Erickson v. Westfield Mill. & Elec. Light Co.

• Citation: 263 Wis. 580,58 N.W.2d 437
• Court: United States State Supreme Court of Wisconsin
• Decision Date: 05 May 1953
• Parties: ERICKSON, v. WESTFIELD MILLING & ELECTRIC LIGHT CO.

Page 437

58 N.W.2d 437

263 Wis. 580

ERICKSON, v. WESTFIELD MILLING & ELECTRIC LIGHT CO.

Supreme Court of Wisconsin.

May 5, 1953.

This is an action in which plaintiff seeks to recover damages claimed to be due by reason of defendant's failure to perform a contract to deliver to plaintiff a complete generating unit. A jury found that the unit delivered was not complete and awarded $2,323.30 damages. On motions after verdict the court changed the amount to $3,302.44. Defendant has appealed from the entire judgment.

Material facts will be stated in the opinion.

John A. Conant, Westfield, Brazeau & Brazeau, Wisconsin Rapids, Richard S. Brazeau, Wisconsin Rapids, of counsel, for appellant.

Schubring, Ryan, Petersen & Sutherland, Madison, for respondent.

BROWN, Justice.

Plaintiff operates an electric utility plant at Warroad, Minnesota, and defendant operates one at Westfield, Wisconsin. They agreed to exchange certain generating machinery and defendant agreed to pay to plaintiff $5,000 in addition. Their first agreement was in writing dated June 5, 1950, and described plaintiff's machine as 'a complete generating unit'. For this defendant 'is to pay $5000.00 and 1-Cummins L 6-720 RPM generating unit, 2400 volt, said unit to be delivered at Warroad complete and in good operating condition'. There is testimony that after the contract was signed defendant told plaintiff it was not satisfied with the requirement that defendant's unit was to be delivered in operating condition while plaintiff was only bound to furnish a 'complete' unit. At any rate, when the parties met to exchange properties about June 6, 1950, they executed a second contract which provided that each party was to deliver to the other 'a complete generating unit' and omitted all reference to 'good operating condition'. When the new contract was executed defendant turned over its generator to plaintiff and paid him the specified $5,000 and received and took home the generator which had formerly belonged to plaintiff. Within a few days plaintiff discovered that the crankshaft on the unit which he had just received was broken, a filter was missing and gaskets and bearings were worn out. He had them replaced at a cost of $2,852.44 for parts and $450 for labor, total $3,302.44. On February 6, 1952 he brought this action for the breach of the contract of June 5th, alleging that the unit received from defendant 'was not complete and it was not in good operating condition' and demanded $3,500 damages for the cost of repairs and replacements 'so as to make it complete and to put it in good operating condition'. Plaintiff's testimony on the trial conformed to the complaint, in that the expense was incurred to put the machine in good operating condition.

Defendant answered alleging that the contract upon which plaintiff sued was supersed by the second one, attaching a copy of it, and denying the allegations of broken crankshaft and missing parts. Defendant also denied that plaintiff had sustained any damage for the reason that the machine delivered by plaintiff to defendant 'was not in working condition and is absolutely worthless'. Plaintiff filed a 'reply' to this answer, alleging that he had been induced to sign the second contract by fraud and repeating his reliance upon the first contract. This 'reply' was verified March 22, 1952, and with the issues so drawn the parties approached the day of the trial. Then, on April 2, 1952, the plaintiff served defendant with an amended complaint in which he alleged the execution of the second contract only and complained that the unit delivered by defendant to him was not a complete generating unit because of the missing and damaged parts already described.

When the case was called for trial on April 9, 1952, plaintiff moved the court to allow the amendment to the complaint just mentioned. In a conference between counsel and the court plaintiff stated that by this amendment all allegations of fraud were withdrawn and he was now standing upon the second contract as the one governing the transaction. Defendant objected to proceeding to trial without having twenty days in which to answer this amended complaint, but the trial court stated that there had been no change in the issue except that plaintiff's amendment had adopted the contention of defendant's answer that the second contract was the controlling one. The court allowed the amendment and directed that the trial should begin that afternoon. After the noon recess defendant returned to court with an amendment of its own, substituting for its original answer a new one directed to plaintiff's amended complaint and containing a counterclaim. In these defendant seized the issue of fraud which plaintiff had just laid down and alleged that by reason of plaintiff's fraudulent misrepresentation of the condition of plaintiff's generator defendant had been swindled out of its own generating unit and $5,000. Plaintiff objected to the injection of these new issues at this late date and was sustained by the court which stated that defendant had waived its right to interpose a counterclaim because it had not asserted the counterclaim at the first opportunity. The court then denied defendant's motion to admit the amended answer and counterclaim.

We consider the trial court abused its discretion in this respect. We find no requirement by statute or otherwise that counterclaims be asserted at the first opportunity nor that failure to do so waives them. As the price of allowing belated pleadings, the trial court may impose terms commensurate with the excuse which the moving party has for its delay and with the inconvenience and expense caused to parties and the court by the amendment, but to deny an amendment by which a party, as here, seeks to submit its grievances arising from the transaction to the same jury which considers the grievances of its opponent goes farther than we can justify. Moreover, it was plaintiff who had just submitted a new complaint and thereby had set in motion the present procedural controversy. It seems to us that defendant, upon receipt of a new complaint, was entitled to reconsider its position in the light of the facts newly alleged by plaintiff, and if a new defense appeared to defendant to be desirable, the new complaint gave it an absolute right to make one. If its answer contained new matter which the plaintiff was not prepared to meet, it was for plaintiff to move for continuance. We believe when the trial court accepted plaintiff's new pleading it was required to afford an equal opportunity for defendant to amend, upon just terms.

Having admitted plaintiff's amended complaint and denied defendant's answer and counterclaim, the trial court apparently recognized that defendant's protests had merit and upon reconsideration it rescinded its order of the morning admitting the new complaint and announced that all amendments were denied and ordered that the trial would proceed on the original complaint and answer. Whether this was intended to restore plaintiff's right to rely on the alleged fraud of defendant in procuring the second contract, as specified in the 'reply' but abandoned by plaintiff when his amended complaint was offered, is uncertain. On this appeal plaintiff urges only defendant's failure to deliver a 'complete unit', as in the second contract, not one 'in good operating condition', and we consider it was the understanding of the parties that there was no issue of fraud on either side. That being so, when, over objection, the court permitted plaintiff to testify that defendant's agent induced him to sign the second contract by representing that it was an exact copy in typewriting of the first, longhand, contract we consider immaterial and irrelevant evidence, extremely prejudicial to defendant was admitted. The court denied defendant's motion to strike it, saying that fraud was not the only inference which could be drawn from such testimony. We are unable to think of any other inference and conclude that reversible error was committed by the refusal to strike and to instruct the jury to disregard the testimony.

While at all times in opposing plaintiff's claim defendant stood upon a strict interpretation of the second contract and objected to evidence that the generator it delivered to plaintiff was not in operating condition, defenda...