action and its relation to claims for damages for tortious conduct.¹

IHISTORY OF ASSUMPSIT

The common law forms of action of debt, covenant and account were conceived as property claims and were ill adapted to deal with the numerous ways in which claims for breach of contract, express or implied, could arise.Over a period of centuries the English courts developed the assumpsit form of action.Special assumpsit permitted damages for the breach of a simple contract.The next creation was general assumpsit, which provided a remedy in a variety of situations in which, although there was no contract between the parties(express or implied in fact), the law would create a promise to pay in order to avoid unjust enrichment.Thus, if someone paid money to the defendant that should have been paid to the plaintiff, the law created an implied-in-law "contract" which required the defendant to pay the money to the plaintiff.Often referred to as indebitatus assumpsit or quasi-contract, the actions had an equitable character because, under the circumstances, "the defendant * * * is obliged by the ties of natural justice and equity to refund the money."Moses v. MacFerlan, 2 Burr. 1005, 97 Eng.Rep. 676(KB1760).

At least three classes of "common counts" of general assumpsit were created, including (1) the indebitatus counts, (2) the value counts, and (3) account stated.Major indebitatus counts included money paid to the defendant's use, money had and received, and goods sold and delivered.Major value counts included quantum meruit and quantum valebant.

The money count for money had and received came to be used as a vehicle to recover damages for torts.If one by fraud, duress, trespass or other tort obtained another's property and converted it or sold it to another, it was said that the plaintiff could "waive" the tort and sue in assumpsit.²

"Thoughts much too deep for tears subdue the Court When I assumpsit bring, and godlike waive a tort."John Leycester Adolphus, The Circuiteers, 1821, reprinted in 1 L.Q.Rev. 232(1885)³

This led many lawyers to sue in assumpsit rather than in tort seeking a more favorable measure of damage, a longer statute of limitations, more liberal joinder of causes of action, or a lesser burden of proof.

Pleading a claim in assumpsit does not transform a tort into a contract.Professor Corbin wrote:

"In all cases where a tort is waived, there is in fact no contract.The cause of action is a tort, and the tort exists as the cause of action and must be proved as the cause of action from first to last.No trick or legerdemain on the part of the plaintiff can change the tort into a contract.Neither can the law do this.The law may allow new forms of action, and may call things by new names, but it cannot turn a theft or other conversion of goods into an innocent agreement to sell and to buy.The assumpsit alleged in these cases is a mere fiction and is not the cause of action.Professor Kenner argues convincingly that the fiction should never be used to deny a remedy, overthrowing several cases where it was so used.In like manner, it is submitted, the fiction should not be used to enlarge a right.The fact that it has been used to dodge the rule that a personal action dies with the person, or to expand the right of set-off which the common law technically and inconveniently limited, is no ground for using it to nullify a legislative act based on sound public policy.It has often been held that in other sorts of quasi-contracts, the contractual period of limitation does not apply.Perhaps in those cases the tort limitation could be no more logically applied than the contractual limitation.But in the cases here considered there is a recognized tort, it is the real cause of action, and the tort limitation should control."Corbin, Waiver in Tort and Suit in Assumpsit, 19 YaleL.J. 221, 235-36(1910).(Emphasis in original; footnotes omitted.)⁴

Assumpsit pleadings may be simple and short.2 Am.Jur. Pleading and Practice Forms Annotated 725 (1967)(Form 11)(Revised Volume), gives this suggested money had and received pleading form:

"1.Defendant is indebted to plaintiff in the sum of $____________ for money had and received by defendant for the use of plaintiff.

"2.No part of said sum of $____________ has been paid, although plaintiff has demanded the same from defendant."

Compare Form 8 of the FRCP Appendix of Forms, which lists this form of complaint for money had and received:

"1.Allegation of jurisdiction.

"2.Defendant owes plaintiff ten thousand dollars for money had and received from one G.H. on June 1, 1936, to be paid by defendant to plaintiff."

Oregon, in its first pleading statute, required the complaint to contain:

"A plain and concise statement of the facts constituting the cause of action * * *."The Codes and General Laws of Oregon § 66.2(Hilled. 1885).

In 1869, this court held that the common law pleading of assumpsit was inconsistent with the then new code pleading requirement that facts be pleaded.Bowen v. Emmerson, 3 Or. 452(1869), held this assumpsit pleading to be legally insufficient: "On or about the eighteenth day of February, 1868, plaintiffs sold and delivered to the defendant 4,000 lbs. of flour, and that the same was worth $212."Id. In Buchanan v. Beck, 15 Or. 563, 566, 16 P. 422(1888), the court referred to Bowen v. Emmerson, supra, as holding that "the use of the general counts in assumpsit [is] wholly inconsistent with the theory of the civil code."In 1905 the Buchanan and Bowen holdings were disapproved.Keene v. Eldriedge, 47 Or. 179, 182, 82 P. 803(1905), held that "in the absence of a motion to make the pleading more definite and certain, * * * the averment that defendant * * * received from the persons named the money in question, belonging to and on account of plaintiff, states facts sufficient to constitute a cause of action."

This court has continued to recognize and enforce assumpsit actions.In Snow v. Tompkins, 205 Or. 60, 286 P.2d 119(1955), the complaint alleged a simple common law assumpsit count for money had and received.No punitive damages were sought.At trial, defendant objected to any evidence of fraud on the ground that fraud was not pleaded.The trial court overruled the objection, saying:

"The defendant has answered to that second amended complaint without demurring to it; defendant concedes that the second amended complaint states a good cause of action, but objects to the introduction of evidence as to fraud for the reason that fraud is not pleaded in its specifications in detail, as required in an action for fraud.

"I have come to the conclusion that inasmuch as the second amended complaint states a good cause of action not being attacked by the defendants, anything is admissible under that complaint which would give rise to an implied promise to repay the money held by the defendants.

"Had the defendants attacked the complaint by a motion or demurrer, it would have been construed most strictly against the pleader, but now it comes before us on the objection to introduction of evidence.Every intendment is given to the complaint to support it, but that is immaterial, however, as the allegation of a good cause of action is admitted.It only goes to the introduction of the evidence, and I hold that the evidence is admissible as received as the evidence of fraud."⁵

We affirmed, saying:

"The authorities in this state sustain the proposition that when the defendant has received money from plaintiff which he should not in equity and good conscience retain, a promise to pay is implied and the plaintiff may waive the tort and sue in assumpsit for money had and received and need no longer allege any promise to repay the money wrongfully withheld.In this case and in the absence of any motion to make more definite and certain or of any demurrer, we hold that the complaint in the pending case was sufficient and the court did not err in submitting the issue of fraud to the jury. * * *."205 Or. at 67, 286 P.2d 119.

IIADAMS v. CRATER WELL DRILLING

This court has held that where a contractual relationship exists between persons which creates a...