Malco, Inc. v. Midwest Aluminum Sales, Inc.

• Decision Date: 06 June 1961
• Citation: 14 Wis.2d 57,109 N.W.2d 516
• Parties: MALCO, INC., an Illinois corporation, Respondent, v. MIDWEST ALUMINUM SALES, INC., a Wis. corporation, Appellant.
• Court: Wisconsin Supreme Court

Page 516

109 N.W.2d 516

14 Wis.2d 57

MALCO, INC., an Illinois corporation, Respondent, v. MIDWEST ALUMINUM SALES, INC., a Wis. corporation, Appellant.

Supreme Court of Wisconsin.

June 6, 1961.

Snyder, Mantyh & Arndt, Milwaukee, for appellant.

Jack J. Gimbel, Seymour Gimbel, Milwaukee, for respondent.

HALLOWS, Justice.

The first question is whether the trial court erred in changing the answer to the first question in the verdict. The question inquired, 'What sum, if any, do you find due plaintiff from defendant by virtue of the contract of February 15th, 1958?' The jury answered 'None.' The trial court changed this answer to $933.95 stating, in its opinion, the jury probably became confused by the reply and the counterclaim in answering the question because it was clear the uncontradicted evidence revealed a balance due of $993.95. The trial court thought to deny the plaintiff any recovery and to allow the defendant to prevail on the first counterclaim would result in a double recovery by the defendant. We do not agree. Double recovery depends upon whether the amount determined by the jury on the first counterclaim in relation to its answer to the first question is sustained by the evidence. The instructions on the first question by the trial court were not very helpful to the jury. They were very short and only rephrased the question. The trial court stated, in its opinion, that the defendant breached the contract in September of 1958, and because of this, the contract was terminated by Scheer. Whether the defendant breached the contract was a disputed issue and the trial court could not, as a matter of law, determine it. Whether the alleged breach constituted grounds for the plaintiff to terminate the contract was assumed by the trial court.

The first question was agreed to by the parties. On the theory the contract was terminated in September, 1958, the question would not be intelligent to the jury, as there was no sum due on the contract for purchases prior to October 1, 1958, and since there could be no overcharges based on an existing contract after the date of its termination, there would be no disputed issue concerning the amount of the balance to go to the jury. The question inquired, 'What sum, if any, was due on the contract?' Why 'if any,' if the amount was undisputed except to inquire whether any amount was due, i. e., whether the defendant was liable and had an obligation on the contract to pay it? This broad question as submitted to the jury was, in effect, asking for a general verdict on the issue of the defendant's liability. In view of the manner in which the issue was submitted, the jury's answer that nothing was due the plaintiff on the contract necessarily means that the defendant did not breach the contract and the amount of the overcharges paid by the defendant exceeded any balance due on the contract. Such view is sustained by the evidence and the answer of $2,500 to the first counterclaim question. We hold, therefore, the court was in error in changing this answer and it should be reinstated.

Appellant further claims it was error for the trial court to reduce the amount of damages for the plaintiff's breach of the contract from $2,500 to $1,576. Because the court concluded the defendant breached the contract, it calculated damages to October 1, 1958. This was error. There is evidence the defendant had been overcharged $3,851 from February 15, 1958, to June, 1959, on the basis of what the plaintiff had charged Gem, a competitor of defendant. To October 1, 1958, such overcharges amounted to $2,808; the respondent claims $2,532. The $2,500 damages assessed by the jury is supported by credible evidence. Comparing this answer with the answer to the first question in the verdict, the jury must have reasoned defendant was entitled to $3,851 and offset it by the $993.95 due to the plaintiff and thus arrived at its round figure of $2,500. This reasoning supporting the verdict acknowledges the jury made the setoff of the claims of the parties, which was only natural for lay persons to do if not instructed otherwise. The result is not a double recovery by the defendant. We must review the case on the theory upon which it was submitted and apparently understood by the jury. Normally, of course, setoffs are not made by the jury, but here the issues were so framed and since the answers and the net result find support in the evidence, they should stand.

The jury found the plaintiff's letter was false and tended to injure the defendant in the conduct of its business. Plaintiff argues its letter was not libelous and was a qualified privileged communication. The trial court, in its opinion, held the letter was libelous per se. No appeal has been taken or motion to review made by the plaintiff. This question is not properly before us.

The final contention of the defendant is a jury verdict for punitive damages is not subject to modification by the trial court unless there is a showing of passion and prejudice, or that the verdict is not the result of an honest exercise of judgment in which event the power of the trial court is limited to reducing the punitive damages to $1, or the granting of a new trial, or no punitive damages. No such finding was made. The trial court found only the verdict was excessive. Respondent's position is the Powers Rule ¹ should be applied to punitive damages as it is to compensatory damages.

The prior cases of this court are somewhat in conflict and show a development in the law of the courts' supervisory power over punitive damages which has not yet reached the point of clarity or certainty. Punitive or exemplary damages, long known in the law of intentional or willful torts, are imposed as a punishment of the wrongdoer and as a deterrent to others. Their assessment lies entirely in the discretion of the jury, not in any right of the one wronged. ² Even though the evidence may sustain exemplary damages, still if the jury does not award them, it is not error.

The problem arises when the jury does award punitive damages which the trial court believes to be excessive. In Luther v. Shaw, 1914, 157 Wis. 234, 147 N.W. 18, 52 L.R.A.,N.S., 85, a flat reduction of punitive damages made by the trial court was affirmed. The court pointed out the courts' revisory power was necessary for the reason that exemplary damages rested upon a vague and immeasurable basis but would rarely exercise the power on the ground of excessiveness. Based on the difference in the jury's function or duty to grant punitive damages as distinguished from compensatory damages, the court in Manol v. Moskin Bros. Inc., 1930, 203 Wis. 47, 233 N.W. 579, was of the opinion that when the trial court reduced the punitive damages awarded by the jury from $5,000 to $3,000, which was apparently the highest amount which a jury would, in the opinion of the court, be warranted in assessment thereof and gave the plaintiff the option to take judgment, it was error and required a new trial on the theory that the allowance of punitive damages is wholly within the discretion of...