Duffy v. Scott

• Decision Date: 04 June 1940
• Parties: DUFFY v. SCOTT.
• Court: Wisconsin Supreme Court

235 Wis. 142

292 N.W. 273

DUFFY

v.SCOTT.

Supreme Court of Wisconsin.

June 4, 1940.

Appeal from a judgment of the Circuit Court for Douglas County; W. R. Foley, Judge.

Affirmed.

Action by James A. Duffy against K. A. Scott, sole trader, doing business as K. A. Scott & Company, commenced August 5, 1938. From a judgment for the plaintiff entered December 1, 1939, the defendant appeals. The facts are stated in the opinion.

Powell & Sprowls, of Superior, for appellant.

Crawford & Crawford, of Superior, for respondent.

FOWLER, Justice.

The defendant is a sole trader residing in Cleveland, Ohio, and conducts a branch business at Duluth, Minnesota, under the name of K. A. Scott & Company. Sidney Wick was his managing agent of the Duluth branch. Wick represented to the plaintiff Duffy that he needed $2,500 for Scott's business. Duffy delivered $10,000 par value of bonds to Wick and signed a note with Wick on which Wick secured a loan from the First American National Bank of Duluth and put up the bonds as collateral. The bank sold the bonds and applied the proceeds on the note. Wick had absconded in the meantime, having embezzled large sums from Scott. The plaintiff paid the bank $1,492 in satisfaction of the note. Judgment went against the defendant for this sum, with interest. The money was not paid by the bank to Wick, but was entered by the bank directly to the credit of Scott in the latter's bank account. The plaintiff understood the $2,500 would be so credited when he signed the note, and signed it in reliance on Scott's responsibility and would not have signed it on the responsibility of Wick. The note was dated January 28, 1932, and Scott received a check for $2,635.38 drawn on Scott's account signed by Scott & Company by Wick and payable to Scott, which Scott received and deposited to his account in his Cleveland bank. The check was paid by the Duluth bank on February 1, 1932. At the time the money was deposited by the bank in Scott's account Wick delivered to the plaintiff an instrument signed “K. A. Scott & Company by Sidney Wick,” reciting as follows: “Received from Jas. Duffy as a loan *** to be returned free and clear of all incumbrances with all coupons attached except those not due as of this date *** (the bonds referred to). The above bonds are being used as collateral at the First American National Bank for the loan of $2500, made as of this date, note signed by Disney Wick and James Duffy.”

The plaintiff sued Scott for conversion of the bonds by failing to return them within ninety days as agreed in the receipt above quoted. The case went to trial to the court and a jury. At the close of the evidence the defendant moved for a directed verdict. The trial judge stated that he thought the evidence showed that Wick had no express authority to borrow money in the name of Scott, and was of opinion that the evidence would not support a finding of apparent authority, but that to avoid possible necessity for a new trial he would submit a question to the jury. He thereupon submitted to the jury a question inquiring whether Wick had “apparent authority to borrow money in the name of and on the credit of Scott for use in Scott's business.” This question was answered “Yes” by the jury. Neither party requested submission to the jury of any other question.

On motions after verdict, the court filed an opinion pursuant to which he set aside the jury's answer to the question and held that the plaintiff could not recover on the contract set forth in the complaint. But the court held that the plaintiff was entitled to recover for money had and received because Scott received the money loaned on the note of Wick and the plaintiff and entered judgment accordingly. The court considered that as the evidence showed that Scott received the $2,500 loaned, the complaint should be deemed amended to state a cause of action for money had and received.

[1][2] The defendant claims that he did not anticipate the decision of the court on the theory of money had and received, and that had he known that judgment might be entered for money had and received, he could have defended on that theory and perhaps have produced evidence that the defendant did not in fact receive the avails of the loan. If so he should have moved for a new trial on the ground of surprise, or on the ground of newly discovered evidence if he found any such evidence. But no such motion was made. The defendant had ample opportunity to make either such motion, because after announcing his decision the trial judge gave defendant a hearing as to the correctness of his position. The defendant did file a motion for a new trial on the specific grounds of erroneous receipt and exclusion of evidence; error in instructing the jury; in submitting to the jury the question that was submitted; because the verdict was contrary to law, and perverse, and the result of passion and prejudice; and in the interest of justice. No errors respecting receipt or rejection of evidence are pointed out. The objections relating to the verdict all fall by the setting aside of the verdict. This only leaves the ground “in the interest of justice” as basis for the motion for a new trial. The court considered that the evidence showed that the defendant received the avails of the $2,500 loan. The evidence supports that view. If that fact, together with the manifest fact that the defendant would not have paid the money to plaintiff had the plaintiff demanded it, makes a case for money had and received, the only way in which it could be made to appear that the interest of justice requires a new trial would be to show existence of facts not in evidence that would show non-receipt of the money by the defendant, which through surprise the defendant did not produce upon the trial, and no such facts are suggested. Had any such facts existed counsel would no doubt have so shown, and the court would no doubt have granted a new trial to permit them to be shown. We therefore consider that the defendant is not entitled to a new trial on the ground of surprise, and he certainly is not entitled to a new trial on the ground of newly discovered evidence without showing that such evidence exists. It thus appears that the only infirmity of the judgment, if it has any, of which the defendant can avail himself is that the fact that the defendant received the $2,500 and denies liability to return it does not constitute a cause of action for money had and received.

All the evidence respecting the state of Scott's account was received without objection. The $2,500 raised on the note was deposited January 28, 1932, and $2,635.38 was drawn out February 1, 1932. Scott testified he received the $2,635.38 check and got cash for the amount of it. Wick had to transmit annually the profits of the year. The season closed prior to the time of the transaction. The check was for the amount of the balance of the profits of 1931. It also appeared without dispute that the plaintiff demanded from the defendant payment but whether for the value of the bonds, the amount the defendant received on the check or the amount the plaintiff paid on the note does not appear.

[3][4] Where a good cause of action appears from proofs received without objection, a variance between the allegations of the complaint and the evidence is not material. The pleadings may be taken as amended to conform to the proofs. Klaus v. Klaus, 162 Wis. 549, 156 N.W. 963;Micek v. Wamka, 165 Wis. 97, 161 N.W. 367;Wulfers v. E. W. Clark Motor Co., 177 Wis. 497, 188 N.W. 652;Bieri v. Fonger, 139 Wis. 150, 120 N.W. 862;Bruheim v. Stratton, 145 Wis. 271, 129 N.W. 1092;Krudwig v. Koepke, 227 Wis. 1, 277 N.W. 670. The trial court as well as this court may treat the complaint as so amended. Sec. 263.31, Stats., which by its terms, strictly construed, would seem at first blush to require dismissal of the complaint, harks back to R.S.1858, Ch. 125, sec. 35. As pointed out in Micek v. Wamka, supra, 165 Wis. at page 101, 161 N.W. 367, under the practice existing when this section was enacted, the variance would no doubt have been considered fatal and required entry of judgment for the defendant. But under the provisions of secs. 2830, R.S.1898 (sec. 269.44, Stats.1937) and 2836b Stats. 1915 (sec. 269.52, Stats.1937) and the cases above cited, the ruling of the court considering the complaint amended to conform to the proofs was proper. As was said in Klaus v. Klaus, supra [162 Wis. 549, 156 N. W. 965], under such circumstances as here exist “The objection that the evidence and allegations *** are at variance is of no merit.” The section of the statutes last above mentioned was enacted in 1915 and in effect softens the rigor of sec. 263.31, and renders it inapplicable in cases where evidence received without objection and not denied and not claimed to be subject to refutation, constitutes a cause of action other than that stated in the complaint.

[5] The defendant cites only one case as holding that the action for money had and received does not lie in the instant case, Calhoun v. McCrory Piano & Realty...