J. H. Clark Co. v. Rice

• Citation: 106 N.W. 231,127 Wis. 451
• Parties: J. H. CLARK CO. v. RICE.
• Decision Date: 20 March 1906
• Court: Wisconsin Supreme Court

127 Wis. 451

106 N.W. 231

J. H. CLARK CO.

v.RICE.

Supreme Court of Wisconsin.

March 20, 1906.

Appeal from Circuit Court, Columbia County; B. F. Dunwiddie, Judge.

Action by the J. H. Clark Company against G. R. Rice. From a judgment for defendant, plaintiff appeals. Reversed.

It appears from the record, and is undisputed, that the plaintiff and the defendant entered into a written agreement dated November 30, 1903, wherein and whereby the plaintiff made, constituted, and appointed the defendant its agent in and for Ramsey county, Minn., for the sole purpose of selling, vending, and putting within said county the fuel-saving device of the plaintiff and by it manufactured, owned, and controlled by letters patent of the United States, and of recommending and selecting subagents for the plaintiff in and for any county of the United States, and whereby the plaintiff agreed to deliver to the defendant or such subagents on board cars said device upon payment of prices therein named, which were not to be more than $10 for each furnace attachment, and $7.50 for each stove attachment, and said contract contained numerous other agreements not necessary here to mention, and recited that the same was made in consideration of $1,500 to the plaintiff in hand paid. Such payment was made by the defendant giving to the plaintiff two judgment notes, each for $750 and interest. Upon the note falling due June 1, 1904, the plaintiff entered judgment against the defendant for the amount thereof, with interest and costs, June 28, 1904. Upon the petition verified by the defendant July 6, 1904, and a proposed answer verified by the defendant on the same day, the trial court, on September 16, 1904, opened such judgment and allowed the defendant to answer and defend against the payment of said note. That answer as amended alleged three defenses: (1) To the effect that said two judgment notes were obtained by the plaintiff from the defendant by false and fraudulent representations and warranties upon which the defendant relied; (2) that there was a want of consideration for the giving of said notes; (3) that the giving of said notes was against public policy in failing to comply with chapter 438, p. 723, Laws of 1903. Such amended answer also alleged two counterclaims: (1) In effect reiterating the facts so stated by way of defense, and alleging that the defendant was damaged by such false representations and warranties in the sum of $1,550; and (2) in effect reiterating the facts so stated by way of defense, and therein tendering back to the plaintiff all rights and interests under said contract, and thereby electing to rescind said agreement by reason of such alleged false and fraudulent representations and warranties. The plaintiff, by way of reply to the first counterclaim, among other things, alleged in effect that after the note in suit became due the defendant requested and procured from the plaintiff an extension of the time for the payment thereof with knowledge of all the facts, that the contract was made by defendant after he had investigated the merits of the device, and then ratified by him with full knowledge of all the facts; and to the second counterclaim the plaintiff replied to the effect that the plaintiff did not own the other note and had no knowledge of the ownership of the same, and that the defendant requested and procured an extension of the time of payment of said note with full knowledge of all the facts.

At the close of the trial the jury returned a special verdict to the effect (1) that the patented device known as the “Clark Fuel Saver” did not, at the time of the giving of the note in question, have any practical utility for the purposes for which it was patented; (2) that the J. H. Clark Company, its officers or agents, before the giving of the note in question did represent to the defendant in substance that said Clark fuel saver was a practical and successful device; (3) that such representation was false; (4) that the J. H. Clark Company, its officers or agents, did represent to the defendant in substance that said device could be successfully used upon all stoves and furnaces for heating purposes; (5) that such representation was false; (6) that the J. H. Clark Company, its officers or agents, before the giving of the note in question did represent to the defendant in substance that said fuelsaving device could be used successfully with all kinds of fuel; (7) that such representation was false; (8) that the J. H. Clark Company, its officers or agents, before the giving of the note in question did represent to the defendant in substance that by the use of said device at least 50 per cent. of the fuel would be saved over and above the amount required to produce the same heat without the use of said device; (9) that such representation was false; (10) that the J. H. Clark Company, its officers or agents, before the giving of the note in question did represent to the defendant that the said Clark fuel saver was very valuable; (11) that such representation was false; (12) that the J. H. Clark Company, its officers or agents, before the giving of the note in question, did represent to the defendant that said plaintiff had thoroughly tested said device, and that such tests had proved all that is claimed for it; (13) that such representation was false; (14) that such representation or representations were made to the defendant for the purpose of inducing him to enter into said contract and give the note in question; (15) that the defendant, in giving the note in question, did rely on said representations; (16) that the defendant was induced by said representations to give the note in question; (18) that the company's officers or agents making such representation did know or ought to have known that such representations were false; (20) that the defendant did expend in attempting to sell the device in the county purchased by him and in operating the same the sum of $50. Thereupon the trial court made findings of fact and conclusions of law, to the effect (1) that the plaintiff was, prior to November 30, 1903, a Wisconsin corporation and the owner of said letters patent of the device known as the “Clark Fuel Saver,” and that both parties were located at Portage; (2) that the plaintiff's business was as therein stated; (3) that the contract between the parties and the notes given by the defendant to the plaintiff were as above stated; (4) that by the agreement made and the transaction had between the plaintiff and the defendant the plaintiff sold, transferred, and assigned to the defendant an interest in a patent or patent right; that the said note in suit and the other note given at the same time were given for an interest in a patent or patent right; that neither of said notes had written or printed thereon in red ink or otherwise, “The consideration for this note is the sale of a patent or patent right, or interest therein,” nor did either of said notes have thereon in red ink or otherwise any other words of similar import or meaning, or any words indicating what the consideration of said notes really was; (5) that the note in suit matured June 1, 1904; that within a few days thereafter, the defendant Rice inquired of one of the plaintiff's officers as to whether the time of payment thereon could be extended, but the defendant did not, at the time of making such inquiry, or at any other time, promise to pay said note or any part thereof, except the promise made in and by the note itself; that the defendant, at the time he made such inquiries, did not have full knowledge as to all the facts, or as to his rights in the premises. Upon such special verdict and findings and conclusions of law, and pursuant to the order of the trial court, it was, on motion of the attorneys for the defendant, adjudged that the complaint in this action be, and the same was, thereby dismissed, with costs and disbursements in favor of the defendant, taxed at $350.49. From that judgment the plaintiff brings this appeal.Daniel H. Grady, for appellant.

H. E. Andrews (John A. Aylward and Rufus B. Smith, of counsel), for respondent.

CASSODAY, C. J. (after stating the facts).

Error is assigned because the court refused to compel the defendant to elect as to the remedy upon which he would rely under the pleadings. The statute authorized the defendant by answer, to set forth “as many defenses and counterclaims” as he might have, “whether they be such as were formerly denominated legal or equitable or both.” Rev. St. 1898, § 2657. Under this section it has been held that “a defendant may plead as many defenses and counterclaims as he may have, even though they are based upon inconsistent legal theories. With a defense of fraud for which he seeks a rescission of the contract sued on, and a counterclaim for payments made thereon, the defendant may, therefore, join a counterclaim for breaches of such contract, if held binding.” South Mil. B. H. Co. v. Harte, 95 Wis. 592, 70 N. W. 821;Roberts v. Decker, 120 Wis. 102, 108, 97 N. W. 519, 521. In this last case it was said that “under the Code a defendant may plead as many defenses as he has, even though they be based on inconsistent legal theories, unless they be so repugnant in fact that proof of one disproves the other.” In the case at bar there is no such repugnancy. Besides, the defendant recovered nothing on either of his counterclaims. The judgment merely dismissed the complaint with costs.

2. Error is assigned because the court found, as a matter of law, that the note sued on in this action was given in violation of chapter 438, p. 723, Laws 1903, and hence was void. That act was amendatory of chapter 268, p. 364, Laws 1901, and declared, in effect, that all promissory notes and other evidences of indebtedness, taken or given for any patent, patent right, or interest therein, should have written or printed thereon in red ink the words “The consideration for this note is...