Hilgendorf v. Schuman

• Decision Date: 07 November 1939
• Citation: 288 N.W. 184,232 Wis. 625
• Parties: HILGENDORF v. SCHUMAN.
• Court: Wisconsin Supreme Court

232 Wis. 625

288 N.W. 184

HILGENDORF

v.SCHUMAN.

Supreme Court of Wisconsin.

Nov. 7, 1939.

Appeal from an order of the Circuit Court for Milwaukee County; August E. Braun, Judge.

Reversed.

Action commenced in the civil court of Milwaukee county by Oscar Hilgendorf against John C. Schuman to recover damages for deceit. The civil court entered an order sustaining the defendant's demurrer to a second amended complaint. Thereupon, on plaintiff's appeal to the circuit court, the civil court's order was affirmed, and from the circuit court's order to that effect, the plaintiff appealed.

Jack Sattell, of Milwaukee, for appellant.

Joseph Lieberman, of Milwaukee, for respondent.

FRITZ, Justice.

The circuit court order which is under review affirmed an order of the civil court sustaining the demurrer of the defendant, John C. Schuman, to the complaint of the plaintiff, Hilgendorf, on the ground that the facts alleged are insufficient to constitute a cause of action. Summarily stated, the allegations of the complaint, so far as material in passing upon the issues on this appeal, are to the following effect. The plaintiff is a farmer and shipper of milk. The defendant is by occupation engaged in milk distribution and is president of the Watertown Milk Co-operative Association (hereinafter called the “Co-operative”), which does not bargain to obtain the highest price for its members, but for the distribution of its milk has organized a corporation known as the Dairy Distributors, to which it sells exclusively. The defendant controls that corporation, as well as the Co-operative, and fixes the policies of both with respect to what is to be paid for milk. The state Department of Markets had power and did set prices that were to be paid shippers of milk, including the plaintiff, but had no authority to set the price of milk shipped to co-operative associations. On October 1, 1935, the plaintiff was induced by the defendant to sign a contract with the Co-operative, binding him to ship his milk to it for five years. The contract does not provide for any price or rate to be paid for the milk so shipped, but leaves that discretionary with the Co-operative's board of directors. To induce the plaintiff to sign the contract, the defendant falsely and fraudulently, with intent to deceive and defraud, stated and represented to the plaintiff that the contract members of the Co-operative “were receiving and would continue to receive” from five to ten cents more per cwt. for their milk than the current price as set by the Department of Markets in the Milwaukee milk market which non-contract members were receiving, and that plaintiff would, by signing the producers' agreement, receive five to ten cents more per cwt. for his milk than a non-contract member. Plaintiff, believing the representations to be true and relying thereon, signed the contract, and shipped his milk to the Co-operative from October 1935 to October 1937, when he became aware that the Co-operative never did and never would or intended to pay the prices represented, and that it was so managed that it could not pay the prices set by the Department of Markets. For the 240,000 pounds which plaintiff shipped to the Co-operative he received forty cents per cwt. less than market price; and when he was induced to enter into the contract, contract members were in truth and fact receiving about forty cents less per cwt. for their milk than the current price in the Milwaukee milk market. By reason of defendant's false and fraudulent statements, plaintiff suffered damages in the sum of $1,000, which he seeks to recover on a first cause of action, and also suffered damages in the sum of $500 because of expense to him in retaining counsel to rescind the contract, and to recover $125 for his last month's shipment of milk to the Co-operative.

[1][2] In support of his demurrer the defendant contends (1) that the facts alleged are insufficient to constitute a cause of action, because the alleged fraudulent representations are promises as to future action and not statements of fact, and therefore do not constitute fraud; and (2) that the alleged misrepresentation that “the plaintiff would, by signing the producers' agreement, receive from five to ten cents more per cwt. for his milk than the non-contract member” is but promissory in character, and inasmuch as it is alleged to have been made prior to and contemporaneously with the making of the contract, the plaintiff cannot show an inconsistent contemporaneous oral agreement, the subject matter of which is covered by the...